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Low carbon infrastructure at no extra cost

NIC has published an annual review showcasing a highly renewable generation mix is a low-cost option for the energy system, but a requirement of transformation in...

The National Infrastructure Commission is required to carry out an overall assessment of the UK’s infrastructure requirements once every 5 years. This is the first of those assessments.

The first National Infrastructure Assessment sets out the Commission’s plan of action for the country’s infrastructure over the next 10-30 years. Infrastructure can inspire confidence and growth.

By 2050, the UK’s population and economy will have grown significantly. This will place substantial pressures on infrastructure. And meeting the challenge of climate change will require a transformation in energy, waste and transport by 2050. The UK is legally bound to reduce its greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050. Today, around 70 per cent of emissions come from electricity, buildings, travel and waste.

The Commission recommends:

  • At least 50% renewable electricity generation by 2030
  • No more than 1 more contract for new nuclear before 2020
  • Pilots to test hydrogen and heat pumps as low carbon heating options
  • Buildings which require less energy to heat

The Commission’s modelling has shown that a highly renewable generation mix is a low-cost option for the energy system. Government should not agree support for more than one nuclear power station beyond Hinkley Point C before 2025. The National Audit Office found that this procurement model for Hinkley Point C did not provide best value for money for consumers. The Commission is recommending a ‘one by one’ approach to new nuclear plants, as opposed to the current government policy to develop a large fleet.

The analysis carried out shows slightly lower average costs for a scenario with 90 per cent renewable and less than 10 per cent nuclear compared to a scenario with 40 per cent renewable and around 40 per cent nuclear, the higher cost of managing the variable nature of many renewables (‘balancing’) is offset by the lower capital cost, which translates into lower costs in the wholesale market. Regardless if heat is predominantly electrified using heat pumps or provided through low carbon hydrogen in the future.  

In all scenarios, extra flexibility, which includes technologies such as storage, interconnection and demand side response, is a low regrets investment which reduces estimated total energy system costs by between £1-7 billion per year on average between 2030 and 2050.The Commission favours the use of existing market mechanisms – contracts for difference and the capacity market – where possible, to avoid creating more uncertainty, but incremental improvements could be made. All renewables should be able to compete; there is no longer a case for any bilateral deals, including for tidal.

But even with emissions almost eliminated from power generation and waste, the UK cannot achieve its emissions targets without transitioning away from using natural gas, a fossil fuel, for heating.

Biogas can also be used as a low carbon substitute for natural gas. It can also be converted to a range of biofuels, which may prove especially valuable in sectors where fossil fuels are hardest to replace, such as aviation. The Commission recommends that government should establish separate food waste collection for households and businesses (to enable production of biogas) by 2025.

It is cheaper to collect food waste separately and process it in anaerobic digesters, rather than send it to energy from waste plants (incinerators). Seventy-nine per cent of people who do not currently use a food waste bin would be prepared to use one if it were provided by their local council. More plastics should be recycled, including by restricting the use of hard-to-recycle plastic packaging by 2025. Better packaging design, clearer labelling, fewer hard to recycle plastics, and tougher recycling targets.

The Commission recommends that government should set a target for recycling 65 per cent of municipal waste and 75 per cent of plastic packaging by 2030. Government should set individual targets for all local authorities and provide financial support for transitional costs.

techUK supports the findings of the NIC and agrees that the road to low carbon economy looks brighter now than ever. We welcome NIC’s call for Government to be less afraid to be more ambitious in their approach to policy.


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