It can safely be said that 2020 will be a year we will all remember. For the energy sector, the impact of COVID-19 has been seen in shifting demand patterns, the grid needing to balance surplus supply, an unprecedented coal-free spell and record low energy prices. The lasting impact is unknown, however, how the UK responds to the pandemic will set the course for the medium to long term.
This week, the Prime Minister announced the government’s plans for the ‘New Deal’ for the UK’s economic recovery, promising to ‘build back greener’. Whatever the long term future brings, the next 12-24 months will be particularly crucial, as organisations focus on getting ‘back to business’ post-COVID-19.
It is becoming clear that a green recovery plan – that puts net zero right at the heart of the UK’s future economic resiliency - and policy clarity are urgently needed. As we await the energy white paper later this year, this is an opportunity to accelerate the projects that will cement a stronger and more sustainable future both for businesses and wider society.
To mark a year since net zero emissions by 2050 was written into UK law, we gathered the views of industry experts, including, Professor Sam Fankhauser, director at the Grantham Institute on Climate Change at the London School of Economics, Arjan Geveke from BEIS and Robert Buckley from Cornwall Insight to debate the technologies, investment and policy needed to reach net zero, and the role business will play.
This report - The Future Report 2020: The road to Net Zero - also looked back at a previous report we did with Professor Fankhauser in 2011, which modelled four potential energy scenarios out to 2020. Now we are in 2020, we wanted to look back at the predictions we made then to assess if there were any lessons learned that could help shape the future of the sector.
The conclusion was that many of the decisions made almost a decade ago have had a huge bearing on where we are now. And, while all our contributors agreed that net zero by 2050 was an ambitious target, all believed that it was possible if major strategic decisions around the investment in technologies, incentives for renewables and changes to the structure of the system are taken in the next five years.
Carbon capture and storage (CCS), bioenergy with carbon capture and storage (BECCS), hydrogen, battery storage and electric vehicles were all cited as technologies that would make the biggest impact on the UK’s decarbonisation goals, as well as decentralisation at scale. We’re starting that journey and technology will play a much bigger role in the way energy exists from businesses through to communities.
Revisiting the 2011 report has been fascinating and taught us three very valuable lessons:
1. We need a sustainable response to the economic recovery
We didn’t know that the resilience we started building in 2011, following the financial crash of 2008/9, would serve us so well in 2020. The success of renewables in particular stems from decisions that were taken back then. In 2011, there was still nervousness about the cost and potential of renewable technology, so the policy decisions and incentives put in place then have resulted in renewables accounting for a large proportion of today’s generation mix.
That’s why building greater resilience and being flexible enough to adapt are now more important than ever.
2. We need to stay focused on net zero
Pre-COVID-19, we were seeing the emergence of net zero as a compelling need for all. Over the past 12 months, we have been working with customers on the net zero agenda and making it a reality - particularly in the public sector and increasingly into the private sector.
The government has an opportunity to use the COVID-19 situation to build momentum on the green agenda and use the economic recovery that is undoubtedly needed to kick start and fund net zero projects.
What’s clear is that energy – and how it’s procured and managed by businesses – will be central to achieving this.
3. Businesses have a vital role to play
When it came to the role businesses will play, all our contributors agreed it would be vital - but only if sustainability moves from a functional to a strategic corporate target that is embedded in company culture, from the top of the boardroom through to all employees and the wider supply chain.
Energy efficiency, onsite generation, procuring green energy, reducing and shifting demand will all become more important, particularly as consumers become increasingly influential in calling out good and bad business practice.
In conclusion, if the last 10 years has told us anything, it is that it is difficult to anticipate what will happen. Nobody could have predicted that the UK would legislate for net zero by 2050, that we would exit the EU, or that the world would grind to a halt due to a global pandemic.
However, despite these disruptions, the decarbonisation agenda is only going to accelerate, and business energy users will have a key role to play, whether that is proactively managing their energy use and consumption, or investing in the new technologies that will help make the net zero ambition a reality.
npower's The Future Report 2020: The Road to Net Zero report can be read here.