THE GREEN RECOVERY The road to Britain's net zero future - Prospect Magazine
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THE
GREEN
RECOVERY
The road to Britain’s
net zero future
NO GOING BACK
ANDY BURNHAM
ELECTRIC DREAMS
RACHEL MACLEAN
A JUST TRANSITION
MARTHA MCPHERSON
MARCH 2021 | IN ASSOCIATION WITH
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green_supp_v2.indd 2 15/01/2021 14:17
MARCH 2021 | PROSPECT THE GREEN RECOVERY 1
CONTENTS BUILDING BACK
2 NO GOING BACK
BETTER
Coronavirus and the climate Covid-19 brought immediate health and economic crises. Climate
emergency are two sides of the
same coin disaster can feel remote by comparison, but now is the time to act
ANDY BURNHAM
JOSH LOWE, PROSPECT
3 TIME TO ACT
Investing in low-carbon jobs is not
T
just about the future he pandemic turned 2020 into 2
PHILIP DUNNE a year of immediate and all-
consuming crises—of public
6 SPARE CHANGE health, and of economic
The part hydrogen should play in wellbeing both national and personal.
the wider climate puzzle But it also marked yet another year where
JULIA KING the global climate emergency became
more evident, from wildfires in California
7 THE PRICE OF POWER
to record high summer temperatures
Finding the balance between
closer to home.
flexibility and stability For the government and civil society
ROBERT GROSS these dual disasters could together spawn
10 BUILT TO LAST a revolutionary response—one which
Public appetite is there for us to combines robust economic stimulus with
build cleaner, greener homes averting planetary catastrophe. Boris
Johnson last year announced a “green
CLIVE BETTS
industrial revolution,” with significant
11 IN THE GREEN investment and big new ideas in green 10
Financial markets can align with our transport and places, green energy,
climate goals and green innovation. But while the
RHIAN-MARI THOMAS government’s ambition has been broadly
welcomed, it faces hurdles too.
14 A JUST TRANSITION In part, this is a story about technology.
Green innovation can’t only be about We must clean up our energy mix, and
flashy tech that means leaning more heavily on
MARTHA MCPHERSON electricity, for example to power our
transportation. On page 19 Rachel
15 BUCKING THE SYSTEM Maclean, Minister for the Future of
People and communities must be at Transport and Decarbonisation, tells us
the heart of how we store and use how Britain can benefit from the coming
power boom in electric vehicles. Innovations like
REBECCA WILLIS carbon capture and storage and hydrogen
energy also bring with them opportunities
16 IN NUMBERS: THE UK’S JOURNEY and potential pitfalls.
TO NET ZERO But this is also a question of 18
18 CAPTURING THE MARKET leadership—of politicians displaying both
The UK has what it takes to lead the strategic vision and tactical flexibility. On
page 2, Greater Manchester Mayor Andy
way in carbon capture and storage
Burnham explains why, in 2019, the city
JON GIBBINS
declared a climate emergency not just for
19 ELECTRIC DREAMS symbolic reasons, but to galvanise public
How Britain leads the way on and private sectors alike. Philip Dunne,
decarbonising vehicles Environmental Audit Committee Chair,
writes on page 3 of the need for national
© NUNO ALMEIDA/ALAMY STOCK PHOTO
JOSH LOWE
INTERVIEWS RACHEL MACLEAN government to align short-term pandemic
response with long-term green goals.
There’s a long road ahead, but if the UK
gets this right, we could build back to a
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green_supp_v2.indd 1 15/01/2021 14:10
2 THE GREEN RECOVERY PROSPECT | MARCH 2021
NO GOING BACK
Coronavirus and the climate emergency are two sides of the same coin
ANDY BURNHAM MAYOR OF GREATER MANCHESTER
T
he past year showed us how radical change
can be possible when faced with a global
crisis. Right across the world, we have
been forced to adapt the way we live, work
and travel, and rethink the way we protect
livelihoods and communities at risk. But we also saw
how the impact of such a crisis hit hardest amongst the
most disadvantaged people in society.
The challenge of the coronavirus pandemic is
inseparable from the challenge of the climate crisis. If
the message wasn’t clear before, it must surely be now:
we need urgent action to create a world that is more
sustainable and more resilient than before.
Here in Greater Manchester we’ve been working on
making our ambitions a reality. Back in 2019, the Greater
Manchester Combined Authority (GMCA) declared a
climate emergency. This was not simply a symbolic
commitment, but a clear message with a specific target
for the city-region to be carbon neutral by 2038, and a
© ANDY BARTON/ALAMY LIVE NEWS
plan to put us on the path to achieving it.
Achieving those ambitions will require making similarly
radical changes to transport, generating energy, and
powering our homes and buildings. Challenges like how
to fund energy-efficiency retrofitting at scale or changing
our energy supplies resist simple, narrow policy making.
