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Current± Predicts: The energy transition in 2022, part three

Good Energy's Pocklington is predicting increasing renewable energy diversification. Image: Good Energy.

Good Energy's Pocklington is predicting increasing renewable energy diversification. Image: Good Energy.

Dr Rebecca Heaton, director of sustainability, OVO

The impact of energy reform

The energy retail market will emerge from a difficult winter with the opportunity to re-shape the role that the sector can play in reaching net zero. 2022 will be a once in a generation opportunity to reform regulation and return stability to the market so suppliers can play a broader role in accelerating the net zero transition by offering energy tariffs, products and services at scale that support consumers to decarbonise their home energy use . We'll see more energy retailers taking a much more active role in bringing consumers along this journey.

Progress from COP26

The world's eyes were on Glasgow in November 2021. Big announcements were made including the end of coal. Over 40 countries plus organisations including banks have committed to phase out coal fired power generation and stop public financing of overseas coal generation plants. For us, a successful COP26 means agreement on lasting action – adopt greener habits, kick the coal habit entirely by 2030, abandon fossil fuel powered car engines, and help to restore our green spaces by planting more trees across the world. As we head into 2022 generations of all ages will be watching to see if the pledges made will be kept.

Pump It Up

Earlier this year, both the UK and Scottish governments published their long awaited heat and buildings strategies. Now there is greater policy certainty on the roll out of heat pumps in homes, we should see households and industry respond in 2022. A key moment will be the opening of the new Boiler Upgrade Grant scheme in England. This will see households being offered the opportunity to apply for a £5,000 grant towards the cost of a heat pump installation.

Next year there will also be continued debate around the high cost of electricity in relation to its fossil fuel equivalent - gas - and how to address this. The UK Government has said it would make a decision in 2022 on whether to shift levies on electricity bills onto gas bills.

Nigel Pocklington, CEO, Good Energy

Over dependence on gas will shift to diverse renewables

In our research report Renewable Nation published earlier this year we modelled a UK energy system that relies on renewables to reach our net zero carbon goals. The big hurdle was the ‘once in 10 years’ weather event with prolonged low wind in winter. We didn’t expect to see a similar crisis occurring only a few months later, but it threw a spotlight onto the UK’s over reliance on global gas markets and made clear our proposed solution: diverse renewable technologies, with lots of storage and flexibility. We have already started to see the gates open to tidal power and expect to see the real momentum for marine and geothermal technologies as well storage in 2022.

Crackdown on greenwash

Whilst the wider energy retail market has largely ground to a halt, the wheels are still in motion for the crackdown on greenwash. We have just seen the call for evidence on carbon content transparency close, and will be expectantly waiting on the next steps. But broadly the conversation has shifted from ignoring the problem of mis-sold energy tariffs to recognition that selling fossil fuel power bundled with REGOs as ‘100% renewable’ is nothing short of a consumer protection scandal. Longer term we may see digitally enabled half hourly carbon tracking, but shorter term — as in in 2022 — we need to make sure suppliers selling ‘renewable’ are sourcing renewable.

Rebalancing bills

We are expecting government to make a decision on rebalancing levies on energy bills from gas to electricity. Putting low carbon electricity at a cost disadvantage to gas makes even less sense in today’s context than it did a year ago, and shifting the balance could unlock huge potential in electrification of heat and transport.


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