Utility Week

UTILITY WEEK | JANUARY 2021 | 15 Policy & Regulation tions when seeking planning permission and not just those 300MW or bigger, which is the current cut-o point. O shore wind expansion Like the government that it advises, the CCC emphasises the central role that o shore wind will play in the future generation mix, describing it as the "backbone" of the UK's future energy system. The statutory adviser calculates that up to 140GW of o shore wind will be required by 2050 to help decarbonise the electricity system. More than half the emissions savings planned over the next 15 years are due to be delivered by adopting low-carbon alterna- tives, like electric vehicles and heat pumps, as fossil fuel hungry options are phased out. Rapid electriŠ cation is the pre requisite to driving down emissions from yet-to- decarbonise sectors like transport and home heating, says Josh Buckland, former energy adviser to Greg Clark when he was energy secretary. He says it is "really good" to see the increased level of the CCC's ambition The CCC's recommendation on gas-Š red power stations is at the punchy end, though, some experts argue. Modelling carried out by consultancy Aurora for a recent Policy Exchange report assumed that gas reciprocating engines would still be on the grid in 2050, even if they were generating rarely. Buckland, who is now a director at pub- lic a airs company Flint Global, says: "The question is whether we are absolutely sure that we can run in a reliable way a larger energy system by 2035 without using peak- ing gas even for few hours a year. "The view in government was that we would need always need an element of gas back-up on the system and would need to turn quite lot on in the winter when it's really cold. "It is not unreasonable, but the only question is whether it's feasible by 2035," he says, adding that the phase out means reliance on a signiŠ cant amount of electricity storage. One of the CCC's key conclusions, though, is that the dramatic cut in emissions that it envisages is a ordable. A year and a half ago, it calculated that achieving net zero by 2050 would cost more 1™ to 2 per cent of GDP per annum over the next 30 years. This estimate has now been stabilised at 1 per cent. The main factor driving this reduction is the plunging cost over the past year of low carbon technologies, notably o shore wind, as revealed in recent contract for di erence (CfD) auctions. "At worst, we have a very small cost over- all to unlock the very big beneŠ ts of tackling climate change," Stark says. Some of this extra cost can be recouped at the societal level by the cheaper day-to- day costs of using electricity rather than fuel to run cars and home heating, according to the™CCC. Stark says: "It would amount to the loss of three months of growth over the next 100 months. It's totally worth it: the costs are lower than previously thought they would be and in reality close to zero if we can capture economic beneŠ ts of that transition." However the pressure is on to deliver. The CCC says that in order to reach net zero it makes sense, given that the harder to decarbonise areas like transport and heavy industry are tougher, around 60 per cent of decarbonisation must happen by 2035. The concentration of this heavy li¡ ing will mean the UK faces a net-zero Š nancing gap of around £50 billion per annum by the end of this decade. Who will pay? Lawrence Slade, chief executive of the Global Infrastructure question is whether it's adding that the phase out Investor Association, says that the govern- ment envisages the private sector providing the bulk of the required investment. "People were expecting huge numbers without realis- ing the emphasis that the government is put- ting on attracting private Š nance," he says. Even if this is the case, the consumer or the taxpayer will ultimately have to support this investment, says Matthew Lockwood, senior lecturer in energy policy at Sussex Uni- versity. "Whether it's large scale infrastruc- ture investment or putting in heat pumps, someone will have to pay for it," he™says. One option is for consumers paying through their bills, the preferred option over the past decade through support mecha- nisms like the CfD, which has proved so suc- cessful in helping to push down the costs of o shore wind. However reliance on bill subsidies is ulti- mately "very regressive", says Lockwood, while that support through taxation also places too great a burden on the current generation. "Both bills and taxes risk a political backlash, the obvious example is the gilet jaunes," he says, referring to the French pro- test movement that was sparked by anger about increased fuel levies. A more palatable option for the govern- ment could be to pay for the investment through government borrowing, he says: "The political risks from debt is much lower." continued overleaf "Greater emissions reduction must be achieved over the next 30 years than throughout the previous three decades"

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