These problems are complex, requiring systemic change,
involving many different resources and organisations.
The GMCA acts as a convenor to bring together a broad can offer a solution to cutting carbon emissions and Progress in the
base of local stakeholders, from the private sector, social reducing fuel poverty, improving homes and creating high face of
housing providers, academia and community groups, quality skilled jobs. We are working with our partners to adversity: even
all working with local government to create innovative develop a systematic approach, considering not just the as coronavirus
solutions to fundamental environmental and economic skills deficit, technical solutions and innovative finance, shut down
issues. These groups are not “talking shops”—they have but how to stimulate demand for the solutions we are Greater
created shared objectives and strategies, and provided the developing. Manchester,
basis for co-operation to achieve them. Our increasing connectedness also requires new skills work carried on
Despite the challenges of 2020, we continued to make in low-carbon heating and storage systems, which may in the fight
good progress. We established an Energy Innovation soon become the norm for many households. We’ve against climate
Agency with our universities, and an Environment Fund seen the Smart Data Communications Company (DCC) change
with the Wildlife Trust. We supported solar projects with open their national centre here, while Upside Energy is
our local authorities and initiated retrofitting programmes expanding its innovation hub.
in homes and across the public estate. But we can’t ignore With typical Manchester spirit, people here are
the reality of the current situation. Our businesses have already taking the initiative. Retrofit Get-In, the training
suffered under local and national restrictions. People’s programme set up by theatre workers while our cultural
health and economic security have been hit hard, venues were closed, provides a fantastic model to
particularly the younger generation. support reskilling. Despite this, until demand for these
We need a recovery that doesn’t just reset everything skills increases, market confidence will remain low. We
back to the start of 2020, but responds to these needs need government to commit to long term funding to build
and prepares us for the future. Our plan here in Greater confidence in the market.
Manchester will focus on delivering growth, skills and Many years from now, when we reflect on this period,
employment to meet our environmental commitments. I hope we can look back and say that this was the time
The problems we now face may be complex, but we have we got serious about tackling the climate emergency and,
the potential to reshape both our environment and our by doing so, started transforming our places and people’s
economy for the better. lives for the better. This is our chance not to go back to
Take retrofitting, a problem that has repeatedly eluded normal, but forward to something better, greener, and
policy makers. A co-ordinated programme of retrofitting fairer for everyone.
green_supp_v2.indd 2 19/01/2021 17:12
MARCH 2021 | PROSPECT THE GREEN RECOVERY 3
TIME TO ACT
Investing in low-carbon jobs is not just about the future
PHILIP DUNNE CHAIRMAN, ENVIRONMENTAL AUDIT COMMITTEE
I
n January, as the UK plunged into a further period of landfill. National recycling efforts are stalling, and
severe national restrictions, important sectors of the electronic waste has a huge and detrimental impact on
economy began grinding to a halt. The Chancellor our environment.
quickly confirmed renewed economic stimulus These transformations to the economy will not
packages: a recent commitment of £4.6bn, for happen overnight, but the government must set the
example, was aimed at ensuring businesses do not fold direction of travel, detailing realistic paths to net zero.
and securing millions of jobs. But even this challenging The UK’s “Nationally Determined Contribution” under
period brings an opportunity to ensure a “green” the Paris Agreement, aimed at reducing emissions from
economic recovery. We must seize it. The Environmental 1990 levels by at least 68 per cent by 2030, is rightly
Audit Committee in the House of Commons, which I ambitious. Now we must see the detailed strategies and
chair, is examining how to align future such economic government actions to back it up. The UK plays host
measures with the UK’s ambitious climate and to COP26 in November, and all eyes will be on us as
environment goals. an environmental world leader. The Chancellor’s next
To champion a net zero economy, the UK must budget on 3rd March must back this ambition, and
develop the workforce skills to deliver it. Economists ensure that the UK’s spending plans align with its net
predict 2.6m people could be unemployed by mid- zero and biodiversity commitments.
2021, marking the highest level of unemployment Incentivising business to adopt more sustainable
since the financial crisis in 2009. The creation of green behaviour will be key, and taxation could play a part
jobs will be instrumental in addressing this crisis. The in this. Submissions to our inquiry into the post-Covid
UK is a science and technology powerhouse, with recovery support tax changes to stimulate a low-carbon
thriving clusters around the country. It needs a skilled future. The Treasury should consider how taxes can
workforce not only to develop crucial green technologies better penalise pollution and waste. After Brexit, the
like hydrogen, offshore wind and heat pumps, but also greater freedom to change national VAT rates could be
to undertake the installations required at pace. The used to encourage consumer behaviour towards these
committee has heard that a national retrofit strategy, goals. Further tax incentives may also be required to
with education providers at its heart, is required to meet the PM’s pledge that the only new cars and vans
provide the training and re-training needed for a low- on sale by 2030 will be electric ones.
