We hope that the Prime Minister uses his forthcoming 10-point plan to demonstrate clear ambition on, and pathways to, the various existing and future low-carbon technologies that will need to be developed, deployed and scaled in the 2020s. This decade will prove critical in the fight against climate change and should be defined by UK leadership, thanks to the country’s Presidency of COP26.
A detailed 10-point plan, however, may prove unwieldy in both policy development and delivery, as well as difficult to communicate to audiences. We believe that actions and inclusive messaging around fewer, more realistic policies are essential to ensuring the buy-in and cooperation of the public, alongside industry and government departments.
We have therefore produced a five-point plan to highlight those vital policy measures and technologies that can be swiftly unleashed by government in what is likely to be a short decade, as the UK seeks to up the tempo on cracking the net-zero puzzle.
1. By 2021, the Government should publish a public-facing net-zero roadmap for the UK, and a supporting communications programme, alongside the net-zero strategy.
Madano Analysis: With the UK holding the COP26 Presidency, the Prime Minister and the government can build a climate change-focused legacy and demonstrate global leadership. Combined with a net-zero strategy, a public-facing roadmap and communications programme needs to be developed. This will outline the leadership that government is taking to equitably tackle climate change and how the public will need to modify its behaviour for the country to reach net zero by 2050. This roadmap could feed into the government’s ‘levelling up’ agenda by outlining clear guidance and investment.
The UK requires an ambitious framework that outlines the policies and fiscal/regulatory levers that will be used to develop and scale low-carbon technologies by 2030. The forthcoming net-zero strategy should be published in early 2021 and demonstrate the benefits of low-carbon technologies to the regions, deliver the confidence required by industry and give government departments the framework needed to consult on interlinked policies.
2. The Government should unleash the offshore wind and solar sectors in the 2020s by removing artificial targets and current regulatory constraints imposed by the nationally significant infrastructure projects (NSIP) process.
Madano Analysis: There is concern that the Prime Minister’s promise to raise the target for offshore wind power capacity from 30GW to 40GW by 2030 could be viewed as a cap. Electricity generated from wind may only account for 24 per cent of household energy demand in 2030, given our appetite for electricity-hungry appliances and the increasing preference to work from home. The upcoming Contracts for Difference (CfD) auction could raise £20bn+ of investment, and government and industry will need to capitalise on this windfall if the PM’s claim that wind could power all homes by 2030 is at all feasible.
A government framework is required to give the solar industry confidence and harness those advancements that can optimise existing assets. The first step should be to streamline the NSIP process which constrains the development of assets exceeding 50MW without considering technological upgrades that enable these assets to generate higher outputs on the same area of land used. Restructuring this process would allow the upgrade of existing assets that could unlock several clean GW for the grid by 2030.
3. The Government should facilitate the widespread rollout of a small modular reactor (SMR) programme and a novel siting assessment for new reactors, with the aim of deploying an SMR by the end of 2030.
While the Prime Minister has declared that UK household electricity needs will be met by offshore wind in 2030 (projected to be only one-third of the UK’s electricity demand), the Government should take the opportunity to further the development of SMRs and AMRs to pick up demand that wind may struggle to supply. A fleet of SMRs can be deployed across the UK, providing locally embedded low carbon energy generation, and when manufacturing for export is considered, this presents a long-term opportunity for the UK, and the UK nuclear supply chain. These technologies also present an opportunity to help decarbonise heavy industries with dedicated power plants providing low carbon heat and power, and produce clean hydrogen, which could be the building block of tomorrow’s low carbon economy.
A crucial step to realising the SMR opportunity is the development of a rationalised planning framework that would enable the rapid siting and deployment of SMRs at trial stages, without their being lost in the regulatory and public consultation web that has stymied large-build, new nuclear sites.
4. The Government should establish two industrial hydrogen clusters in the north of England and Scotland by 2025, and six more clusters by 2030 across the UK.
Madano Analysis: Currently, the government is heavily focused on hydrogen production, as the UK hydrogen strategy will outline. Understanding the demand profiles for this resource, across a swathe of end-uses, has proven difficult for government and industry. Support for two industrial hydrogen clusters by 2025, which feature large-scale demonstrator pilots, will offer a stronger indication of demand and opportunities for the early adoption of hydrogen. Moreover, understanding which technologies can be easily deployed in these sandboxes will drive costs down for both production and demand. Placing these clusters in the north of England and in Scotland will create high-quality jobs in strategically important regions and serve to buttress the Government’s ambitions to ‘level-up’ communities across the UK.
5. The Government should establish a 2030 plan for the development of tidal energy in the UK.
Madano Analysis: The UK has established a substantial offshore wind sector, but tidal energy remains untapped potential. Tidal is a potentially significant source of low-carbon, reliable energy, but faces one major barrier: high construction costs, especially due to the lack of experience at scale. But with current borrowing costs relatively low, it may never be cheaper for the government to invest in the development of a tidal energy industry in the UK and, if action is taken quickly, the UK can seize a first-mover advantage in this sector. A clear plan from government on the development and delivery of tidal energy should be a priority for the 2020s and would work to shore up and benefit the economies of coastal communities in Wales, Scotland and Northern Ireland.
Our short, yet targeted, plan outlines those actions that the Government should take now, if it wishes to ‘jump start’ the UK’s drive towards net-zero through the 2020s and reach its goals by 2030.
Crucially, measures that support existing and developing low-carbon technologies must be closely aligned with other significant issues, such as ‘levelling up’, and be steeped in an overarching and inclusive narrative that outlines the impacts and benefits of the energy transition to all.
Madano advises clients across the energy sector– if you’re interested in learning more please drop our team a line at MadanoEnergyPractice@madano.com.
By James Watson, Senior Account Executive, and the team in Madano’s Energy practice.