Sally-Ann Hart: Nature-based solutions must be central to our efforts to adapt to climate change

1 Apr

Sally-Ann Hart is the MP for Hastings and Rye, and was a councillor in Rother.

The narrative around climate change has largely been focused on cutting carbon emissions and to some extent, sequestering carbon. However, the reality of climate change is that every country, including the UK, will need to adapt to the impacts of climate change.

Climate change has triggered more extreme weather conditions causing primarily heatwaves, droughts, high precipitation and flooding. Adapting to the impacts around the globe is a daunting prospect, but adaptation will undoubtedly keep the human population safer.

Throughout history, humans have adapted to the effects of climate change, including by migration – perhaps a reason why we have been around for so long.

Taking steps now to adapt to future change will make us more resilient and less vulnerable to its impacts. Adaptation can include traditional engineering projects such as seawalls or other coastal defences as sea levels rise; but the natural environment (wetlands, trees, vegetation and green roofs, for example) also has a significant role to play.

Adaptation covers everything from water storage to drought-resistant crops, from green urban areas to protecting and restoring natural indigenous ecosystems. Following the Covid-19 pandemic, adaptation has increasingly been framed in a wider context of strengthening resilience, which covers the ability to respond to a range of threats.

The Climate Change Committee (CCC) reports on progress in adapting to climate change in England, with many of its previous recommendations for improving adaptation planning and implementation in England being taken up by the Government and its arms’ length bodies, accepting CCC’s central message that it must take greater action to build resilience to the impacts of climate change.

However, in its latest risk assessment, the CCC stated that “adaptation remains the Cinderella of climate change, still sitting in rags by the stove: under-resourced, underfunded and often ignored.” It has advised the Government to urgently plan for adaptation to a 2°C world, and plan for 4°C.

The UK’s National Adaptation Plan sets out potential actions to address climate change risks. Investment in flood defence and improving resilience to flooding is substantial, with the Government spending nearly £900m on flood and coastal erosion risk management in England in 2019/20.

A long-term approach to flooding is essential; spending on prevention is better than the reactive spending required to mop up the mess.

The recently released IPCC report, Climate Change 2022: Impacts, Adaptation and Vulnerability, acknowledged that climate change has already caused widespread adverse impacts and related losses and damages to nature and people – and to a greater extent than estimated in previous assessments.

Climate change is and will increasingly cause extensive and sometimes irreversible damage to ecosystems, and this degradation of ecosystems increases the vulnerability of people. The rise in weather and climate extremes has led to some irreversible impacts as natural and human systems are pushed beyond their ability to adapt.

Nature-based solutions offer cost-effective adaptation to climate change whilst also providing benefits to people and wildlife. Safeguarding biodiversity is fundamental for climate-resilient societal development. Conservation, protection and restoration of land, freshwater, coastal and ocean ecosystems, together with targeted management to adapt to unavoidable impacts of climate change, reduces the vulnerability of biodiversity to climate change.

Sustainable food production using agroecological principles and practices, ecosystem-based management in fisheries and aquaculture, and other approaches that work with natural processes support food security, nutrition, health and well-being, livelihoods and biodiversity. These practices also help to sequester and capture carbon.

I was interested to read Nature-Based Solutions in UK Climate Adaptation Policy, written by Oxford University’s Nature-based Solutions (NbS) Initiative and commissioned by the RSPB and the WWF-UK.

The report highlights the opportunities and policy support needed to implement NbS across the UK in ways that deliver for nature, climate and people. It also outlines how NbS offers opportunities to mitigate the eight key risks identified by the CCC in the UK, while supporting the provision of public and private goods.

NbS contribute to reducing our vulnerability to the impacts of climate change. Using green roofs to reduce stormwater runoff in urban areas, for example, reduces the exposure of people and assets to climate hazards.

By diversifying livelihoods and enhancing the resilience of timber and food production to pests, pathogens and less water availability, we can reduce our sensitivity to climate shocks and through governance reform, empowerment, and improving access to natural resources we can enhance the adaptive capacity of individuals and communities.

NbS have huge potential and should be integrated in the forthcoming National Adaptation Plans. NbS are no longer peripheral, and Defra has already started to develop policies that should be rolled out across all sectors. NbS can be measured and monitored for their effectiveness by using defined metrics, indicators and targets and standards can be set for high-quality NbS, benefiting nature, our environment and people.

