Utility Week

8 | 21ST - 27TH JUNE 2019 | UTILITY WEEK Policy & Regulation Analysis T he adoption of the net zero target gives the next British prime minister brag- ging rights in international climate change diplomacy circles, putting the UK in pole position to host next year's UN climate change talks. The move to adopt the net zero target, which means reducing emissions to such a low level that the remaining residues can be absorbed by tree planting or CCUS (car- bon capture, use and storage) technology, is undoubtedly a big moment in UK energy and environment policy. Keith Anderson, chief executive of Scot- tish Power, hailed the announcement as a "massive step forward" at last week's Util- ity Week Energy Summit (see p7). Michael Lewis, chief executive of Eon UK, told dele- gates that it gives a "very clear idea of where we need to get to". Tom Thackray, director of infrastructure and energy at the Confederation of British Industry (CBI), told a meeting of the House of Commons BEIS (Business, Energy and Indus- trial Strategy) select committee last week that the business body was "delighted" to see adoption of the net zero target "In a matter of months, we've seen a massive change in how people view climate change," said Energy UK chief executive Lawrence Slade. However, while setting the target is impor- tant, the hard work begins now – on the road to 2050. "It's one thing making the announce- ment, and the rhetoric around that," he said, "but it needs urgent follow-up." Thackray agreed: "Having that target enshrined in legislation is really important, but it's not sufficient on its own. It needs to be backed up with policy frameworks." David Joffe, who authored the UK Com- mittee on Climate Change report recom- mending the adoption of the 2050 net zero target, said: "There's lots of progress that we need to make and need to make quickly." "If we don't make progress on infrastruc- ture, we won't be able to do it because there won't be enough time," he said, namecheck- ing electric vehicles, hydrogen and storage as three areas where rapid progress is vital. "The time for analysis is over. We know roughly what we have to do, we don't need to know how to do it to the nth degree." One problem, though, is the world of dif- ference that exists between the long-term ambition announced last week and the immediate chaos engulfing what is currently a rudderless government. "It would be difficult for a government with full bandwidth available and we know that's not necessarily the case at the moment," said Joffe, although he added that it's "not beyond government's ability to get on with things". Anderson suggested the existing policy regime was looking increasingly creaky, given the scale of the challenge it faces. "There are some inconsistencies and unintended consequences in the system," he said, identifying the cap on the amount of renewable generation that can be purchased in contracts for difference (CfD) auctions and the exclusion of onshore wind from this process. Tom Glover, UK chair of RWE, told the summit he was "pretty sure" that if the gov- ernment gets rid of the current 6GW cap on renewable electricity in each CfD round, the industry could deliver more low-carbon electricity. And the increasingly hard to ignore ele- phant in the room when it comes to discuss- ing net zero is the government's block on allowing onshore wind and solar projects to compete in CfD auctions. Glover said: "We need a policy framework from the government and price stability for onshore wind." For Anderson, this pointed to the govern- ment getting on with the publication of its energy white paper, which BEIS secretary of state Greg Clark said would be out in the summer. "This makes the push to get the energy white paper out very important. Setting tar- gets and committing to things like net zero are important but having a framework is essential. The sooner that is out the better." The CBI's Thackray told the select com- mittee that it was "really important" for the government to publish the energy white paper before parliament's summer recess next month. Utility Week understands from sources close to government that the white paper is virtually ready. What is holding up pub- lication is the uncertainty surrounding the department's ministerial team, given that the new prime minister will conduct a reshuffle when he is elected next month. Given the broader political shenanigans at Westminster, Anderson expressed doubt at last week's summit that the white paper would be published this summer. "Unfortunately, it's going to be kicked down the road and will be caught up in the new prime minister and further conversa- tions around Brexit." As well as setting out a direction of travel on policy, the white paper is also an impor- tant tool in beginning to engage the public and government in the challenges involved in delivering net zero. The need for public buy-in In order to deliver the far-reaching changes entailed in reaching the net zero target, like converting domestic gas boilers to lower car- bon alternative heat pumps, the level of pub- lic debate will have to improve, said Joffe: "We've made a lot of progress in the power sector in terms of electricity but we can't do it all without people noticing." Getting the public on board will require mobilisation across Whitehall, he said: "We need engagement across government depart- ments, not just BEIS and the Treasury but DfT [the Department for Transport] and the Department of Health." How much this may be needed was underlined by the internal government spat that took place in the run-up to last week's net zero announcement. The Treasury signalled its concerns about the ramifications of the target for the economy in a leaked letter showing that reaching net zero would cost £1 trillion by 2050. The row has revived concerns that the Treasury is reverting to climate change sceptic type. Net zero emissions by 2050 Last week, the government committed the UK to becoming the first major world economy to fully decarbonise – net zero. David Blackman examines what that means in practice.

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