Ministers must seize the “golden opportunity” to switch to low cost energy

10 Jul 2018 12:28 PM

Britain has a “golden opportunity” to switch to greener ways of providing energy to homes and businesses without increasing bills – but only if Ministers act now to make the most of it.

That’s a key finding from yesterday’s National Infrastructure Assessment – the first ever for the UK – published by the National Infrastructure Commission.

Chairman Sir John Armitt said it has long been assumed that a switch to greener sources for the country’s energy needs would mean a hit on people’s pockets – but analysis for the Commission shows this would not necessarily be the case.

In fact, making this switch towards low-carbon and renewable sources for both the country’s power and heating, combined with a move towards electric vehicles, would mean the customer of 2050 would pay the same in real terms for their energy as today.

But he warned this will only be possible if the right decisions are taken now by government. These include continuing to invest in low cost renewable technologies, such as wind and solar, so that these provide at least half the country’s generating capacity by 2030, as well as ramping up efforts to improve the energy efficiency of the UK’s buildings and enabling a rapid switch to electric vehicles.

The National Infrastructure Assessment also warns that the Government will need to take steps to find low-carbon alternatives to oil and gas for heating homes and businesses.

Ten years ago, it seemed almost impossible for the UK to move towards being powered mainly by renewable energy sources such as solar and wind power in an affordable and secure way – yesterday’s Assessment calls for a focus on identifying value-for-money ways to reduce emissions from heating.

Chairman of the National Infrastructure Commission Sir John Armitt yesterday said:

“Whether for cooking, lighting, keeping homes warm or electric cars on the road, where the UK’s energy comes from will need to change radically over the coming decades if the UK is to meet its legally-binding climate change targets.

“If we act now we have a golden opportunity to make our country greener, and protect the money in the pockets of consumers long into the future – something few of us expected to be able to do.

“Ministers can seize this chance by investing in renewables and other low-carbon technologies so they become the main players in our energy system – something that was considered a pipedream as little as a decade ago. But they need to act now to realise the full potential of what can be achieved.”

A greener future

Established in 2015, the National Infrastructure Commission is an independent body tasked with providing clear advice to the Government on how best to meet the country’s long-term infrastructure needs.

A key part of its work is the UK’s first-ever National Infrastructure Assessment, spanning a range of sectors including transport, digital technology, waste, flood management, water supplies – and the energy network. It provides recommendations for delivering improvements to the country’s infrastructure network up to 2050.

Currently, around 30 per cent of the UK’s electricity comes from renewable sources like wind and solar power – up from 12 per cent only five years ago. Yesterday’s National Infrastructure Assessment recommends that the Government take steps to push this even further and ensures that a minimum of 50 per cent of electricity comes from renewables in 2030.

In the longer term, an energy system based on low cost renewables and the technologies required to balance them may prove cheaper than building further nuclear plants, as the cost of these technologies is far more likely to fall, and at a faster rate.

The National Infrastructure Assessment therefore cautions against a rush to agree government support for multiple new nuclear power stations, and proposes that after Hinkley Point C in Somerset the Government should agree support for only one more nuclear plant before 2025. This would give flexibility to move towards newer low-carbon energy sources in future, while at the same time maintaining the UK’s nuclear supply chain and skills base.

The National Infrastructure Assessment is clear that the switch to greener energy won’t happen overnight – and in the next decade, the UK may also want to continue to use sources of natural gas for power.

It also highlights the need to ensure the current pipeline of interconnectors, linking the UK to energy supply from abroad, is not affected by Britain’s leaving the European Union, and to aim for continuity with Euratom arrangements to enable the nuclear industry to continue operating after 29 March 2019.

But it finds that moving to an electricity system mainly powered by renewable energy sources could be the “safest bet” in the long term, and become the lowest cost outcome for consumers.