Increased funding is required. But it does not have to be the sole responsibility of government; three per cent of private financing mobilised under the 2018 Paris Agreement went into adaptation, with more than 95 per cent going towards mitigation. Adaptation will increase resilience, benefiting businesses and financial institutions, as well as nature and people.

Emma Howard-Boyd, Chair of the Environment Agency, has recently highlighted the need to ensure that the race to net zero runs hand in hand with the race to resilience with ‘resilience [being] the missing link in investment in net-zero and nature’.

We have a window of opportunity to take action to adapt to climate change and avoid the worst impacts and political commitment and follow-through across all levels of government to accelerate the implementation of adaptation actions is vital. I believe that will is there.

Sarah Ingham: No, Prime Minister, Britain does not need to atone for so-called ecocide

7 Jan

Sarah Ingham is author of The Military Covenant: its impact on civil-military relations in Britain.

“We were the first to knit the deadly tea cosy of CO2 that is now driving climate change.”

The Prime Minister’s speech at the 2021 Global Investment Summit at the Science Museum back in October was initially a zinging endorsement of the free-market capitalism which had delivered the Covid vaccine.

Conservative cheers could well have turned to bafflement when the PM warned that Britain must atone for being a world-leading scientific and engineering pioneer more than two centuries ago. As the first nation to industrialise, sending up plumes of smoke from the Midlands, “We have a responsibility to set an example – and we are.”

Two weeks later at COP26, that gathering of private jets on Clydeside, Boris Johnson was at it again. The Industrial Revolution, one of the most seminal shifts in human history, was painted as a historic eco-crime for which Britain must make reparation. It is “one minute to midnight on that doomsday clock” of climate change. That clock had begun to tick 250 years ago in Glasgow where “James Watt came up with a machine that was powered by steam that was produced by burning coal”. Consequently, nations like Britain have a “duty” and “special responsibility” to divvy up $100 billion a year to support developing countries finance green alternatives.

The Prime Minister is not alone trying to establish a narrative that the apparent threat of looming ecocide demands that today’s Britain must pay for yesterday’s wrongs. In February 2020 Michael Gove told the Green Alliance that, as the first country in the world to industrialise, the UK must acknowledge “our debt to the planet and our debt to others”. As the earliest adopter we now have a “moral responsibility” to lead a green revolution – and to make Britain’s voters pay through the nose.

The agenda-setting Committee for Climate Change (CCC) might well have encouraged the Government into following this line of argument. Back in May 2019, it stated Britain should “bear more of the costs of transition to a low-carbon economy”, not least as the birthplace of the Industrial Revolution. Apparently, in the past we have made a “large” per person contribution to man-made global warming. (p.106 of Net Zero: The UK’s Contribution to Stopping Global Warming, should interest be, er, ignited).

How large is large? It seems that since the start of the 19th century, a whopping two to three per cent of global warming attributable to greenhouse gas emissions has come from the UK, according to the CCC, whose members don’t seem too troubled by that other large 97-98 per cent coming from elsewhere. This of course raises the question of whether, over the past 200 years, we in Britain have indeed knitted a deadly tea cosy, or even crocheted a lethal egg-warmer.

Preoccupied in the last decade or so by the impact of a global financial crash, Brexit, a pandemic and matters woke, we have all been in a comparative slumber as the new green orthodoxy embedded itself in public policy, spurred on by the 2008 Climate Change Act. Hands up if you were paying much attention in June 2019 – during the Conservative leadership contest – when the Act was amended by Statutory Instrument, ushering in the target of Carbon Net Zero by 2050.

Created by the 2008 Act, the CCC wields the sort of influence enjoyed by SAGE, whose previously off-the-radar members have been gracing the airwaves seemingly non-stop for the past two years. Like SAGE, the CCC includes a behavioural scientist. (Why?) Unlike SAGE’s pandemic priesthood, an economist sits on the CCC. This is just as well, because like a drowsy giant, the public is beginning to awaken to the impact of green taxes and Net Zero on their pockets.

Rainforests of paper can be sacrificed by government agencies and quangos in an effort to push their pet policies, but nothing cuts through like hitting taxpayers where it hurts. In November, The Financial Times reported that getting to Net Zero by 2050 will cost £1.4 trillion – or the equivalent of £1,700 per average household per year.

