Energy White Paper: rapid energy decarbonisation is vital to net zero

Today, the Aldersgate Group welcomes the Energy White Paper’s recognition of the central role of rapid energy decarbonisation in creating a net zero economy. To build on today’s important announcements and put the UK on a credible pathway to net zero, the Government should focus in 2021 on aligning the UK ETS with the net zero goal, create the conditions for full power sector decarbonisation by 2035 and develop market mechanisms to stimulate greater private investment in low carbon buildings and heavy industry.

Nick Molho, Executive Director at the Aldersgate Group, said: “The Energy White Paper should be commended for looking beyond just energy and recognising the central role of the power sector in supporting the decarbonisation of a wide range of sectors, including heating, transport and heavy industry. In many ways, the Energy White Paper sets out a low carbon industrial strategy vision for the UK and is based on the right premise that achieving net zero emissions can deliver significant supply chain growth and job creation across many regions of the UK.

The commitment to a UK Emissions Trading Scheme and the ambition to fully decarbonise the power sector are both welcome, but it is clear from the sixth carbon budget that we need a zero carbon power sector by 2035, together with significant investments in grid reinforcements, storage and flexibility services. All of these areas need to become policy priorities in the early 2020s, alongside the development of a carbon price trajectory aligned with the net zero target and a strategic approach to marine planning to support the rapid and environmentally sensitive deployment of offshore wind.”

Nick Molho added: “The Government rightly recognised today that progress in energy efficiency and low carbon heat deployment must be accelerated after years of stagnation. Beyond the support provided by the Green Homes Grant, it is essential that binding regulatory standards and supportive fiscal incentives are introduced to stimulate private investment over the next 15 years to retrofit the nation’s buildings and 28 million homes. Low carbon heating installation should become the norm by the early 2030s, and the Future Homes Standard needs to set ambitious requirements in this regard for new buildings from 2025.” [1]

Nick Molho concluded: “Significant job creation can be achieved through the decarbonisation of the energy sector and heavy industry, where market mechanisms will be rapidly needed to grow demand for low carbon industrial goods. Supporting the transition of workers from oil and gas towards marine renewables, hydrogen production and carbon capture and storage is therefore essential. This should form part of a broader national strategy to plug the UK’s low carbon skills gap and ensure that the current and future workforce are provided with the skills and re-training they require to access employment opportunities in the transition to a net zero emissions economy. The Aldersgate Group looks forward to supporting the Green Jobs Taskforce in this regard.” [2]