Last week the Government published its much anticipated Powering Up Britain strategy, along with several thousand pages of documentation. This followed a High Court case last year which found that policy to date was insufficiently detailed to deliver on the country’s statutory duty to achieve net zero carbon emissions by 2050. Despite the large volume of material released, most people have been under-whelmed: there is little that is new in any of this, and the sense of policy inertia continues.
“The greenest thing about this plan is the recycling of already announced ideas. George Osborne first announced a competition for Small Modular Reactors in 2015. Carbon capture funding was announced in the Chancellor’s Budget earlier this month,”
– Caroline Lucas MP, Green Party
I had an interesting conversation recently with someone at DESNZ (the new BEIS) who suggested that the Government is paralysed by a fear of market interventions leading to a need for further market interventions. This is a reasonable fear, but one which is borne from a desire to micro-manage specific outcomes. A similar effect was seen in the sale of Bulb where an obsession around not leading the market led to a sub-optimal outcome. Here, the Government is failing to act, and one reason might be a fear that action might result in the need for corrective action like a bizarre application of Newton’s First Law.
The Government needs to get over itself. Energy policy is going no-where and the result is expensive and increasingly unreliable energy as well as a high likelihood that climate targets will be missed (although they are legal targets, there is nothing to prevent Parliament from changing them by amending the law). A back-to-basics approach is needed, focusing on real, established technologies while enabling innovation for the future. A hallmark of current policy is an assumption that new, as yet unproven technologies such as hydrogen and carbon capture will not only emerge, but will be commercially viable and underpin the energy transition. There does not appear to be a Plan B.
In the meantime, costs continue to rise, and energy security continues to fall. By summer 2028 there will only be one nuclear power station running based on the current schedule of closures, and Hinkley Point C is not expected to open before September 2028, although further delays may emerge – neither Olkiluoto nor Flamanville has managed to open despite much longer construction times. The Government makes much of its intention to confirm Sizewell C during this Parliament, but then there would be at least a decade before it would be built, and that’s assuming everything goes well. There are plans for small modular reactors and advanced reactors in the 2030s, but there are as yet unproven and may not enter the market on schedule, or at all.
The ambitious plans for renewable generation remain, but most of the new detail here is about enabling measures such as speeding up planning processes. Industry is concerned more by the long lead times grid for connections (which can be 5-7 years in some cases), the reduction in the AR5 administrative strike prices, and overall budget for the Contracts for Difference auctions. The Government is being accused of “brinkmanship” since the consensus is that costs are rising and therefore the subsidy pot should also increase. Costs were also rising last year when the price of AR4 came in lower than previous auctions, but I have long been concerned that these levels were unsustainable. Not only do actual accounting data show costs rising and not falling, but the large financial losses seen among turbine manufacturers has been a warning that all is not well in the economics of the wind industry.
In the area of reducing heat losses from homes, the one area where policy ambition would be most welcomed, the Government’s goals are woefully inadequate: just 300,000 homes are to be improved over the next 3 years, at a cost of £1 billion, achieving £300-£400 per year in saving for those households. An investment, if it goes to plan, that would take more than 8 years to pay back. There are more than 21 million households in the UK, so this target is plainly inadequate.
Another issue is with the way in which home improvements are measured. There is a growing recognition that the Energy Performance Certificate is unfit for purpose, yet the Government is pushing forward with plans to ban homes with low ratings from being rented (with similar rules for commercial buildings). This risks further damaging the rental sector and reducing the number of homes available. In many cases, building owners face a choice between an expensive retrofit which may not achieve the desired ratings, or demolition and re-building, although this of course releases large quantities of embodied emissions.
The first step is to reform the EPC, removing the subjectivity, and introducing actual measurements of heat losses (and ensuring that heating and dryness are considered together since damp homes require more energy for both heating and ventilation – as this comment on LinkedIn makes clear). Removing the penalties for electric heating would also help – the measure should calculate the heat required to maintain comfort levels in the home rather than the cost of heating which may in some cases be outside the homeowners control.
There is still a strong sense that the energy transition is something that is being done to people rather than with or for them, with all of the rules about banning methane boilers and the sale of new petrol or diesel cars. A public that is already struggling with high energy costs is not interested in having to replace cars that are still working fine, or entire heating systems, particularly when in most cases the alternatives are unsuitable, particularly in the case of heating: hydrogen in the home is still an untested theory, and absent excellent insulation, heat pumps fail to deliver required warmth in cold weather. The Government would do well to take note of the recent referendum in Berlin on accelerating climate goals which was defeated after failing to meet the necessary threshold – interestingly the voter turnout was low at just 36% suggesting lower interest in the issue than policymakers may expect. Certainly climate has been falling down the Ipsos MORI issues survey rankings since COP 26.