The National Infrastructure Assessment therefore recommends that:

established technologies like wind and solar power be allowed to compete to deliver the overwhelming majority of the extra renewable electricity needed as overall demand increases, with measures to move them to the front of the queue for Government support;
Government sets out a clear pipeline, with dates and budgets, for future auctions to support renewables;
the feasibility of hydrogen and heat pumps as a low-carbon alternatives to oil and gas for heating be established, with community-level trials for hydrogen in place by 2021, and a trial to supply at least 10,000 homes by 2023.

But the Commission also warns that the Government will also need to ramp up efforts to improve the energy efficiency of Britain’s buildings.

The Assessment published yesterday calls for £3.8 billion to be invested between now and 2030 to make improvements to the country’s social housing stock, with trials of new approaches to drive up efficiency in owner-occupied properties and a clear plan for tightening regulations to improve energy efficiency in private rented homes.

All this would be aimed at delivering a target rate by 2020 of installing 21,000 energy efficiency improvements a week, such as loft insulation, double glazing or wall insulation.

The National Infrastructure Assessment – a first for the UK

Chairman of the National Infrastructure Commission Sir John Armitt added:

“Whether it’s electric or driverless cars, new energy sources, tackling the risk of climate change or preparing for the newest and fastest broadband speeds, the issues we’ve been considering profoundly affect people’s everyday lives.

“The whole purpose of the UK’s first-ever National Infrastructure Assessment is to think beyond the technologies of today and to ensure we can make the most of future innovations. It’s why it’s not just a one-off but something we will be repeating every five years to ensure we remain on the front foot.

“This is not some unaffordable wish-list of projects: it sets a clear direction for how to meet the country’s future infrastructure needs, and makes a realistic assessment of what can and should be delivered within the stated aim of Ministers for steady and continued investment over the coming years.

“I therefore look forward to the Government’s response to our report, and seeing how our recommendations can become reality.”

Alongside measures for delivering a low cost, low-carbon energy system, the Commission’s recommendations include:

Digital technology – that the Government devise a National Broadband Plan by Spring 2019, to deliver full fibre connections across the whole of the country, including those in rural areas – this should ensure that the technology is available to 15 million homes and businesses by 2025, 25 million by 2030, and all homes and businesses by 2033
The future for the nation’s roads – that the Government work with councils and private companies to deliver a national network of charging points for electric vehicles and ensures that the impacts of connected and autonomous vehicles are taken into account when planning for the next rail control period and road investment strategy;
Encouraging growth of cities – that Metro Mayors and city leaders develop and implement long-term strategies for transport, employment and housing in their areas, to support economic growth, with new powers and devolved infrastructure budgets. The National Infrastructure Assessment’s spending plans include funding for projects including Crossrail 2 in London, and Northern Powerhouse Rail linking the major Northern cities, and recommends a boost in funding for major cities totalling £43 billion to 2040, with cities given stable five-year budgets, starting in 2021;
Tackling floods – that the Government should put in place a long-term strategy to deliver a nationwide standard of flood resilience by 2050 with funding for flood risk management increasing significantly over the coming decades
Cutting waste – that new national rules for what can and cannot be recycled be introduced, with restrictions on the hardest-to-recycle plastics, aimed at increasing rates and reducing the amount of plastics going to incinerators. This would also mean that all food waste is separated making it available to create biogas, so it can be used to heat people’s homes and potentially as a transport fuel

The National Infrastructure Commission’s role is to make independent recommendations to Government on long-term infrastructure priorities, covering transport, energy, digital, water, waste and flood defences. It is charged with delivering a National Infrastructure Assessment once every five years. The first of these, and the first in the UK, was published yesterday.

The Commission published its recommendations on water supplies in Preparing for a Drier Future: England’s water infrastructure needs in April. This was published in advance so that water companies and regulators can take account of it in their plans currently being finalised. It set out the need for a twin-track approach both of additional infrastructure and encouraging a significant reduction in demand.

The different chapters of the Assessment and accompanying infographics can be accessed here.

The Charter for the National Infrastructure Commission requires the Government to respond to its recommendations no more than a year after publication, and wherever possible within six months.