Decarbonising the energy system – what does the Energy White Paper tell us?

The long-awaited Energy White Paper was published just before Christmas, following on from the Government’s recent National Infrastructure Strategy and Ten Point Plan for a Green Industrial Revolution, all to support the aims of tackling climate change and helping re-build the economy in the transition to net zero.

The White Paper is focussed around three key areas – the transformation of energy, supporting a green economic recovery and creating a fair deal for consumers. My colleague Jen Ashwell considers these in further detail below.

The Paper sets out various green goals (many of which are not new) including:

• A target of 40GW of offshore wind by 2030 (including 1GW of floating wind), including a focus on improving the regime for coordinating the connection of offshore wind farms to the onshore grid;
• Support for Carbon Capture, Usage and Storage (CCUS), including at least one power CCUS project by 2030 – as well as a consultation in 2021 to remove the 300MW threshold for this technology;
• At least one large-scale nuclear plant to reach FID (final investment decision) by the end of this Parliament, with the Government “remaining open” to further projects later, subject to demonstration of reduced costs and timely and cost-efficient delivery – no projects are specifically named, other than Hinkley Point C. Funding is also being provided for the development of small and advanced modular reactors;
• Increased use of electric heat pumps (although no clear strategy for this at the moment);
• Delivery of four low-carbon “industrial clusters” by 2030 and steps to decarbonise the manufacturing industry;
• Development of 5GW of low-carbon hydrogen production capacity by 2030 and a commitment to evaluate hydrogen as an option for heating homes and workplaces – a Hydrogen Strategy is due to be published in early 2021;
• An end to coal in the electricity mix no later than 2025 (possibly being brought forward to 2024) and a ban on new coal infrastructure projects;
• Consideration of new “negative emissions” technologies such as Bioenergy with Carbon Capture and Storage (BECCS) and Direct Air Carbon Capture and Storage (DACCS);
• Electricity storage will be given a legal definition and energy storage innovation will be promoted, particularly long-duration storage;
• The roll-out of electric vehicle charge points will be scaled up;
• Measures designed to help consumers, including saving money on bills, use of smart technology and increasing the energy performance and efficiency of homes and other buildings;
• A commitment to make the UK continental shelf a “net zero basin” by 2050 and a reduction in the use of oil and gas, but with a focus on re-purposing existing infrastructure and supporting the industry to work towards net zero.

There is a decisive shift away from the use of fossil fuels towards cleaner sources of heat and power. In order to enable this shift, the Paper states that electricity demand is likely to double, meaning a fourfold increase in low-carbon electricity generation. There is recognition that this will require significant changes to the energy system and network infrastructure, for example, to accommodate the production and use of clean hydrogen and the transport and storage of carbon dioxide from industry or power generation – as well as increased use of smart digital technology.

There is no particular generation mix being targeted by 2050, although it is acknowledged that the system is likely to be comprised predominantly of wind and solar, with nuclear, gas with CCUS, battery storage, demand side response and interconnectors all providing power when the wind is not blowing or the sun is not shining. Clean hydrogen and long-duration storage are said to be sufficient to ensure security of supply and eliminate the reliance on generation from unabated gas. New technologies such as floating offshore wind are being supported, although wave and tidal energy projects are only being “considered”, following further evaluation of the commercial and technical evidence.

It is promising that the Paper states that “onshore wind and solar will be key building blocks of the future generation mix, along with offshore wind” – could this mark the come-back of onshore wind in England and Wales? Further policy changes will of course be required to enable this to happen.

Capacity awarded in the next CfD (Contract for Difference) auction (late 2021) is set to double, and a Call for Evidence is being launched, seeking views on how the CfD scheme could evolve after the 2021 auction, which is likely to be welcomed by developers.

The Paper reminds us that the Environment Bill includes new legally binding environmental targets in relation to air quality, biodiversity, water, and resource efficiency and waste reduction – and confirms that these will be introduced by October 2022.

Importantly (and very ambitiously) there is a commitment to complete a review of the existing National Policy Statements (NPSs) by the end of 2021. This is a huge task but is much needed, with many of the current NPSs requiring updating.

The Paper tells us that DfT will publish its plan to decarbonise the UK’s entire transport system in Spring 2021, which will focus on six key areas, including the promotion of public and active transport and decarbonisation of vehicles and the freight system (road, rail and shipping).

A whole host of further strategies and plans are due to be published later this year with further details on how all of this can be achieved. The White Paper marks the start of “the green industrial revolution” and much more detail and information is still required but the strong support for clean and renewable energy is a breath of fresh, green, decarbonised air.

The energy white paper builds on the Prime Minister’s Ten point plan for a green industrial revolution. The white paper addresses the transformation of our energy system, promoting high-skilled jobs and clean, resilient economic growth as we deliver net-zero emissions by 2050.

https://www.gov.uk/government/publications/energy-white-paper-powering-our-net-zero-future