Today, the UK Government has finally released its plans on how the country will achieve its UK Net Zero targets by 2050. This announcement comes just one week after the Public Accounts Committee met to discuss the National Audit Office’s report on Government progress on decarbonising the power sector by 2035 (our blog on the NAO’s report can be found here). The report showed that this decarbonisation programme is an essential part of achieving the Net Zero target, making today’s announcement crucial.
During the Public Accounts Committee meeting, representatives from the Department for Energy Security and Net Zero were quizzed about their progress in achieving the country’s Net Zero targets. The Committee used the National Audit Office’s report as a guide to question the Representatives from DESNZ, who were questioned about progress in various areas – including Carbon Capture and Storage, hydrogen, Great British Nuclear and energy efficiency (the full transcript can be found here).
Although the session was brief, two areas of questioning particularly caught my attention.
Planning
During the Committee meeting, questions were raised about the possibility of changing planning laws in order to decarbonise the power sector by 2035. Specifically, the committee discussed the need to modernise the national grid which is widely recognised as a key aspect of the energy ecosystem that requires urgent attention. Many would say, I think correctly, that without upgrading the grid the UK cannot meet its Net Zero targets.
Jeremy Pocklington, Permanent Secretary at DESNZ, spoke about “Planning obviously affects different technologies, but I think the issue that we are probably most focused on is how planning affects the development of the right transmission network that we need.”
He went on to say, “We understand the sensitivity around it, but ultimately we are all going to have to work together to identify the right ways to build the infrastructure that we need.”
I hear an increasing conversation in the renewables sector that we need a more interventionist Government if we are to develop low and zero-carbon energy facilities at the rate required to meet the 2050 Net Zero target. Recent events, such as Michael Gove’s approval this week of a PV farm in Shropshire – which is the size of 75 football pitches and adjacent to an Area of Outstanding Natural Beauty – suggest that we may see more government intervention of this type in the future. In doing so Mr Grove had to override strong and very understandable local objections to the scheme.
I think we should expect to see an increasingly interventionist Government over the period to 2050, and it will be interesting to see what measures are announced in the coming weeks.
A Plan
The NAO report highlighted the absence of a plan to achieve decarbonisation of the power sector by 2035.
The Committee posed the following question:
“In October 2021, the Government published its net zero strategies, saying it wanted to decarbonise the power sector by 2035, which is obviously a very ambitious target that is only 11 and a half years away. But we do not yet have a plan for how it is going to be achieved. Why is it taking so long?”
The question provoked some discussion, a very important aspect of which was its impact on the key area of investor confidence. Although accepting the case for a clearer “over-arching” plan there was no commitment to making one. The following comment by Jeremy Pocklington best summarises the Government’s position,
“There is not a single pathway—not a single way—to decarbonise the power sector. There is not a single blueprint that we need to build out of exactly which power station should be where. We need to have a plan and to attract the private investment that we need to achieve net zero. We need to allow markets to determine the right outcome, create confidence for investors and also remain open to innovation. That is the challenge that we have if we are going to achieve this at the least cost to consumers.”
He later continued, “We need to maintain a degree of optionality so that we can provide that balance of certainty and confidence to investors—that is our plan—but we can change and adapt and evolve our course as we learn new information and as new technologies emerge.”
There was no commitment to producing an overarching plan. Having worked in the renewables sector for 12 years, I have witnessed how changes in government policy can quickly erode investor confidence, resulting in investment proposals being pulled overnight.
I am hopeful that the policies and information being released this week and next will be sufficient to maintain investor confidence despite the lack of a formal plan.
Edward de la Billiere
Edward de la Billiere is a solicitor and co-founder of Prospect Law. He trained at the leading Middle East firm Trowers and Hamlins, working in both their London and Dubai offices, predominantly in the oil sector. On qualification, Edward moved to Magnox Electric as a commercial solicitor, which was taken over by the nuclear operator BNFL.
Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.
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