A new report has identified an expanded role for the state in order to accelerate the pace of decarbonisation.
The report by Nesta and Baringa Management Consulting, funded by the European Climate Foundation, sets out an expanded role for the state that could boost the pace of decarbonisation, bring down the costs of the transition, improve the resilience of the energy system and promote economic growth.
The report makes the case for greater state involvement in order to decarbonise the power sector as fast as possible, ideally by 2030.
It stated: “Looking beyond that – to achieve net zero emissions across the whole economy – we need to decarbonise transport, heat, and ‘hard to abate’ sectors like large industry and aviation.
“As result, we face the challenge of achieving and maintaining zero carbon power, whilst addressing an unprecedented increase in electricity demand from about 300 TWh in 2030 to around 450-550 TWh, or 55-90% of total energy needs, in 2050.
“Hence, we present a strong focus on the power sector in this report.
“Progression towards this target will require around £350bn to £500bn of investment over the next ten years in the power sector alone – in the face of stiff international competition for finance and resources.”
Through meetings with senior industry stakeholders, including the new government, the study has helped to inform government policy regarding the role of the state and the formation of Great British (GB) Energy.
The first of the four roles identified is the state as a planner: introduction of a system architect that would develop an overarching strategic plan to guide technology choices and locational deployment of assets, co-optimising these choices with network development.
The second is the state as a developer: undertaking a range of roles such as pre-development for large-scale assets identified.
The third is the state as an investor: carrying out a range of investment activities including investing directly into higher risk emerging technologies.
The fourth is the state as an enabler: with actions ranging from planning system reforms that would help unlock potential projects to a new public energy procurer that would coordinate energy procurement for public bodies.
Phil Dingle, Director of Future Networks for Lucy Electric, said: “We are supportive of policies which increase the speed of delivering renewable generation within the UK, but as spotlighted in the report, connecting increased low-carbon generation capacity with homes and businesses will require network investment to quadruple to reach net zero power by 2030.
“We urgently need clear investment signals and the right frameworks so key Net Zero supply chain partners like Lucy Electric can scale up and deliver.”
Yselkla Farmer, CEO of BEAMA, added: “Accelerating decarbonisation of the UK is one of the biggest economic opportunities of our generation and this report could not have been clearer in stating that we need to pick up the pace.
“The UK energy system needs unprecedented levels of investment and supply chain growth to meet targets for Net Zero and clean power, so the £35 billion savings for energy consumers by 2050 is welcomed to ensure we deliver in a way that manages the cost of energy for homes and businesses.
“Managing this efficiently will be a vital role for GB Energy.
“BEAMA’s research with the Energy Systems Catapult has shown that investment pre-2035 in our power grid will ensure a least cost approach to 2050.
“What we need is market stability, certainty, and speed, coupled with an ongoing commitment to deliver flexibility market frameworks which will help drive inward investment into the supply chain and transform our energy market into a zero carbon, more affordable opportunity.”