carbon future. Over the course of the pandemic, many people have
developed a greater admiration for science—driven in
“THIS CHALLENGING PERIOD part by the development of treatments and vaccines in Blyth in
record time. Similarly, we must trust and be guided by Northumberland,
BRINGS AN OPPORTUNITY. the science in reaching net zero carbon emissions by which is set to
WE MUST SEIZE IT” 2050. This target appears remote, but the window of be home to one
opportunity to make meaningful change is narrow. We of the UK’s first
As the government has brought forward to 2030 the cannot afford not to act. “gigafactories”
date from which the sale of new petrol and diesel cars
is banned, the electric vehicles market must expand
rapidly. Government support will be necessary to scale
manufacturing of batteries and the wider electric vehicle
supply chain to make a rapid switch from manufacturing
combustion engines to ultra low and zero emission
vehicles. Up to eight so-called “gigafactories” will be
required in the UK to manufacture electric vehicles and
their batteries. The government recently announced that
Blyth Valley will be the home to the first of these, creating
thousands of low-carbon jobs.
© DAVID LEVENSON/ALAMY STOCK PHOTO
Manufacturers and retailers, especially online
laggards, need to develop a circular economy, which
will support many new roles in electronics and
related industries. We must all of us make better use
of what we have, giving a new lease of life to items
rather than discarding them. In my committee’s
recent report on electronic waste, we were shocked
to find that many devices are not built to last, are
almost impossible to repair, and are too often sent to
green_supp_v2.indd 3 15/01/2021 14:10
4 ADVERTORIAL
THE GREEN INDUSTRIAL REVOLUTION:
THE NEED FOR A SYSTEMS-LED
APPROACH FOR TRANSPORT
Holistic thinking is key to decarbonise transport
MIKE BELL GROUP STRATEGY AND TRANSFORMATION DIRECTOR, RICARDO PLC
T
he UK government has laid out an ambitious Ricardo has always led the way in employing systems-
10-point plan for a Green Industrial Revolution. led thinking in many customer programmes from the
Before we look ahead to the transport elements engineering of battery packs within electric vehicles to
of the plan, it’s useful to look back to the the development of a net zero strategy for the UK water
first Industrial Revolution which was successful industry. Life cycle thinking helps to reveal possible trade-
but took centuries to develop. Rapid urbanisation, offs between environmental impacts in different phases
plus the expansion of agriculture, industry and of a product. Ricardo has over 25 years’ experience
trade—which fostered the UK’s high wage, cheap deploying Life Cycle Assessment including HS2 rolling
energy economy—provided the perfect environment stock, automotive vehicles and industrial products.
for transformational technological innovations. These As the largest contributor to UK GHG emissions,
technologies eventually globalised, but at their outset transport (road, rail, marine, aviation) is a critical sector
were barely profitable and confined to the UK for many to address. If we consider point four (Accelerating the
years, as they addressed British economic conditions. As Shift to Zero Emissions Vehicles), measures already
the efficiency of the innovations improved so the Industrial announced relating to the banning of petrol and
Revolution globalised. diesel cars and vans will assist in reducing emissions.
Are there useful parallels that we can draw? Today Transport electrification is already central to Ricardo,
we are removing our dependency on coal (by 2025) and we are actively assisting customers with the
and shifting to gas and renewable sources such as wind development of advanced battery electric and hybrid
power. The decarbonisation of the energy supply sector is vehicles. Much of the supply chain for electric vehicles
the largest contributor to the decrease in CO2 emissions in is overseas and funding will assist the development of
the UK. BEIS estimates the “levelised cost of electricity” battery “gigafactories” within the UK. This will become
(LCOE) for 2025 to be £46/MWh and £57/MWh for an essential requirement to ensure the tariff-free trade
onshore and offshore wind respectively and £44/MWh export of electrified vehicles to the EU. Ricardo is also
for large solar deployments compared to £85/MWh for a supporting the development of the UK supply chain
gas power station; so renewables will offer us a cheaper for Power Electronics, Machines and Drives (PEMD)
supply of “clean” electricity. This will offer a lever to help leading a consortium working on an innovative electric
decarbonise many parts of the economy. motor for transport.
Green innovations will need help getting off the The number of cars over 13 years old has tripled
ground and innovation funding will help the development in the last 25 years and this represents a significant
and early adoption of technologies which may not be contributor of CO2 emissions for many years to come.
immediately economically viable. Private investment The use of biofuels (derived from woody biomass, or
helped drive the first Industrial Revolution and with agricultural residues/waste) and e-fuels would provide a
the planned green financial measures (including the glide path until the petrol and diesel vehicle parc is retired.
