The countdown for the UK to unveil its energy plan for net zero will culminate in a “Green Day” of announcements on Thursday, with a dual purpose of meeting the country's climate change goals and unleashing new investment.
The starting pistol was fired in July when the High Court ordered the UK government to update its net-zero strategy within nine months, following a case bought by the environmentalist group Friends of the Earth.
The Department for Energy Security and Net-Zero said Energy Security Secretary Grant Shapps would “set out his plan to power more of Britain from Britain, building on our success as a world leader on renewables and clean growth — whether that’s having the world’s four largest wind farms off our shores or installing enough solar to power over four million homes — to attract ever-greater private investment, and deliver green jobs around the country”.
Emma Pinchbeck, chief executive of Energy UK, feels the sector requires stability and certainty for investment and the government now needs to be more about action than words.
“It needs to make sure that we move on from where we’re setting long-term targets to one where we’re implementing the policies that will get us to those targets in the next five to 10 years and that is what the court case was about and it’s what we expect to see [on Thursday],” she said.
“We need about £50 billion ($61 billion) worth of private investment a year. We can't do that without certainty and we're currently only investing about £10 billion into the sector, so there's a huge opportunity gap to be met on the money."
Green Day will also be an opportunity for the government to respond to Conservative MP and former minister Chris Skidmore’s Mission Zero report, which had 129 recommendations on how the road to net zero could also be the UK's path to economic growth.
While his report concluded that Britain had made significant leaps forward in green technology and net-zero industries, particularly wind generation, it was now in severe danger of falling behind, especially given the US’s Inflation Reduction Act, which sets aside $369 billion for spending on climate adaptation and cutting emissions.
Ana Musat, executive director with RenewableUK, said the enhanced capital allowances announced by the Chancellor Jeremy Hunt in his spring budget were nice, but they need to go further if Britain is not left behind by the Inflation Reduction Act.
“We definitely need something for the longer term, whether it’s capital allowances or some other subsidies or fiscal incentives,” she said.
Nuclear reaction
Some are expecting announcements to be made regarding the nuclear sector on Thursday, given what Mr Hunt said in his budget speech.
“Because the wind doesn’t always blow and the Sun doesn’t always shine, we will need another critical source of cheap and reliable energy. And that is nuclear,” Mr Hunt told the UK Parliament this month.
Mr Hunt also said nuclear power would be classed as “environmentally sustainable” in the green taxonomy. That means nuclear projects and companies will receive the same investment incentives as renewable energy, which, some analysts contend, could boost investment in the UK's nuclear sector considerably.
In addition, Mr Hunt announced the launch of Great British Nuclear (GBN), a government body to support the UK’s nuclear industry by providing better opportunities to build and invest.
He also unveiled a competition for Small Modular Reactors (SMRs), which should be completed by the end of the year. If the technology is viable, the UK government will co-fund an SMR project.
Details of these projects could be unveiled on Green Day, although speculation is rife that the announcements will concentrate more on the oil and gas industry, because it is thought the event will be held in Aberdeen, the UK's main city for North Sea oil.
“It’s really hard to say what’s going on inside government, because internally they were calling it ‘Green Day’ and then suddenly they did a kind of handbrake turn and said no, it’s not ‘Green Day’, it’s ‘Energy Security Day’,” Doug Parr, chief scientist at Greenpeace, told The National.
“From what I’m seeing there’s going to be quite a lot of things for the oil and gas industry to celebrate — there’s not going to be much for anybody else to celebrate,.
“I hope I’m proved wrong — there seems to be stories of the electric vehicle mandate coming through, which is good. But it looks like another event for the oil and gas industry.”
Investment capital
Tom Greatrex, chief executive of the Nuclear Industry Association, told The National that although he had received little indication of what might be announced as part of Green Day, the nuclear sector was expecting some details on the green taxonomy issue and GBN set-up soon.
If nuclear is included in the green taxonomy, it means that “it is designated as being green and therefore part of the future decarbonised power mix, which is as it should be, because there are no objective criteria as to why it shouldn’t be”, he said.