Overall my impression is that these documents amount to little more than a tick-box exercise to satisfy the legal requirement to present a more detailed net zero strategy. But the same targets-expressed-as-limits failings exist here as in previous attempts (eg “up to” 24 GW nuclear by 2050 instead of “at least”, the former being a limit rather than a target).
“This should be the moment to seize the economic opportunities of the global green race but instead the government’s dithering risks the UK becoming the ‘sick and dirty’ man of Europe once again. To compete with our international counterparts, we need a step change filling the close to £30 billion annual gap in investment needed to reach net zero and restore nature, and committing to a modern industrial strategy. That means investing in clean homes, transport, and industry. There appear to be some welcome though minor measures, consultations and reannouncements announced today, but the government must urgently bring forward its plans now postponed till later in the year. The UK needs to change course urgently, before it’s too late,”
– Luke Murphy, associate director and head of climate, nature, and energy at the Institute for Public Policy Research
Nothing here changes my view that net zero by 2050 is unlikely and that we’re facing a serious electricity crunch as this decade progresses. Climate activists saw last year’s court case as a victory, but in reality all it has done is divert officials’ attention away from useful work and into this huge justification exercise which is unlikely to bring us any closer to actually achieving the targets in question. But more to the point, energy security is at real risk as electrification drives demand at a time when coal and nuclear generation is closing. A twin focus on securing more non-intermittent generation and reducing heat losses in homes should be prioritised to address this risk.
Key elements of Powering Up Britain
Gas: focus on increasing security of supply
- Allowing more gas from UKCS into grid without blending (lower energy value)
- Increased use of biomethane to support de-carbonisation
- Further updates later in the year on storage/flexibility
Nuclear: the creation of Great British Nuclear is confirmed, with a statutory role to be determined
- At least one FID this Parliament (almost certainly Sizewell C) and two more in the next Parliament
- Competition for SMRs to select the best design to launch as a priority
- Advanced nuclear reactors targeted in the 2030s
- Up to 24 GW of nuclear (25% demand) to be operational by 2050
Renewables: focus on enablers
- Streamlining the planning and consenting processes for offshore wind
- Nothing really new for onshore wind other than further consultations
- Solar roadmap to be developed next year – up to 70 GW of solar (roof and ground mounted) by 2035
- Consultation to simplify planning process for rooftop solar
- Biomass strategy to be published by the end of June 2023
- Up to 50 GW of offshore wind by 2030, including up to 5 GW of floating wind
- Development of port infrastructure to support floating wind farms
Carbon capture and storage crawls on
- Eight projects announced which will progress to negotiations to form the first two CCUS clusters, in the North East and North West,
- Deployment of two industrial clusters by the mid-2020s and four by 2030
- Deployment of at least one power CCUS plant by the mid-2020s
- Target to capture 20-30 mtCO2 annually by 2030, including 6 mtCO2 pa from industrial CCS
- Deployment of at least 5 mtCO2 pa of engineered greenhouse gas removals by 2030
- Creation of 50,000 jobs relating to CCS by 2030
Hydrogen also progressing slowly
- 15 projects being evaluated to share in the £240 net zero hydrogen fund with an aim of awarding contracts of 250 MW capacity
- Two further rounds planned to launch late 2023 aiming to award contracts for 750 MW projects in 2025
- Plan to deliver 1 GW hydrogen production by 2025 and up to 10 GW of low-carbon hydrogen production capacity by 2030 with at least half from electrolysers
- Up to 1 GW CCS-enabled hydrogen production in operation or construction by 2025
- Up to 1 GW of electrolytic production in operation or construction by 2025
- A Hydrogen Certification Scheme to be established by 2025
- Business models for hydrogen transport and storage to be designed by 2025
Flexibility and storage still on the back burner
- Long duration policy framework to be developed by 2024
- Working with Ofgem on demand side response and digitisation
Insulation targets are feeble
- 300,000 homes to be insulated by March 2026 costing £1 billion and aiming to secure £300-400 pa savings for least energy efficient homes through improved insulation
- Continued focus on heat pump rollout
- Renaming the ECO as Great British Insulation
Transport: pressing ahead with zero emission vehicle mandates despite recent EU u-turn
- More than £350 million investment in electric vehicle charging infrastructure
- A final consultation has been published on the Zero Emission Vehicle mandate that would require an increasing percentage of manufacturers’ new car and van sales are zero emission from 2024
- Consulting on a long-term trajectory for Sustainable Aviation Fuel uptake through a mandate to be introduced from 2025
Green finance strategy to secure investments in the energy transition
- The Government wants the UK to be leader in green finance and attract £ billions of capital into green investments
- Plans to explore new reporting requirements for companies around emissions and transition reporting
- Currently consulting on regulating ESG ratings
A frightening post, our Government simply doesn’t appear bright enough to steer us through
Interesting read
Never mind nett zero by 2050 , the government needs to act now with the quickest way to fill the energy gap that will happen ether later in the year or the winter after .