Green taxes are now on the media agenda, with reports this week that they might account for a quarter of the cost of rocketing fuel bills. Poll tax, anyone? One MP has recognised the thin political ice. On Wednesday, the Education Committee chairman Robert Halfon called for the suspension of green levies.

Just as SAGE seems to lack any lockdown-sceptical scientist, it must be wondered whether the CCC has ever included a member who might not sign up to its doomsday world view. Perhaps Lord Deben’s successor as Committee Chairman could be self-styled sceptical environmentalist, Bjorn Lomborg. He argues that trillions of dollars set to be allocated to the impact of climate change could be better spent. Think of it as levelling up, just on a global scale.

The rural poverty in the developing world today was last seen in Britain in the pre-industrial era. If late 18th and early 19th century life in Britain was indeed an Eden of artisan produce, hipster beards and charming cottage industry, why did so many flee to the new manufacturing towns?

The Industrial Revolution was precisely that, a revolution. A seismic, shattering upheaval. It wrought enormous change, enriching the country and its people. It was a force for global good and thank goodness for it. Life for one day today without electricity, piped water and a mobile phone is a glimpse of yesterday’s Hobbesian nightmare.

The United Kingdom is currently responsible for generating about one per cent of global greenhouse gases. However, that is too large according to our Net Zero-fixated government, which is deploying the past to justify present and future public policy.

By invoking a two centuries-old deadly tea cosy the Prime Minister unwittingly raised questions about collective moral responsibility, usually best left to theologians and lawyers. How far should any of us be punished for historic actions of others? What about considerations of intent and agency? Didn’t the prophet Ezekiel have something to say about children not being punished for the sins of their parents?

The Industrial Revolution-reparation narrative just won’t (green)wash: as an attempt to explain away ripping out 30 million gas boilers and justifying a surge in fuel poverty, it’s a tea cosy short of some stitches.

Like SAGE, the CCC needs far greater scrutiny over the quality of its advice to government. And Conservative ministers and MPs should be mindful that, like civil servants, quangocrats are never voted out.

Build Back Nothing

9 Nov

In news that will surprise absolutely no one, the Government appears to have backtracked further on its planning reforms. Yesterday, Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, said that he would be looking at how “housing need” is calculated, and suggested that some of the assumptions behind the numbers “are probably out of date.”

This has been taken as yet another sign of the Conservatives trying to distance themselves from their original plans for building homes. Only last month Boris Johnson tried to reassure voters at the Conservative Party Conference that “beautiful” ones should only be built “on brownfield sites in places where homes make sense”, in a pledge that will in no way help England meet its housing targets. It was a far cry from a Prime Minister who promised, in his first speech outside Downing Street, that the Tories would give “millions of young people the chance to own their own homes”.

As many know, the Tories are spooked by the Chesham & Amersham by-election result, where Liberal Democrats played on fears about planning reforms in order to win votes. The outcome has been seen as evidence that Conservatives have gone too far in upsetting the Blue Wall, hence they are now trying to make all the right noises about “beautiful” homes and protecting land around the UK. In addition to that, the party will struggle to get any decent reforms past its backbenchers, many of whom appear more upset about the green belt than millions of people needing homes.

Speaking of housing need, Gove warned that “We want to be in a position where people accept and welcome new development.” But the idea that homeowners at large (and backbenchers) will accept, let alone welcome, new developments, to the degree that the country needs them, is something of a pipe dream.

It goes without saying that there’s no easy answer to fixing the crisis – indeed, many articles on this site are devoted to the subject – albeit it is mainly an issue of supply. Yet, as a millennial watching on, the Government’s strategy at the moment seems to be hoping the problem will magically go away, buying time by debating the intricacies of reforms. In the meantime, it has thrown renters a bone by way of a 95 per cent mortgage scheme, an idea that will merely increase demand for homes.

To make any headway, the Government should apply the same energy it has towards achieving Net Zero on Getting Housing Done. It’s interesting that in going green, it has no qualms about upsetting the electorate – from talk of people having to replace their gas boilers, to the Climate Change Committee’s recommendations that the public give up meat. “This is an emergency”, it will say around its eco policies. Yet housing is not so far away – and also affecting many young people’s futures.

