Yesterday, the government announced its long-awaited Net Zero Strategy, a 368-page document that provides a route the nation will take to a net zero economy.
The strategy outlines how spending will be prioritised for power, fuel supply and hydrogen, industry, heat and buildings, transport, natural resources, and greenhouse gas removals. We take a quick look at the key policies in each of these sections.
Power
The strategy reaffirms the electricity grid will be net zero by 2035 with renewables playing a pivotal role. The 40GW of offshore wind power by 2030 was reiterated in the strategy, as was the 1GW of floating offshore wind backed by £380mn of funding for the sector.
A final investment decision on a large-scale nuclear plant is planned to be given by the end of this Parliament. On nuclear, the strategy also launched a new £120mn Future Nuclear Enabling Fund, retaining options for future nuclear technologies, including Small Modular Reactors, with a number of potential sites including Wylfa in North Wales.
There were also promises on new flexibility measures, including energy storage, to help “smooth” out future price spikes that are currently being seen in the market.
Fuel supply and hydrogen
The document acknowledges that despite electricity becoming the primary source of energy, many sectors require low carbon alternatives. The strategy has committed to delivering 5GW of hydrogen production by 2030 by mobilising £20-30bn.
Already set up is the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme to fund new hydrogen and industrial carbon capture business models – up to £140mn will be provided to the scheme.
Industry
According to the report, at least £14bn of public/private investment will be mobilised to help decarbonise industry in line with the UK’s net zero goals. It sets out the delivery of four CCUS clusters and capture 20-30MtCO2 across the economy, including 6MtCO2 of industrial emissions, per year by 2030.
It also promises the future-proofing of industrial sectors and the communities they employ through the £315mn Industrial Energy Transformation Fund (IETF).
Heat and buildings
The Heat and Building strategy was also launched yesterday, and the Net Zero strategy reaffirmed its pledges.
Transport
A zero emission vehicle mandate to improve choice and give clear signals to investors has been given to deliver on the 2030 commitment to end the sale of new petrol and diesel cars and 2035 commitment that all cars must be fully zero.
Also announced was the funding of £620mn for zero emission vehicle grants and electric vehicle (EV) Infrastructure, including further funding for local EV Infrastructure, with a focus on street residential charging. A further £350mn of up to £1bn Automotive Transformation Fund (ATF) was also declared to support the electrification of UK vehicles and their supply chains.
Natural resources, waste, and fluorinated gases
The government pledge to support low carbon farming and agricultural innovation through the Farming Investment Fund and the Farming Innovation Programme. Also stated was a boost to the existing £640mn Nature for Climate Fund with a further £124mn of new money, ensuring total spend of more than £750mn by 2025 on peat restoration, woodland creation, and management.
Greenhouse gas removals
The Net Zero Strategy outlines ambitions for the UK to remove emissions from the atmosphere. To do this, the government will mobilise around £20bn in funding to deploy at least 5MtCO2 /year of engineered (greenhouse gas removals) by 2030.
A full analysis and commentary on the Net Zero Strategy will feature in next week’s Energy Spectrum. To request a free trial or discuss a subscription, please contact Robert Buckley on r.buckley@cornwall-insight.com.