As an electrical engineer I see this can only be achieved in time by building more wind farms on land and not offshore . Solar and nuclear won’t cut the mustard . I have a friend who works on Hinckley C and says that it won’t come on stream until 2030. He has also purchased his own generator ready for when the power cuts come next year.
Windmills can be built quickly in abundance and all surplus power could easily be channelled into electrolysis for H2 and O2 . The perfect fuel for hydrogen transport once the government realised that the grid is wildly inadequate in providing the demands for charging cars country wide .
Windmills could be built with electolysis plants inside them negating the need and the losses to supply electricity over long distances .
Production of hydrogen by this method is an efficient way of storing energy when electricty is being overproduced or when demand is low . The hydroelectric plant that SSE. Are proposing in Scotland is not the best way of storing energy in the form of pumping water uphill to release it when electricity demand is high. This is far too inefficient compared to producing and storing hydrogen not to mention the 10 years it would take to build or the environmental implications with climate change.
The government need to invest and encourage hydrogen based transport , just look what JCB have done producing hydrogen powered plant .
I see the electric vs hydrogen power for cars is similar to the VHS vs Betamax race in the 80s where clearly Betamax and hydrogen is a no brainier but common sense doesn’t always prevail.
There is no future in electric vehicles due to the vast cost in producing batteries and charging issues. The fact that the raw materials for these need to be imported and at great cost all round.
If we are to heat out homes with electric then the thought of charging our cars with electricity as well is a pipe dream since the grid in the uk would need to be increased 5 fold in the next 10 years. .
In the uk we have some of the windyest conditions along with massive tidal flows .
Everything we need to be a world leader in cheap energy production is all in our back yard.
If the government treated this opportunity with the same funding and sense of urgency that they did with Covid then we would be self sufficient in a couple of years and would not have any dependence on Putin solving that problem at the same time.
I trust you find this thought provoking and look forward to your comments .
Philip Yeates .
Unfortunately, the idea of building more wind turbines doesn’t help as the energy gap only exists when the wind isn’t blowing. It doesn’t really matter where they are located – that seems to be something of a political discussion without much real-life relevance. At the moment, building wind actually decreases security of supply by making other forms of (dispatchable) generation less viable.
If as you are suggesting, we use hydrogen as an energy storage medium to support the grid when the wind isn’t blowing then that is fine, but where is the 5GW of hydrogen based electrolysis, 5GW of hydrogen based generation and 500GWh of hydrogen storage that we need to demonstrate that the idea is viable (note that is what we need as a demonstrator, not what we need to fix the supply security problem)? I can’t see any contracts, I can’t see any invitations to tender or even any hits of politicians working out how to fund such a thing. Until that happens then hydrogen will sit permanently in a box in my mind marked “non-viable”. I’m sure the science is there but I don’t think many people understand the scale of the engineering (and hence cost) necessary to deliver it (and indeed whether that is the most cost effective thing to do).
I think you are naïve if you believe that 100GW of wind, 40GW of hydrogen generation, 40GW of electrolysis and 50TWh of hydrogen storage can be built in “a couple of years”, even NG-ESO’s wildest predictions aren’t that enthusiastic.
Your concern about cars is misplaced – I give it 10 to 20 years before cars return to being luxury items owned only by the rich – as you point out, electric cars are intrinsically more expensive to manufacture than internal combustion engine cars because of that demand for expensive raw materials. Hydrogen might be an option but it isn’t a cheap fuel compared to petrol and diesel and (unless you’re burning your hydrogen in an internal combustion engine) hydrogen cars are basically battery cars with a smaller battery and a fuel cell and hydrogen storage added.
This is not a serious suggestion but the devil in me wants to suggest siting electrolysis plants next to existing gas generators and using the hydrogen and CO2 to synthesise fossil fuels (assuming you can manage to split off that additional O from the CO2 to give you CO, or maybe you modify the combustion conditions so as to generate CO in the first place) – it is probably at least as viable as carbon capture (you can tell I’m not a fan!) but I hate to think how much the resulting product would cost.
