Monday 14 December 2020

Government launches long-awaited Energy White Paper

Government launches long-awaited Energy White Paper

The government has launched its long-awaited Energy White Paper to clean up the nation's energy systems and ensure the journey to net zero by 2050 is achievable and affordable.

The white paper expands on Prime Minister Boris Johnson's recently announced Ten Point Plan for a Green Industrial Revolution and sets out the steps needed to cut emissions from industry, transport and buildings by 230 million metric tonnes.

Green jobs

The Energy White Paper commits to supporting up to 220,000 jobs in the new, greener economy over the next decade, with positions ranging from employment in major power generation, carbon capture storage and hydrogen projects, in addition to a nationwide programme to retrofit homes and buildings with energy efficiency and clean heat technologies.

Shifting from fossil fuels to a net zero system

The plan promises to overhaul the entire energy system and aims to retrofit millions of homes, electrify transport with renewables, double electricity use instead of oil and gas and bolster renewable energy supply.

Keep bills affordable

The government has promised to make the energy retail market "truly competitive" by offering customers more simple methods of switching to cheaper energy tariffs, and tackling “loyalty penalties” by automatically switching consumers to fairer, cheaper deals - this system will be trialled to test its effectiveness in the market.

Emission-free electricity by 2050

The Energy White Paper commits to all electricity being emission-free by 2050 and sets the country on target for an "overwhelmingly decarbonised" energy system by 2030 to ensure it remains on the right trajectory for the final goal. It states low carbon power is a "key enabler" of the more sustainable economy of the future and notes demand for clean electricity is forecast to double in order to decarbonise the transport and heating sectors.

UK Emissions Trading Scheme

The government promises to set up a UK Emissions Trading Scheme (UK ETS) from 1 January 2021 to replace the current EU model. This will aim to drive progress on cutting emissions and will ensure the vital continuation of emissions trading for UK businesses and give them certainty about the path forward.

Financing options for new nuclear

The plan commits to exploring new, innovative financing options for new-build nuclear energy facilities - this could include the Regulated Asset Base (RAB) funding model, which could help secure private investment and save consumers money long-term. It also says the government will "consider the potential role of government finance during construction, provided there is clear value for money for consumers and taxpayers".

As well as the Energy White Paper, the government has also confirmed it will begin negotiations with French energy giant EDF regarding the proposed Sizewell C nuclear power plant in Suffolk.

Deliver 40GW of offshore wind by 2030

The Energy White Paper reaffirms the Prime Minister's commitment to deliver enough wind capacity to power every home in the country by 2030 - this would consist of 40GW of offshore wind, including 1GW of floating wind.

Investing £1 billion in carbon capture and storage (CCS) by 2030

This investment will be spread across four low carbon industrial clusters by 2030 and at least one net zero cluster by 2040. The technology would be used to directly capture emissions from factories and other heavy industry before they enter the atmosphere. The investment is expected to drive new investment and attract new manufacturers to the UK's industrial heartlands.

Kickstart the hydrogen economy with 5GW of production by 2030

The government plans to work with industry to deploy 5GW of hydrogen production by 2030, supported by a new £240 million net zero Hydrogen Fund.

Wide rollout of electric vehicle (EV) infrastructure

The Energy White Paper sets out a plan to invest £1.3 billion to accelerate the deployment of EV charging points across homes, streets and motorways, as well as another £1 billion to support the development of EVs themselves, such as funding for battery production.

Supporting the vulnerable and fuel poor

The plan sets out how the government will help the vulnerable and fuel poor across society better cope with paying energy bills. It will support the lowest paid with a £6.7 billion package of measures it claims could save families in the oldest, most inefficient homes up to £400.

These measures include extending the Warm Home Discount Scheme to 2026 and discounting eligible households £150 on their electricity bills each winter.

Switching to cleaner boilers

Fossil fuel boilers will be gradually removed and replaced with cleaner alternatives - by the mid-2030s the government hopes that all newly installed heating systems will be low carbon models or be appliances that can be converted to a clean fuel supply.

Supporting the North Sea oil and gas transition

The government promises to safeguard the people and communities most affected by falling oil and gas production and pledges to ensure the expertise of the sector will be used to fill new green jobs in areas such as CCS and hydrogen production.

Business and Energy Secretary Alok Sharma said: "Today’s plan establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution.

"Through a major programme of investment and reform, we are determined to both decarbonise our economy in the most cost-effective way, while creating new sunrise industries and revitalising our industrial heartlands that will support new green jobs for generations to come.

"At every step of the way, we will place affordability and fairness at the heart of our reforms - unleashing a wave of competition so consumers get the best deals possible on their bills, while protecting the vulnerable and fuel poor with additional financial support.

"With this long-term plan, we are turning climate ambition into climate action - putting the UK firmly on the course to net zero to end our contribution to climate change as we build back greener."

Written by

Bruna Pinhoni

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