The government’s energy white paper has today been published, detailing its decarbonisation plans across the entire economy.
It builds upon the Prime Minister’s Ten Point Plan, which was released last month and included pledges to create 250,000 jobs, bring forward the ban on sales of new internal combustion engine cars to 2030 and target 600,000 heat pump installations per year by 2028 among others.
The government has acknowledged that “there is more to be done to meet key milestones on the journey to net zero” beyond the white paper, making reference in the document to the sixth carbon budget as an example, with the government to set out its ambition for this next year.
Power generation: Renewables, nuclear and CCS
Alongside previously announced goals such as the 40GW of offshore wind by 2030 target, the government revealed it will be establishing a Ministerial Delivery Group to bring together relevant departments to oversee the expansion of renewables in the UK. It will provide cross-government coordination and collaboration, working to tackle barriers such as the development of appropriate network infrastructure to support future renewables deployment and reduce consenting delays.
The government will also be issuing a new Call for Evidence on how the Contracts for Difference (CfD) scheme could evolve past 2021, including how longer-term changes to the CfD or wider electricity market design can enable effective integration of increasing renewables capacity.
The next round of the CfD (AR4) is to include established technologies such as solar and onshore wind to compete for the first time since the initial round, with plans for over 12GW of new renewable capacity to be supported.
The CfDs – alongside innovation funding – are also to support an ambition of deploying 1GW of floating offshore wind by 2030, a target decided following a recent Call for Evidence.
The government also reiterated its ambition to create four carbon capture clusters by 2030. To support this, £1 billion will be invested up to 2025, with CCS to be deployed at two industrial clusters by the mid 2020s and two by 2030.
Bioenergy with carbon capture and storage (BECCS) also found its way onto the energy white paper’s agenda, with ambitions of establishing the role it can play in reducing carbon emissions across the economy by 2022. Currently, BECCS is being deployed by Drax at Drax Power Station.
Energy storage was also mentioned, with the government to define electricity storage in law, legislating when Parliamentary time allows. It will also launch a major competition to accelerate the commercialisation of first-of-a-kind long duration energy storage through the £1 billion net zero innovation portfolio, which was announced in the Ten Point Plan and is designed to accelerate the commercialisation of innovative low carbon technologies, systems and processes in power.
Plans to further support nuclear also featured, with the government aiming to build a commercially viable fusion power plant by 2040. It will support EDF’s Sizewell C nuclear project, with the government to enter negotiations as it considers options to “enable investment in at least one nuclear power station by the end of this Parliament”, and is to create an Advanced Nuclear Fund of up to £385 million to support the development of Small Modular Reactors.
Heat, EVs and the energy networks
Both the decarbonisation of heat and transport saw reiterations of previous commitments. For heat, the government pointed to its plans to grow the installation of electric heat pumps from 30,000 a year to 600,000 a year by 2028. It will also consult on whether it’s appropriate to end gas grid connections to new homes being built from 2025 in favour of clean energy alternatives, having announced in March 2019 plans for the Future Homes Standard, which would ensure new homes would be built with low carbon heating from 2025.
For transport, it made reference to the £1.3 billion committed to the electrification of transport, announcing that of this, £950 million will go towards future proofing grid capacity along the strategic road network.
A national bus strategy is to be published early next year, setting out plans to transform the sector, which includes plans for greener buses as well as simpler fares and improved routes.
Further detail on the government’s plans for the decarbonisation of transport is expected to be released in the upcoming Transport Decarbonisation Strategy.
Meanwhile, for the energy networks the government will legislate – when Parliamentary time allows – to enable competitive tendering in the building, ownership and operation of the onshore electricity network.
It will also publish a new Smart Systems Plan – building on from 2017’s Smart Systems and Flexibility Plan – in spring 2021. This new plan will include new framework for monitoring flexibility across electricity markets.
Data and energy system modelling
The government is to implement all of the Energy Data Taskforce’s recommendations through a joint programme with Ofgem and Innovate UK titled Modernising Energy Data. These recommendations – released in June 2019 – include directing the sector to adopt open data, creating an asset registration strategy and creating a unified digital system map of the energy system.
The prototype of a national energy data catalogue is to launch in summer 2021, and the government is intending to work in partnership with Ofgem to build world-leading digital infrastructure for the energy system. The duo will publish an energy data and digitalisation strategy in spring 2021.
The government is also to set up and test a protocol for publishing its energy system models, and will develop and implement its IT strategy to make it easier for analysts, contractors and collaborators to develop and maintain models by harmonising development languages and providing a development environment for its partners.
Consumers
When it comes to consumers, the government intends to ensure consumers are provided with more transparent and accurate information on carbon content when choosing their energy service and products, consulting on reforms in early 2021. This follows energy supplier Good Energy calling on the government last week to end so-called ‘greenwashing’, with Ofgem telling Current± it will “step up our monitoring in this area”.
The government will also test automatic switching, with a series of consultations in spring 2021 to create the framework to introduce opt-in switching, as well as to consider reforms to the current roll-over tariff arrangements, as well as a call for evidence to begin a strategic dialogue between government, consumers and industry on affordability and fairness.
There will also be a £6.7 billion package to support the lowest paid with their energy bills. This includes extending the Warm Homes Discount to 2026 to cover an extra three quarters of a million households and giving eligible households £150 off their electricity bills each winter.
Energy secretary Alok Sharma said the white paper “establishes a decisive and permanent shift away from our dependence on fossil fuels” and will put the country “at the forefront of the global green industrial revolution”.
“Through a major programme of investment and reform, we are determined to both decarbonise our economy in the most cost-effective way, while creating new sunrise industries and revitalising our industrial heartlands that will support new green jobs for generations to come.”
The energy white paper also detailed the UK’s ETS, which will be the world’s first net zero carbon cap and trade market. The government said the scheme is more ambitious than the EU system it replaces, as from day one the cap on emissions allowed within the system will be reduced by 5%. It is to consult in due course on how to align this with net zero.