The only proven answer to our current problem is muddling through until we build sufficient nuclear generation to solve the problem. Muddling through has real risks – if the West hasn’t made friends with Russia (this looks unlikely!), it is cold in Europe (rather common in Winter) and the wind doesn’t blow (a not uncommon occurrence) then we’ll be stuck with no wind and little power from interconnectors – a situation which might mean that electricity has to be rationed. Once we’ve built sufficient nuclear generation to solve the problem, someone is going to ask the obvious “why do we need all these windmills when we’ve got lots of nuclear power?” question – I look forward to a politician trying to find an answer to that. I echo Kathryn’s view that we seem to be obsessed with buying unproven nuclear generation – that needs fixing.
Not ‘Powering Up Britain’ … Britain is being wound down … (but our imports are ‘Powering Up China’ )
Nut-Zero is an impossible dream (that is rapidly turning into a definite nightmare) full of management speak, from people who’ve never read a book on physics.
The IPCC admits that from 5,000 to 10,000 years ago, the average temperature was at least +2°C degree warmer than today … called a climate optimum, because it was good news & life flourished.
Now IPCC tells us … +1 °C warmer than today is a climate emergency ???
This is what our “CO2 induced catastrophic warming” really looks like ..
https://blogger.googleusercontent.com/img/a/AVvXsEjCr2p93GITnUWFJkZn2IrxjI4upLr0WmvlV2eSg6dfkI8wi-45ey8LgebAoslNLJpuS_H4ZhBXJUufsu4FdbLdOoTZlrjZvIlhrT9XwuYGYyWOw-tlhhmUe2tFPUkgO7_t02PXnyO-dx7G-t3XLSi1C34O1g5Fz-e-w3nindtmSlSawjOaLkOjdpU9=s681
These are the temperatures of Al Gore’s “boiling oceans”
https://i0.wp.com/www.bom.gov.au/climate/enso/monitoring/nino3_4.png
Why are we hell bent on destroying our economy & infrastructure over a non problem ??
Is there nothing to help industry over the immediate energy price hike and also in the longer term?
Tata Steel, for instance, claim that £3bn is needed to keep Port Talbot viable, but the government has offered £0.3bn to help with electric arc development.
And what about other high-energy industries such as glass, cement, ceramics, aluminium and chemicals? – all strategic in some way.
Its all very well stuffing our housing with Kingspan and Earthwool but if in 5-10 years we have no industry left we will be totally dependent on imports.
And all for eliminating a trace gas but one essential for plant growth and food production.
A fascinating and sadly indicative summary of the Government’s, and previous governments, lack of scientific and engineering knowledge regarding energy policy, and maybe more importantly who and which organisations are responsible and capable of action. Unpicking and dealing with the different strands of the drivers for ‘Net Zero’ is highly complex, but for too many people it seems to revolve around stopping dead climate change. Maybe if climate change were embraced as natural, which it is, then less emotive and more economical solutions can be properly explored. Everyone wants cheaper energy, efficiently delivered and wisely used. During my lifetime this has happened. When I was young my parents didn’t have central heating in their new post war built house. We had a coal fire which also heated the water, while lighting and cooking was electric. Now I have a plethora of electric stuff and an automatic central heating system. It is all much more efficient in my reasonably well insulated house. The improvement in efficiency and cleanliness of cars has been exponential. We need to put aside hysteria around climate change and continue to innovate and progress. We need to recognise that progress has and is happening. The big thing is to get the organisations and companies doing what they know to best improve and innovate. For example too often in the past energy suppliers have been forced via their licences to get involved in building insulation, which they knew nothing about, or generation of renewable energy, which they knew nothing about, simply because as licensed suppliers the government could force them into these areas even though they did not possess the relevant expertise. Governments need to listen to real experts rather than lobby groups and give engineers time to do their jobs. They need to encourage more students to study science and engineering, and firms to take on apprentices, but most of all they need to be open and truthful.
People like Luke Murphy at the IPPR have their heads in the sand. Public support for Net Zero and green policies in general will plummet once the rolling power cuts start. Security of supply must be top of the list and needs urgent action, not Government platitudes.
Kathryn many thanks for distilling 2500 pages saves me having to wade through it!!..
On CfD’s we have several wind farms failing to exercise their contracts for a 2nd year and can legally hold out for longer whilst taking advantage of the marginal pricing. Was this addressed in the reams of paper?