“Investment can drive an industrial renaissance,” enabling the transition to a decarbonised energy system, Ignacio Galán executive chairman of Iberdrola stated in his keynote address at the Aurora Spring Forum this morning.
This investment will be needed to tackle one of the biggest barriers facing the decarbonisation of the energy sector in the UK and beyond in particular: the grid.
With power consumption set to double by 2050, more low-carbon generation and flexibility assets will need to connect to the system to ensure this is met.
“We are not progressing with enough speed” noted Galán with regards decarbonisation and hitting key targets – the UK’s electricity system aiming to be net zero by 2035 for example.
In order to increase the pace of delivery and overcome key barriers such as infrastructure constraints, green investment needs to quadruple. This is despite 2022 representing a new milestone as investment in renewables came level to that in fossil fuels for the first time.
Additional actions to overcome key barriers include introducing clear incentive schemes, with lessons to be learnt from the Inflation Reduction Act in the US.
Green hydrogen could also benefit from an incentive regime, added Galán. He said that whilst targets introduced in the UK and Europe were positive, “it’s not enough” to truly spur the sector.
The hydrogen sector has been growing over recent years, encouraged by the UK Government’s Hydrogen Strategy and its inclusion of a 5GW of low-carbon hydrogen production by 2030 target.
ScottishPower – which is owned by Iberdrola – is one of the companies currently developing projects, including a project near the Lochgoin Reservoir in Scotland that is set to include up to 40MW of solar, along with up to 50MW of battery storage and a 20MW electrolyser.
Whilst there are barriers to the decarbonisation of the energy sector however, Galán ended an optimistic note.
There has been significant progress in the last two decades he said, and “we are only just getting started.”