Comment
The Energy White Paper: Christmas cracker or festive flop?
Eagerly awaited for much of 2020 and long overdue but the Energy White Paper has been delivered in time for the festive period.
Its publication builds upon and adds further details to the Prime Minister’s recently published “10-point plan” and the proposals set out within the National Infrastructure Strategy. It also marks a significant milestone in the UK’s net zero transition. However, it stops well short of delivering everything on the Christmas wish list and will leave some disappointed.
At over 170 pages long the paper addresses a range of issues relating to the generation, supply and use of energy with the drive towards net zero by 2050 at its core, along with energy efficient buildings and lower household bills. It signals a decisive move away from fossil fuel generation and highlights how planned Government investment has the potential to leverage billions more in private sector funding and support over 250,000 jobs in the green economy by 2030.
In this comment, Director, Mark Worcester provides an overview of the headlines and implications for the energy generation sector.
Decarbonisation of the UK Economy sits at the heart of the White Paper with the key commitments relating to energy generation infrastructure being as follows:
Targeting the delivery of 40GW of offshore wind generation by 2030, including 1GW from floating offshore wind alongside the expansion of “other low cost renewable technologies”.
Releasing a dedicated hydrogen strategy by the spring of 2021 and supporting the delivery of 5GW of hydrogen production capacity in partnership with industry by 2030.
Aiming to bring forward one large scale nuclear project to the point of Final Investment Decision by the end of the current parliament. There is also commitment to funding for the next generation of nuclear technology aiming, by the early 2030s, to develop a Small Modular Reactor design and to build an Advanced Modular Reactor demonstration project.
Supporting the deployment of one Carbon Capture Utilisation and Storage Project by 2030 and putting in place the commercial frameworks necessary to stimulate a future pipeline of such developments. The initial project is to be delivered in one of four low carbon industrial clusters.
Accelerating the commercialisation of innovative low carbon technologies through the £1billion Net Zero Innovation Portfolio through the prioritisation of investment in advanced modular reactors, floating offshore wind, hydrogen production, energy storage and advanced CCUS.
Establishing the role Biomass Energy generation with carbon capture and storage can play in supporting the energy transition. A call for evidence will be issued ‘shortly’, followed by a preliminary position paper in summer 2021 and a Biomass Strategy by 2022. The Government also intends to fund further investment in the deployment of Greenhouse Gas Removal Technology.
Designating new National Policy Statements for Energy by the end of 2021.
As noted, the White Paper does of course address a range of other related matters. These include: transport, including the roll out of charging and associated grid infrastructure along the strategic road network to support the transition to electric vehicles; energy systems, including proposals to reform the process for building, owning and operating the onshore electricity distribution and transmission network; buildings, including ensuring that all new-build homes are zero carbon ready; and proposals for further funding for the Heat Network Transformation Programme.
In overall terms the scale of the Government’s ambition is to be warmly welcomed and after many delays there is now something of a route map which defines the way forward. In terms of energy generation the Government’s belief in and commitment to offshore wind has become increasingly clear during the course of 2020. This is perhaps understandable given the falling costs of deployment and levels of energy generation which stand to be realised, alongside the associated economic benefits which can be captured through increasing the level of UK content (target 60%) within the manufacturing supply chain. In addition, there is potential to use the electricity generated for the production of “green hydrogen”.
The emphasis on hydrogen production and nuclear energy generation is understandable for broadly similar reasons, although doubts still remain as to whether the nuclear option represents value for money in comparison to other technologies. Whilst the Government has commenced negotiations with EDF to build another nuclear power plant at Sizewell in Suffolk both nuclear and hydrogen represent longer term plays however, and it is therefore extremely disappointing to see only very limited and passing reference to the role of more established technologies in the energy generation mix, particularly in the immediate term. Onshore wind and solar are described as being the “building blocks of the future generation mix” and that “sustained growth” of each will be needed during the next decade, although the level of support expressed (when compared with the other technologies) is relatively muted: we can only see a single reference to each within the document.
More explicit support for such technologies would have been widely welcomed, not least because the EWP will likely inform the content of the revised National Policy Statements for Energy over the course of the next 12 months, which in turn will likely influence the direction of travel on other policy documents. This was the opportunity for Government to lay the foundations for an adjustment to the National Planning Policy Framework for England and it hasn’t been taken.
If the majority of our energy generation capacity is to be provided by renewable technologies by 2050, a planning system which provides “in principle” support for all forms of renewable energy generation (subject to the usual checks and balances) is essential. As mentioned in our earlier commentary the continuation of the existing effective moratorium on the delivery of onshore wind in England appears increasingly incongruous by the day and has the potential to be something of an embarrassment to a Government hosting COP26 in the summer of 2021.
At the more positive end of the spectrum it is encouraging to see that the potential for wave and tidal energy is to be the subject of further evaluation, as are the opportunities for the production of hydrogen from renewables (“green hydrogen”).
We also welcome the support for the deployment of energy storage facilities. As demand for electricity supply increases in the coming years, and as more of that supply is provided from renewable sources, the need for sufficient storage capacity will become increasingly critical. The intention to launch a major competition to accelerate commercialisation of longer duration storage facilities is of particular interest.
Plans for the formation of a Ministerial Delivery Group to oversee the expansion of renewable generation in the UK and to tackle the barriers to deployment are somewhat curious and we can suggest where they might wish to start.
Overall, the publication of the Energy White Paper represents a significant milestone and its provisions as a whole are to be warmly welcomed. There is strong support for offshore wind, hydrogen, nuclear and energy storage. The potential for contributions from biomass (with CCUS), wave and tidal is to be subject to further evaluation. The support for more established forms of renewable energy generation could be more strongly expressed and in this regard will leave many in the onshore wind sector disappointed.
Please contact Mark Worcester to discuss planning for renewable energy schemes.
15 December 2020