Last year, in a ruling by the High Court, the UK government’s plan for achieving net zero was deemed unlawful. According to the court, the emissions reduction proposals were inadequate, necessitating a revision. In the event, as a I noted in my last post, in its new plan, ‘Powering up Britain’, the government seem to have focussed mainly on the Carbon Capture Utilisation and Storage option, with £20bn allocated, as already announced in the Spring Budget. Although so far there not much to show for it, the plan says that progress on this is being made ‘to the next stage of the negotiations to rollout the first Carbon Capture clusters in our industrial heartlands’, with at least two more cluster rounds to follow.
The carbon capture plan didn’t go down too well with some academics- it was seen as deflecting resources from carbon-free investment. Bob Ward, head of policy at the Grantham Institute, said CCS would be needed for certain industries, but that using it to enable the continued use of fossil fuels was a mistake. ‘What does not make sense is to carry on with further development of new fossil fuel reserves on the assumption that CCS will be available to mop up all the additional emissions. While the costs of CCS will come down, it will make fossil fuel use even more expensive, and it will not eliminate all the risks resulting from the price volatility and energy insecurity of fossil fuels’. Nearly 700 UK academics agreed!
The government also ducked a lot of 129 proposals for improvements in Tory MP Chris Skidmore’s energy review. So, for example, oil and gas companies won’t yet be forced to stop all flaring and the ban on sales of new gas boilers will not be brought forward from 2035. And there was no new word on the lifting of the ban of onshore wind, apart from this: ‘Recognising that onshore wind is an efficient, cheap and widely supported technology, Government has consulted on changes to planning policy in England for onshore wind to deliver a localist approach that provides local authorities more flexibility to respond to the views of their local communities. We will respond to the NPPF consultation in due course’. Solar did a bit better. The Government says it ‘seeks large scale solar deployment across the UK, looking for development mainly on brownfield, industrial and low/medium grade agricultural land. The Government will therefore not be making changes to categories of agricultural land in ways that might constrain solar deployment’.
In general, with some exceptions, the launch event thus offered little new in policy terms, mainly just recycled/restated existing policies or prevarications- ‘it will be decided soon’. However, though there was no major new money promised for power supply (even for nuclear), in addition to recycling old news (e.g. on funding for the latest CfD round) the government did announce a revamp of the Energy Company Obligation (ECO) energy saving scheme, providing grants to 300,000 houses, via a rebranded ‘Great British Insulation Scheme’. It’s claimed this will deliver ‘an additional £1bn investment by March 2026’. That’s much less than some had hoped for, but it is still good news.
In addition, the new plan mentioned help for the UK’s emerging floating offshore wind industry, though this £160m fund to support port infrastructure had already been announced in 2021. And, although the plan confirmed ‘the first tranche of new green hydrogen production projects’, that was under the already established £240m Net Zero Hydrogen fund. But at least there is now ‘a shortlist of 20 projects to take to the next stage in the first electrolytic hydrogen allocation round’. The UK heat network market is also to be expanded, through that’s through the already established Green Heat Network Fund and the Heat Network Efficiency Scheme, with £220m for the Heat Network Transformation Programme over 2025/6 and 2026/7.
In parallel, on the efficiency side, a £30m Heat Pump Investment Accelerator aims to leverage £270m in private investment to boost manufacture and supply of heat pumps in the UK. The Boiler Upgrade Scheme is also to be extended to 2028. So that’s new. But still unresolved is the conflict over home heating between hydrogen (mostly out of favour but still in with a chance in some locations) and heat pumps (much more efficient, but still costly to run at present), with differing peak power demand and grid management implications. See my next post. That set of issues, and much else, may have to await reform of the infrastructure planning process and National Planning Policy Framework. That was seen as a key to speeding up progress in all areas.
Also still to come- fuel price rebalancing, shifting carbon taxes from power to gas to avoid market distortion. But the report said not just yet! ‘We accept the Skidmore Review recommendation that Government should commit to outlining a clear approach to gas vs. electricity ‘rebalancing’ by the end of 2023/4 and should make significant progress affecting relative prices by the end of 2024. Rebalancing will generate the clear short-term price signal necessary to shift both households and businesses to lower-carbon, more energy efficient technologies like heat pumps. This is vital to meet Government’s existing decarbonisation commitments, including our goal of 600,000 heat pumps installed per year by 2028’.
The Daily Telegraph (30/3/23) chose to focus on that: ‘Levies will be added to fuel bill to push customers into making greener choices’- even though it is some way off and not certain. Clearly aware of the political risks, Grant Shapps told Sky News: ‘We all know that electricity can be a big way to decarbonise, but we also know these are big changes. So this is not a sort of rip-out-your-boiler moment’. But whereas ideas like this were evidently contentious, and some bits (especially on energy saving) were seen as good, overall the new Net Zero plan was seen as mostly rather limited, offering ‘jam tomorrow, not jam today’, alongside a few rehashed policies and decisions, with, for example, ‘Great British Nuclear’ relaunched yet again, but still with few details or specific funding allocations.
The bottom line? Well, it seems the overall plan may not deliver the full 2030 emission reduction target. The government’s Carbon Budget Delivery plan says: ‘We have quantified emissions savings to deliver 88Mt or 92% of the National Determined Contribution (NDC). We are confident the delivery of emissions savings by unquantified policies detailed in this package will largely close this gap and the government will bring forward further measures to ensure that the UK will meet its international commitments if required’. Not everyone was convinced by that…
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