“And what that does, fundamentally, is give a very strong vote of confidence to the investor community.
“It’ll open a larger and deeper pool of investment capital, which means more projects are likely to be invested in, which means more opportunities for supply chains to be part of it."
However, others have objections to nuclear being afforded the status that being included in the green taxonomy brings, arguing that while it may be a net-zero technology, it is not — because of the nuclear waste issue — green.
“It means you’ve undermined the value of the taxonomy,” Tom Burke, chairman and founding director of the environmental think tank E3G, told The National.
“It reduces ‘green’ to being just about climate change", he said, rather than being environmental.
“The point about green is that you have to meet certain standards and one of them is that you don’t do any environmental harm elsewhere. And nobody has a radioactive waste solution and there are lots of bits of the fuel cycle of nuclear that are bad for the environment.
“So, if the only thing you’re measuring is carbon, then you might say that nuclear is better than coal and gas — if carbon is the only thing you care about, that would be true. But that’s not what the green taxonomy is framed to address. The green taxonomy is framed to address the environment as a whole, not simply one particular aspect of it,” Mr Burke said.
But for Tom Greatrex at the Nuclear Industry Association, the issue of nuclear waste has been blown out of proportion.
“Every energy source has waste,” he told The National.
“The thing with nuclear is that the [radioactive] waste you have to pay attention to is very small in volume and manageable, and it has been managed safely and effectively in the UK for the entirety of time that we’ve been using it to generate electricity.”
In the mix
The UK government wants a quarter of the country's electricity to be provided by nuclear power by 2050 and it has committed a £700 million investment into the building of the Sizewell C nuclear plant in the east of England.
“The reality is that to get to decarbonised and an energy-secure mix of power for the future, then you need a range of different sources, including large-scale wind, solar and some storage technology, and you’ll need nuclear as well, because you need a certain proportion of firm power,” Mr Greatrex told The National.
“And if you want firm power that is low carbon and energy secure and not reliant on burning fossil fuels, then nuclear is the technology that gives you that.”
But others feel that nuclear energy is a 20th-century solution to a 21st-century problem and that the UK government would be better off spending the money on insulating the country's buildings, adding more wind turbines and developing battery storage technology.
Nuclear power plants are by no means cheap. In May — following a review — EDF, the French owner of the Hinkley Point C plant in Somerset, said the completion costs for the project could be as high as £26 billion.
Ploughing hundreds of millions of taxpayer pounds into nuclear power is “a fundamental error that’s been made by the government,” Tom Burke at E3G told The National.
“Nuclear energy is a white elephant that really ought to be euthanised.”
Doug Parr, chief scientist at Greenpeace, agrees.
“I would say that it [nuclear energy] is not worthwhile, because it’s a distraction for time and energy that could be spent better elsewhere in the economy and you could be creating problems that you don’t know what to do about,” he told The National.
Nonetheless, for Mr Greatrex the UK government is making the right noises on nuclear power — moving it into the green taxonomy, creating a body to oversee investment (GBN) and facilitating the development of SMRs.
He told the The National that the events of the past year or so and the current energy crisis “all underline the benefit you get from having nuclear as part of your mix”.
Many analysts agree and say that some nuclear power is going to be required if the UK government has a chance of hitting its net-zero target by 2050.
“I think we are behind the curve from a net-zero perspective and ultimately this source of power is going to be needed if we want to get to net zero,” Tom Gilbey, a global equity analyst at Quilter Cheviot, told The National.
“I believe it is worth it and the innovations in nuclear should enable the lingering waste problem to be minimised,” he added.
It is by no means certain that any more light will be shed on Mr Hunt's plans for the UK's nuclear sector after the broader Green Day announcements on Thursday.
We have been informed that Mr Shapps will “announce an ambitious, positive and practical set of plans”. What we don't know is how much detail on the expansion of the UK's nuclear power capacity will feature in those plans.
