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Three UK policy announcements shaping our road to net zero

Over the summer the UK Government published three key strategies across hydrogen, flexibility and transport which provide real opportunity for organisations to decarbonise and use their energy more efficient.

With COP26 just around the corner, 2021 is proving to be a pivotal year in sustainability. Throughout the summer the UK government launched a number of important policies and plans to strengthen our collective efforts in fighting climate change, and provide clarity to organisations on what they can expect. 

In this article, Jack Presley Abbott - Head of Wholesale and Trading Regulation - outlines a summary of three important strategies that have been announced, including:

  • Transport Decarbonisation Plan – How the UK will reduce emissions from the transport sector
  • Hydrogen Strategy - Lays the foundations for the UK’s future hydrogen economy
  • Smart System and Flexibility Plan - a vision and work programme to deliver a smart and flexible energy system    

Additionally, we have included other content to help you and your business dive deeper into these topics and accelerate your own ambitions around net zero.

 

1. Transport Decarbonisation Plan

Earlier in 2021, the government committed to ban new petrol and diesel cars from 2030. Published in July, the Transport Decarbonisation Plan sets out policies that it will consider to ensure that this ban can be implemented and to ensure that low-carbon alternatives, such as electric vehicles are widely available and cost-effective.

The government will consider introducing zero emission vehicle (ZEV) mandates, which will require manufacturers to sell a certain proportion of zero emission vehicles, such as electric vehicles (EVs).

To ensure that electric vehicles can be rolled out and there can be confidence from consumers, there must be enough charging points to enable EVs to be widely used. There is a commitment to a £1.3bn 'EV Infrastructure Strategy' later in 2021 to help deliver the charging points.  Furthermore, all new-build residential and non-residential buildings with an associated parking space will need a charge point in the future

Centrica welcomed the plan’s publication and the focus on charge point infrastructure is welcome and necessary to accelerate EVs being used by customers and the infrastructure needed to support this.

2. Smart Systems and Flexibility Plan

In July, the government and energy regulator Ofgem, jointly published its smart systems and flexibility plan on how to deliver a smart and flexible energy system. This means using smart technologies to provide flexibility to the system, to help manage supply and demand. Flexibility provides consumers greater control over their energy bills, through access to smart technologies and services. In addition, it facilitates the integration of local solutions for low carbon power, heat and transport.

A smart flexible system is seen as key to meeting the cost of net zero at lowest overall cost, reducing costs to consumer by £10bn/year. This is by reducing the amount of generation and network assets that need to be built to meet peak demand

Centrica supports the plan as it is embedding policy that encourages flexibility from consumers and seeks to widening participation in flexibility markets, as well as improving energy system data provision.

Centrica Business Solutions can work with consumers to optimise energy use from their assets, including on-site generation, battery storage and electric vehicles. This plan further demonstrates the importance of optimisation and the increasing focus on this from the government.

3. Hydrogen Strategy

In August, the UK’s Hydrogen Strategy was published which seeks to kickstart the hydrogen economy and sets out how Government will support innovation and stimulate investment in low carbon hydrogen

BEIS analysis demonstrates that by 2050 hydrogen could represent 20-35% of the UK’s energy consumption, demonstrating the real potential of this new clean fuel.

The strategy sets out a number of areas that it wants to work with interested parties on, such as Centrica.

There is proposed support for new low-carbon hydrogen production, mirroring the support scheme used for wind generation. This will be for both green hydrogen (using low-carbon power, such as wind generation to produce hydrogen by splitting water through a process called electrolysis) and blue hydrogen (producing hydrogen by splitting natural gas, and capturing and storing the CO2 by-product). The aim is for the first contracts to be awarded by 2023.

Industrial clusters and wider industry are significant potential demand centres for low carbon hydrogen. Industrial users are expected to provide the most significant new demand for hydrogen by 2030 through industrial fuel switching, reaching up to 45TWh by 2035. Government is supporting switching to hydrogen through the £315m Industrial Energy Transformation Fund and £20m Industrial Fuel Switching Competition.

Hydrogen could play a key role in heating and has launched a series of larger trials which will help inform a decision in 2026 on the role of hydrogen in decarbonising heat.

With this focus on hydrogen, Centrica Business Solutions can work with businesses to work towards deep decarbonisation of all processes with a range of technologies; including the potential that hydrogen-blending, on-site electrolysis and hydrogen fuelled generation presents.

The impact of all these announcements will provide businesses and public sector organisations with a range of new options, directives and funding options to accelerate their net zero ambitions. Centrica Business Solutions already has the track record, technologies and experts in place to help you define, plan and implement your roadmap to decarbonisation. Find out more by getting in touch today.