With the COP26 presidency still sat with us, the UK Government is keen to maintain its leadership position, Madano’s Energy team provides advice to some of the most exciting energy projects from Carbon Capture and Storage (CCS) and nuclear through to solar and wind. Our team is focused on connecting projects to the most influential stakeholders supporting the UK’s net zero and levelling up agendas. Looking ahead to 2022, here are some of our predictions about trends and opportunities within the energy sector:
1) Will SMRs start to happen, or will fusion make the grade?
With Hinkley Point C, Sizewell C and even Bradwell B securing sizeable column inches in recent years, Small Modular Reactors (SMRs) have always been seen as exciting, but something for tomorrow. However, will Qatari investment to the tune of £80m coming into the Rolls Royce consortium be enough to progress to the next phase of supply chain readiness and site selection? They had better get a move on with a number of exciting fusion companies that are hoping 2022 will be the year to recreate the sun and limitless clean energy.
2) Do people really understand what Carbon Capture and Storage (CCS) is?
Our Energy practice has witnessed varying levels of understanding of CCS in 2021 – from being compared to nuclear geological storage and explained using chocolate biscuits and mugs of tea. There is a need for companies to communicate what CCS means for net zero more clearly. Part of this will be to look past transporting CO2 relatively short distances to geological storage sites and understanding how emitters that aren’t close to storage sites can harness this technology, maybe by boat or truck.
3) Will we have the honest debate about the need for oil and gas?
We saw in recent weeks that the Cambo oil field has been vaunted as a massive win for environmental campaigners, but equally we have seen the Faroe Islands double down on new exploration. With the wrangles around Nord Stream 2 and Russian exports from Yamal, we are still going to be using considerable volumes of oil and gas in our daily lives through to 2050. With the electrification of platforms starting to come forward, there does need to be an honest debate around our longer-term dependency on hydrocarbons and where Direct Air Capture or nature-based solutions can offset our needs.
4) Low Carbon Hydrogen
Ever increasing hype around the potential for hydrogen was seen in 2021 with major investments and dedicated funds launched to promote innovation and investment. More will be unveiled in 2022, as the UK Government looks to publish its draft Heads of Terms for the forthcoming Hydrogen Business Models in Q1-2, and it has already begun the process engaging with end-users to support the development and scaling up of hydrogen technologies. Industry will continue to match and even exceed the Government’s ambitions in this sector, with trade associations like Hydrogen UK, supported by Madano, serving to support key departments to move from strategic thinking to deeper work with the sector to deliver a fully-fledged value chain.
5) Will we see a moratorium on new energy from waste facilities?
Energy from waste assets is seen as highly valuable. With money flowing in from private equity and pension funds, the sector is now mobilising around carbon capture and storage technologies. However, there is ever increasing pressure on the thermal treatment of waste, and its perceived impact on recycling rates. Wales has come out with their own moratorium on large, new scale EfWs to curb development appetite. Further parliamentary debates have asked the same question and now an open letter has been signed with cross-party support. Future proposals will need to be equipped with a clear narrative and be compatible with net zero ambitions.
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