The National Audit Office (NAO) has called on the Department of Energy Security and Net Zero (DESNZ) to review plans to achieve its offshore wind and nuclear power expansion within the next 12 months.
This has been revealed via the organisation’s Decarbonising the power sector report, which reviews the UK’s current roadmap and targets in achieving net zero as well as the measures that could be taken to reach this.
The UK government has set a target to deliver up to 24GW of nuclear capacity by 2050 and up to 50GW of offshore wind capacity by 2030. These represent a vast increase on the current generation levels associated with each technology today.
For offshore wind, the report stated to achieve up to 50GW by 2030, this would require a three times increase on the deployment levels witnessed in the last two decades.
Adding further complications to decarbonisation prospects, the NAO report also believes the newly formed DESNZ office has been neglecting long term targets to focus on ongoing affairs. DESNZ planned internally to prepare a first draft of its delivery plan to decarbonise power by October 2022. This could have been instrumental in supporting the sector in decarbonising the power system ahead of the proposed 2035 target.
The report stated: “DESNZ has not yet established a delivery plan to decarbonise power because it has prioritised responding to recent energy sector challenges.
“During 2022, DESNZ prioritised developing and implementing responses to recent record-high energy bills and it therefore scaled back its work on coordinating long-term power sector decarbonisation. It told us it still has more work to do to develop a delivery plan.”
Despite DESNZ revealing it intends to create this delivery plan in the near future, vital time has been lost and a greater urgency to create the documentation is paramount for the sector.
Another crucial challenge set to impact the decarbonisation of the power sector is the costs that will be associated. In the UK’s Net Zero Strategy, the government estimated that between £280 billion and £400 billion of public and private investment will be required to create new generating capacity by 2037.
These costs only represent construction costs for power generation and do not include the costs for all aspects of the development. This can include network construction and research and innovation on technologies. This could lead to costs being significantly higher than those forecasted.
“Total costs will depend on factors including the location of new generation, the impact of any reforms to the electricity market and the effect of efforts to align consumer demand with supply. DESNZ has set stretching ambitions for the expansion of offshore wind, solar and nuclear power, which require much faster deployment rates than have been achieved before,” the report said.
NAO also believe that the power system needs to modernise in order to accommodate different kinds of electricity generation and must update costs to incentivise this. The report said that “renewables have a very different economic model from gas-fired power stations” primarily due to relatively low running costs.
Currently these prices are not reflected in the price consumers have to pay for electricity due to market arrangements for buying and selling electricity. NAO noted that DESNZ is currently exploring methods to reform the electricity market to rectify this.
NAO outlined a number of recommendations that could be implemented into the delivery plan for a decarbonised power system. This includes establishing how it will ensure the system is resilient during periods of prolonged low generation from renewable and ensure it has understood the main links between different aspects of decarbonisation whilst setting out how this will be managed.