Though the Government is concerned about Chesham & Amersham – and the rest of the Blue Wall – its current approach risks another type of electoral disaster, as has been pointed out on several occasions, as those in their 30s and 40s remain infantilised by economic conditions. But Getting Housing Done is not merely a matter of political advances; it’s about a moral duty towards generations, whose hopes and dreams are being sacrificed to keep home-owning England happy. For renters, the Conservative vision cannot continue to be Build Back Nothing.

How likely is a referendum on Net Zero?

29 Oct

Over the last few days, a rather interesting poll by YouGov has been released. It showed that the British public are in favour of a referendum on the Government’s Net Zero proposals by the next general election. Forty two per cent, in total, want a vote on the plan, 30 per cent don’t want one and 28 per cent did not declare any preference. However, when “don’t knows” were excluded from the data, 58 per cent wanted a vote on the matter.

This poll will not please the Government. In the past it could reassure itself that, as Net Zero was included in the Conservative Party manifesto of 2019, it had a clear mandate to move forward with its eco plans. But the data may be the clearest sign yet of growing public discontent. Though Net Zero was, indeed, spelled out in the document, perhaps it seemed like a minor detail among Getting Brexit Done and Levelling up. 

Now, of course, no one can miss it. As time has moved on, the headlines around it have been some of the most dramatic, even in the Covid era. From the talk about having to give up meat, to the suggestion of gas boilers being ripped out of houses around Britain, to the fact that Net Zero is estimated to cost £1 trillion over the next three decades, there’s no getting away from the eco revolution.

Many are already living under very noticeable green policies. In my local area, for instance, the Labour-run council has installed Low Traffic Neighbourhoods (LTNs), and Ultra Low Emission Zones (ULEZs) have been expanded all across London. When I recently interviewed local tradesmen about these two things, they were unbelievably frustrated. I have no doubt that they care about the environment, but they are losing jobs due to the amount of time it takes to get through LTNs and have spent thousands upgrading their vehicles. No one listens to any of their concerns.

How would they vote, I wonder, were there a referendum on Net Zero? But what would one even look like? It’s worth pointing out that the YouGov poll asked whether people would want a referendum on Net Zero proposals, rather than Net Zero itself, but this could contain a huge number of questions. Case in point: the Climate Change Committee (CCC), the Government’s independent advisory group on reaching Net Zero, has offered over 200 recommendations about how the UK can get there. Where do you start with that list? 

Perhaps eco policies could be grouped into specific areas – from “the home” to “vehicle use”. Or maybe, as time goes on, the public will be asked to make trade offs, such as “Would you rather be a vegan or stop flying for X amount of time?” I half-joke, but it strikes me this is not so far away from the truth. Either way, you can see the complexity of bringing Net Zero to the ballot box.

One thing is for certain, which is that the Government would never put one question to the public – namely “Should the UK achieve Net Zero by 2050?” – as the UK is already legally binded towards the 2050 target through the Climate Change Act, as amended in 2019. The genie is out of the bottle and we have already done so much to become eco friendly. Do not expect to see campaigners in “Vote Net Zero” t-shirts any time soon.

Even if we weren’t legally obliged, though, it’s unlikely the Government would risk public consultation on the matter. The implications of getting the “wrong” answer would be staggering, and it cannot bank on getting the “right” one. It was interesting to note that earlier this year, Swiss voters rejected a proposed new climate law by 52 per cent – compared to 48 per cent – in a referendum. It was a warning to eco-conscious leaders on how the vote could go.

Ultimately, as was the case with the Coronavirus Act, the Government has simply decided that there’s an emergency and that this justifies it pushing through its Net Zero agenda. And so, dreaming of any vote in this becomes a futile exercise.

That doesn’t mean, however, that the Government shouldn’t think hard about how to get more public involvement on its decisions. Without doing so, it seems to me that negative attention will turn to the CCC, which risks attracting the same resentment that was once directed at the EU – due to its unelected representatives and impact on policy. Voters can end up feeling “left behind”, too, as was the case in the referendum.

In general, the Government needs to check in with the public more. It has, perhaps, become overly accustomed to not having to do this during the pandemic. But beneath the slogan of “Build Back Better”, I wonder if it can hear the anger among those struggling with ULEZs and similar policies? It must connect with these voters – before it finds the next general election a de facto referendum on Net Zero.

Emily Carver: The UK’s efforts against climate change will mean nothing without the world’s biggest polluters onboard

27 Oct

Emily Carver is Media Manager at the Institute of Economic Affairs.

