14/12/2020

Article

Net Zero

Future of Energy

Industry & Market News

After months of anticipation, the government has today (Monday 14 December) finally published its long-awaited Energy White Paper.

“The UK has set a world–leading net zero target, the first major economy to do so, but simply setting the target is not enough – we need to achieve it,” says Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy in his foreword. But does the White Paper deliver this detail?

Putting meat on the bones

“Given the expectations around its publication, today’s Energy White Paper had to be ambitious and add some crucial ‘meat on the bones’ of the recent Ten Point Plan,” says Ben Spry, Head of Flexibility Services at npower Business Solutions.

“We were particularly looking for more around the delivery of transformative technologies such as hydrogen and Carbon Capture, Utilisation, and Storage (CCUS), as well as the huge increase of renewable generation needed to decarbonise the power sector and wider industry. By and large, it does deliver in these areas.

“Overall, the White Paper is a vital piece of the net zero jigsaw to turn ‘climate ambition into climate action’. And for many business energy users, it should provide them with more confidence to invest in their own road to net zero through green infrastructure such as on-site renewable generation and EV charging, as well as procuring energy from renewable sources,” continues Ben.

Detail for business lacking

But while the Energy White Paper dedicates chapters to the role domestic consumers will play, as well as power generation, the wider energy system, transport, buildings and the future of oil and gas, there is no specific section targeting businesses overall.

However, industrial energy does get its own chapter, with the acknowledgement that “by 2050, emissions from industry will need to fall by around 90 per cent from today’s levels”.

The aim is to therefore “create a sustainable future for UK manufacturing industry through improved energy efficiency and the adoption of clean energy technologies”. And to “establish the UK as a world leader in the deployment of CCUS and clean hydrogen, supporting up to 60,000 jobs by 2030”.

There is also a commitment to publish an Industrial Decarbonisation Strategy in 2021 to set out details of how the government will support the decarbonisation of the manufacturing sector.

UK emissions trading scheme confirmed

In terms of emissions trading, the White Paper confirms that there will be a continuation of the current EU Emissions Trading Scheme (EU ETS), with the establishment of a UK ETS – billed as ‘the world’s first net zero cap and trade scheme’.

“This provides some much needed certainty for energy intensive users, particularly in terms of investment in low-carbon technologies,” says Ben.

Saving 230 million metric tonnes of emissions by 2032

Overall, the Department of Business, Energy & Industrial Strategy estimates that the measures set out in Energy White Paper have the potential to reduce emissions across power, industry and buildings by up to 230 million metric tonnes by 2032, and enable further savings in other sectors such as transport.

But it does acknowledge that “more will need to be done to meet key milestones on the journey to net zero, including our ambition for Carbon Budget 6, which we will set next year, taking into account the latest advice from the Climate Change Committee.”

Net Zero Strategy still to come

It also says that in the run up to COP26 “we will bring forward a series of sectoral strategies, and our overarching Net Zero Strategy, which will set out more detail on how we will meet our net zero target and ambitious carbon budgets.”

The team at npower Business Solutions will be sharing more analysis and ‘take home’ messages for large business consumers over the coming weeks. For now, you can download a copy of the Energy White Paper.

Existing customers can also contact their Client Leads with any questions. Any other queries can be directed to business@npower.com.

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