The government’s announcement today of a “10 point plan” is a very welcome, and much needed, clear direction to set us on the transition to net zero and provide stimulus, jobs and optimism following the Coronavirus pandemic.
The energy sector is ready to meet the stretching targets set out in this new plan, but these ambitions need to be backed up with enabling policies. The Energy White Paper, Heat and Buildings Strategy and Transport Decarbonisation Strategy must put in place the detailed delivery plans to make the Prime Minister’s ambitions a reality. We have four key policy asks to deliver the goals in the 10 point plan:
- publish the Energy White Paper as soon as possible, setting out a vision for a smart, flexible, decentralised energy system. This should include commitments to annual CfD rounds to support solar, offshore and onshore wind
- introduce a long-term support mechanism to underpin energy efficiency and heat decarbonisation, with funding coordinated at a local level
- provide incentives to switch to low carbon heating and upgrade energy efficiency, starting with redistributing distorted carbon levies between electricity and gas bills
- ensure price controls and local energy planning allow energy network operators to invest in infrastructure to enable net zero, including increased demand from electric vehicles and heating
The cost of renewable energy is falling rapidly, and quickly becoming cost competitive with fossil fuel generation and significantly cheaper than nuclear. The cost of flexible technologies to support a renewable system are also decreasing, with storage able to compete on price with gas peakers. A flexible grid, with high renewable penetration, supported by storage, interconnectors and demand-side response is fast becoming the cheapest option for a net zero energy system.
Building this renewable grid and decarbonising our building stock, will create hundreds of thousands of new jobs and bring much-needed investment to the UK. Our analysis shows that the huge amount of shovel-ready renewable generation and storage projects in the development pipeline could bring over 200,000 jobs in areas such as construction and operation, adding over £1.25bn of value to the economy.