The pinnacle of every environmentalist’s calendar is upon us! With only four days to go until COP26, ministers are falling over themselves to talk up the conference.

Their adoption of the language of crisis is stark: Alok Sharma has said that “If we don’t act now, the end destination is climate catastrophe”; the Prime Minister has warned that we must act “before it is too late”; while Downing Street has even hosted a ‘Kids Climate Press Conference’ to help win the “fight against climate change”.

Outside of government, the refrain that we’re not going far enough continues. Activist Greta Thunberg is rallying the troops to join the climate strike in Glasgow. National treasure David Attenborough has delivered his annual warning to save the planet from extinction. And then there’s the interventions from our favourite luvvies, like Ab Fab’s Joanna Lumley, who has suggested with all seriousness that we “go back to some kind of system of rationing”.

The problem with all this, of course, is reality. A month ago, Johnson hailed COP26 as a “turning point for humanity”. Now, the chances of COP26 success are “touch and go”, as he told children that he’s “very worried” the conference may not secure the agreements needed to avert climate change.

The harsh truth is that our entire net zero strategy relies on other countries following suit. Acting alone, or even with similar-minded nations, will make little to no dent in global emissions. This is not controversial. Indeed, it was acknowledged at the time of the formation of the Climate Change Committee, the independent body that is responsible for advising government on climate policy, that the success of the UK’s decarbonisation strategy depends on high-emitting countries adopting similar carbon targets to our own – otherwise, our efforts to prevent climate change would prove utterly futile.

It’s true that more and more people are demanding for something to be done to avert the rise in global temperatures. A new poll undertaken by the UN Development Programme and the University of Oxford, found that 65 per cent of the nearly 700,000 adults surveyed across G20 countries believe climate change is a ‘global emergency’. Whether this translates to advocacy for specific or costly policies that hit people in the pocket is, of course, harder to gage.

But, while the public calls on the UK government to do more, global carbon emissions are only on their way up. According to the World Meteorological Organization, even though the pandemic saw a 5.6 per cent overall decline in emissions of carbon, the build-up of warming gases in the atmosphere rose to record levels; it is predicted that this will drive up temperatures in excess of the goals of the Paris Agreement of two per cent. The UN has also issued a warning that greenhouse gas emissions are on course to be 16 per cent higher by 2030 than they are now.

Many high-emitting nations are either avoiding COP altogether or stalling when it comes to committing to carbon targets. China has said that fossil fuels will form less than 20 per cent of its energy mix by 2060, and that it will peak coal emissions by 2025. Hard to believe, considering it continues to invest in new coal mines and, last year, built more than three times as much new coal power as the rest of the world combined.

Crucially, it has also made clear that climate policy will not come at the expense of its other priorities, including energy security and other economic interests. Then, there’s Putin, who has now committed to reaching net zero by 2060, but will not show his face at the climate summit. And at the same time, leaked documents show that countries including Saudi Arabia, Japan, Australia, and India are reportedly lobbying the UN against moving away from fossil fuels.

This is not to say that the UK and others should give up on going green. The possibilities of green technology are hugely exciting, and the benefits to our economy of pioneering new eco-friendly innovations are very real. However, it would be deluded to believe that the likes of China and India will come to the world’s rescue and slash their carbon emissions in line with our own – at least not anytime soon.

As a new paper from the Institute of Economic Affairs lays bare, the UK’s Climate Change Committee has failed to address the reality that it is highly unlikely that the UK’s leadership and influence will be enough to bring about the reductions in global emissions, and limit temperature rises, to the levels considered necessary to avert damaging climate change.

Therefore, if the world is indeed heading towards climate catastrophe, the UK desperately needs a rethink. First, we should ask why is the CCC and government prioritising mitigating climate change over climate adaptation? Why are we putting our energy security at risk, by subsidising green technologies that may or may not stand the test of time? And, crucially, why is the CCC and government not asking if the costs borne by British taxpayers, consumers and businesses have yielded proportionate benefits?

Over the next two weeks, we’ll see world leaders flexing their muscles, extolling the importance of cutting emissions to avert climate change. However, as it becomes ever more obvious that a global consensus is a pipedream, it’s clear we urgently need a review of our climate policy priorities – and an injection of realism.

