The Green Industrial Revolution – A Moorhouse perspective 

Prime Minister Boris Johnson has outlined the Government’s ambitious Ten Point plan for what they’ve called a “Green Industrial Revolution” that will also create 250,000 jobs.

The announcement puts the UK at the very forefront of measures being put in place to tackle climate change, which is great news for not just the environment, but the UK economy. It also comes ahead of the United Nations Climate Change Conference, also known as COP26, which the UK is hosting next year. 

Despite the impact of COVID-19 the environment has still been high up on the agenda for many, and early reaction from business, green groups and energy organisations has largely been supportive. The general view is that it provides much needed clarity to how the UK will achieve net zero. Whilst the focus of the media has focused on the ban on diesel and petrol cars by 2030 there is much more in the proposal as set out in the highlights below:

  • Quadrupling the output of offshore wind to 40GW by 2030
  • Generating 5GW of low carbon hydrogen production capacity by 2030 for industry, transport, power and homes
  • Advancing nuclear as a clean energy source through both large and small scale advanced reactors
  • Supporting difficult-to-decarbonise industries such as maritime and aviation to become greener through research projects 
  • Making our homes, schools and hospitals greener, warmer and more energy efficient
  • Becoming a world-leader in technology to capture and store harmful emissions away from the atmosphere

A Moorhouse perspective

Obviously it is fairly easy to pick holes in what is a high level proposal – for example, what is the roadmap for these commitments and what are the supporting actions to get us there. Some groups have also stated that the objectives will be difficult to hit and that in some areas the plans don’t go far enough. Here is Moorhouse’s view on some of the key points:

  • It is looking very positive for wind energy. The UK is up there as being one of the market leaders and is in line with the commitment made in the Wind Sector Deal. However there is a risk a lot of this investment will go overseas as a large proportion of the components are manufactured outside the UK.
  • The 5GW aim by 2030 for hydrogen is hugely ambitious in what is still a relatively new technology that is in the early stages of development and testing where there is no certainty of its viability. The ESO's 2020 Future Energy Scenarios report1 has indicated that hydrogen must be deployed for net zero, however they have indicated a forecast of between 3 -263MW installed capacity in 2030, which presents somewhat of a gap to the 5GW commitment. 
  • Regarding nuclear, the Future Energy Scenarios 2020 report forecast a steady increase in new capacity after 2033 in order to achieve net zero. But as we know from Hinkley Point C and now Sizewell C these types of projects can be difficult to get off the ground. Whilst the announcement provides investment stability for nuclear we are still met with the challenge of how they will be delivered. 
  • Homes and heating has been high up on the agenda for some time, and it is also one of the most difficult to implement. Replacing heating systems in people’s homes is a huge and costly undertaking especially when we have seen the challenges of rolling out even smart meters across the UK.  
  • The ban on all new petrol and diesel cars by 2030 (hybrid to be phased out by 2035) will create a huge increase in electricity demand across the network. Can the volume of generation support that demand and how will the grid cope are key questions to be answered? Coupled with bringing public transport and heavy industry onto the grid there is going to by huge demand on the system. In addition, there was no mention of Vehicle to Grid and how that could support the network to deliver the demand2 which we hope will be something that will be provided in the further detail.
  • Carbon Capture, Usage and Storage has been targeted around predominantly the North of the UK to support the economic transformation of the UK’s industrial regions. This is great news for the area that is really pushing the net zero north agenda. In terms of location, it allows for the captured carbon to be permanently stored in the North Sea’s depleted oil or gas fields.

Whilst we’ve talked about the UK being a leader in this space there are some areas for concern. There was no commitment made by the government to stop investing taxpayer’s money in fossil fuel projects. In addition, recently a global NGO accused UK Export Finance of breaching OECD guidelines by supporting overseas fossil fuel projects3. There is also concern that much more funding is required to meet the aggressive net zero targets4 and off the back of the Government’s commitment to spending £16.5bn on Defence it is only going to highlight this as an issue. It potentially doesn’t create the best optics that we are spending much more on our defence than the environment. 

As the paper sets out there is a lot more that is needed to meet carbon net zero, but this is a strategy the whole of the UK can really get behind and it is a huge step in the right direction. We look forward to the next steps that the Government has set out which will provide further detail and clarity with the publication of the Energy White Paper and a number of supporting strategies.

Authors:

Edward Charlish & Jemma Williams

1 https://www.nationalgrideso.com/future-energy/future-energy-scenarios/fes-2020-documents 
https://www.ovoenergy.com/electric-cars/vehicle-to-grid-charger
https://www.theguardian.com/business/2020/mar/17/global-witness-accuses-uk-of-rank-hypocrisy-on-fossil-fuel-projects
https://www.imperial.ac.uk/news/208933/imperial-experts-react-plan-green-industrial/

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