Will Gardiner: The promise of Drax – a lower cost, Net Zero future to help level up the Humber

14 Oct

Will Gardiner is the CEO of Drax. This is a sponsored post by Drax.

The stark warnings delivered by the world’s leading climate scientists this summer made it clear that we are “on code red” – not enough is being done to prevent a climate catastrophe. The science is clear; it’s no longer enough to reduce emissions, we need to start removing carbon dioxide (CO2) already in the atmosphere to avoid the worst effects of climate change.

The world’s leading climate scientists at both the UK Climate Change Committee (CCC) and the UN IPCC recognise that carbon capture and storage technologies – which permanently remove CO2 from the atmosphere – are vital to global efforts to combat the climate crisis.

One such proven technology is being developed in the heart of North Yorkshire. At Drax Power Station near Selby, alongside our partners, we have pioneered and developed bioenergy with carbon capture and storage – known as BECCS. After years of testing and millions of pounds in research and development, we are now applying for planning permission to develop this technology at industrial scale by 2027.

This climate-saving technology will capture at least eight million tonnes of carbon dioxide every year, creating the world’s largest single site carbon capture project. Independent analysis shows that deploying BECCS technology could reduce the costs of getting to Net Zero by as much as £75 billion, saving £85 every year for every UK household, as well as significantly reducing the UK’s emissions and helping ensure we reach Net Zero in a fair and affordable way.

The project is uniquely placed to help level up the North and put Yorkshire and the Humber on the world stage. By converting from coal to sustainable biomass, we have already protected local jobs for thousands of workers, and helped keep the lights on across the UK. Now, we want to go further.

Delivering BECCS at Drax will protect and create over 10,000 green jobs across the region through our UK supply chain. It will generate hundreds of new apprenticeship opportunities, drive investment in green skills, and equip local communities to fulfil the careers of the future.

Drax is an anchor project for the Humber’s green ambitions. Alongside our partners in Zero Carbon Humber and the East Coast Cluster, we can help protect 55,000 industrial jobs across the region, enabling harder to abate sectors offset their emissions, making the region a centre for international investment in climate-saving technologies.

We want businesses of all sizes to capitalise on the benefits of BECCS. During the project’s construction phase, Drax will spend hundreds of millions across our supply chain – with an ambition that 80 per cent of construction materials and services will go to UK companies. This will generate transformational opportunities for local and UK businesses, from large multi-nationals to the smallest SME.

To realise this ambition, Drax will host a series of events throughout 2022 in partnership with the West & North Yorkshire and Hull & Humber Chambers of Commerce, as well as further events across the North, Midlands and South of England. These will help build our supply chain and ensure the project can be accelerated as soon as planning approval is received.

As well as construction, BECCS presents a unique opportunity to support UK agriculture and create opportunities for British farmers. Our partnership with the NFU will develop a roadmap for boosting the UK’s energy crops market. This could deliver some of the sustainable biomass for our BECCS units, as well as boosting the domestic energy crop market to help the UK achieve its climate goals.

BECCS at Drax will generate benefits and opportunities nationwide; but the global prize should not be underestimated either. By delivering the first commercial scale BECCS project, the UK will be in prime position to export this technology internationally – creating significant trading opportunities, jobs and growth. Other countries including the US and Norway are moving at pace, so the UK’s competitive advantage is not guaranteed. The UK must act now to lead the global race to deliver this climate-saving technology.

Drax is driving this project forward; we are signing landmark agreements with our partners, advancing through the planning process, and preparing our supply chain so the project is ready to go. We have experience of delivering new technologies at scale; we have already transformed the UK’s biggest coal-fired power station into the largest decarbonisation project in Europe by using sustainably sourced biomass. Our track record speaks for itself.

But like wind, solar and bioenergy before, every new technology needs help to get it off the ground. We are calling on Government to back BECCS at Drax and urgently bring forward a negative emissions policy and investment framework that will enable us to begin construction in 2024, remove millions of tonnes of carbon from 2027, and tackle climate change while protecting and creating new green jobs. Scaling up BECCS at Drax will help deliver Net Zero, level up the North, and make the UK a world leader in solving the climate emergency.

Clive Moffatt: The Net Zero target may not be possible, and gas should bridge the generation gap

29 Sep

Clive Moffatt has over 30 years of experience as an energy market analyst. He founded and chaired the UK Gas Security Group (UKGSG) from 2017-19.

As the start of the energy decarbonisation programme in 2013, various participants in the gas to power chain warned the Government that the UK was especially vulnerable to supply and price fluctuations in the global gas market – because of our growing dependency on imported gas for heat and power.

In the harsh winter (2018) and now, these predictions have proven correct.

This problem will not go away and consumers, industry and infrastructure investors need to be reassured by government that the need to underpin energy security and affordability will not be ignored in the pursuit of Net Zero.

The following announcements from No 10 would go some way towards restoring consumer and market confidence:

Commit to energy security and affordabilty

Neither Parliament nor the electorate voted for Net Zero and the Government needs send a clear message that for very good reasons – such as technological constraints, security of supply, industrial competitiveness and affordability – reaching the Net Zero target by 2050 may not be possible.

There is very little credibility to be gained at COP26 by the Prime Minister seeking to lead the world on reducing emissions when his own energy policy is in a shambles.

Abolish retail energy price caps

There is no economic sense in capping retail energy prices when you have no influence over wholesale market prices. All that happens is that weaker suppliers go bust and Ofgem ends up having to raise the cap.

Caps may benefit larger better resourced suppliers by making it quicker and easier for them to grow market share but there is a little benefit to the consumer. Better to let the market work and instruct Ofgem to tighten the financial tests it uses to judge the credibility of existing and potential suppliers.

Encourage investment in UK gas storage.

The UK will be almost totally dependent on imported gas from 2025 and with storage capacity at less than two per cent of annual gas demand, policies are urgently required to encourage new investment.

This could be achieved via an obligation on suppliers and shippers to keep a proportion of their annual gas demand in annual storage or via a capacity market auction to award capacity payments to winning bids to underpin new investment in seasonal and flexible storage capacity.

This should include an allowance for the planned growth in hydrogen production to fuel heat and transport and the need for related hydrogen gas storage.

This new investment will mitigate wholesale gas and electricity price volatility and help pave the way for a more secure and affordable transition to Net Zero.

In addition, more needs to be done to increase short-term liquidity in the gas market via a system of Demand Side Reduction (DSR) (as with electricity) which rewards industrial users (on an auction least – cost basis) for voluntarily curtailing their demand at times of system stress.

Use gas to bridge the generation gap

With the demise of coal and retirement of existing nuclear capacity the UK is very short of both regular baseload and reliable flexible power generation to compensate for the planned expansion in intermittent renewable energy.

Natural gas is the only cost effective and reliable solution.

In the medium term some 10GW of new baseload generation is required and this should be provided by unabated gas via a new capacity market auction.

Carbon capture and storage (CCS) to remove the CO2 is still an expensive prototype – requiring more gas, raising electricity costs – and so initially all new large- scale gas plant should be CCS compatible but not compulsory – additional capex and opex incentives and preferential despatch could be available later when CCS proven.

In addition, a separate auction should be run to procure smaller scale (eg 300mw units) via a separate auction for flexible generation with unabated small -scale gas being allowed to compete with batteries and Demand-Side Reduction (DSR) on the basis of strict criteria relating to network locality, reliability and costs with penalties for non-delivery.

Establish an Independent Energy Authority

Finally, more consistency and long-term coherence are needed in how energy policy is designed and implemented. The current fragmentation and politicisation of energy would be removed with the creation of an independent Strategic Energy Authority (SEA), with an independent chair and expert management board.

This would reduce the policy burden on BEIS, remove the need for the Climate Change Committee, allow Ofgem to focus exclusively on retail market competition and remove potential conflicts within National Grid as grid investor/owner and system operator.

Such an authority could:

  • set long term investment targets for generation transmission and distribution based on the need to balance emissions reduction against security and affordability;
  • create a consistent and cost-effective policy framework (eg long-term gradual price trajectory for carbon and capacity auctions) to ensure fair competition between different forms of energy supply;
  • oversee the system operation of the electricity and gas market and facilitate greater liquidity in the short term balancing markets eg gas storage and DSR in gas; and
  • liaise directly with Treasury to define and publish long- term budgets for taxes and levies impacting on consumers and industry.

In the words of our Prime Minister, this would be a “grown-up” rational approach to energy. His key message from now on should be that the pursuit of Net Zero is not incompatible with the urgent need to deliver to consumers and industry secure supplies of affordable energy.