Sovereign Green Bonds) aiming to incentivise investment This existing UK vehicle parc (over 40m vehicles) is not
and develop voluntary carbon markets, we can design addressed by the current plan. In 2019, the number of
and accelerate the conditions for change today far more new cars purchased was 2.3m so it will take many years
quickly than two centuries ago. to replace this parc with zero emission vehicles. Ricardo’s
Climate change requires a rapid response which is vast experience in engine technology can help support
co-ordinated across the economy, but the problem is companies to develop and test new bio- and e-fuels.
complex. The EU’s Renewable Energy Directive (2009) Clearly, the main focus of point four relates to cars,
is a good example of how well-meaning regulation can where the bulk of road transport emissions are created.
have a negative impact—in this case the promotion of However, with the consultation on the phasing out of
food-based biofuels for transport did not take account new diesel heavy goods vehicles (HGVs) planned, it is
of the indirect land use change (ILUC) emissions in the important to realise that zero emissions solutions are
greenhouse gas (GHG) accounting, leading to a cap being more challenging than for cars. Battery electrification
put on production in 2015. A systems-led approach may not be economical, or practical, for all freight
is required to ensure that we make the right decisions, applications and hydrogen may offer a more suitable
avoiding “burden shifting” of emissions and making the zero tailpipe emission solution. When we consider life
optimal decisions for limited energy resources. cycle assessment approach to hydrogen usage within
green_supp_v2.indd 4 15/01/2021 14:11
ADVERTORIAL 5
transport, the CO2 emissions associated with hydrogen generation Decarbonisation Plan may remedy this. For example, moving more
is taken into account. freight by rail would reduce GHG emissions by a factor of four. With a
Today, almost all hydrogen is generated from fossil fuels releasing multi-modal policy for both freight and personal/passenger transport,
vast quantities of CO2 in the process. If we are to make hydrogen underpinned by incentivisation schemes from government, a viable
a part of our Green Industrial Revolution, we need to address the business case to decarbonise further portions of the network and
production process. Point two (Driving the Growth of Low Carbon reduce GHGs would be provided. Road User Charging (RUC) based
Hydrogen) aims to develop 5GW of low carbon hydrogen by 2030. on environmental impact could help that shift.
This will be achieved using Carbon Capture, Usage and Storage With a systems-led approach we can address some of the
(CCUS) on existing fossil fuel processes (so called “blue” hydrogen) distribution challenges of hydrogen. Aviation and marine are
and electrolysis, powered by renewable electricity, to produce addressed by point six (Jet Zero and Green Ships). Hydrogen plays
“green” hydrogen. One of the fundamental challenges is with a role in helping to drive net zero aviation and clean maritime
limited low carbon hydrogen, determining where hydrogen should technology. Integration of transport energy needs can help support
be used. There are many competing applications and insufficient the transition of the transport sector to hydrogen, through the
infrastructure for distribution. utilisation of combined rail depots, terminals and freight distribution
Point five (Green Public Transport, Cycling and Walking) includes centres on key corridors developing multi-modal hydrogen hubs
investment for a National Bus Strategy. Again, electrification is which can service road, rail freight, aviation and marine. This
key with funding for two all-electric bus towns. The reference to would further support the shift to the most effective transport mode
“British built zero emission buses” perhaps leaves the door open for greatest GHG benefit, forming spoke and hub systems where
for hydrogen-fuelled buses too. Ricardo is expanding geo-fencing long distance freight would effectively be transported by rail to
technology currently in operation in the UK’s first zero emissions local distribution centres, which enable captive delivery road fleets
geo-fenced bus fleet in Brighton and Hove, investigating the use powered by hydrogen or using electric batteries.
of hydrogen fuel cells to convert existing diesel bus fleets, and has The first Industrial Revolution took several centuries to come
developed artificial intelligence software to model the suitability and to fruition. We have far less time to address climate change, so
cost of bus route electrification using route and bus schedule data to it is essential that any plan will accelerate our Green Industrial
analyse and optimise battery and charging requirement and costs. Revolution before the UK’s net zero deadline of 2050. The
Further electrification of the rail network and extensions 10-point plan is a much-needed boost, but to really capitalise on
to smaller locations will help increase rail routes and further the investment and ensure the greatest contribution to reducing
decarbonise the network. Rail is ideally suited to direct use of our GHG footprint we need to look at the overall system holistically.
renewable energy with potential for direct connection of renewable With hydrogen offering so many options both in transport and
systems to the electrified lines. Combined with line-side energy industry, scaling the right application will be critical. We do not
storage systems these can reduce losses from transmission of currently have an untapped supply of low carbon hydrogen and
energy. Ricardo has already partnered on the development of a for many applications, electrification will provide the most efficient
solar-powered railway. route. Ricardo’s breadth of expertise plays well into supporting the
One of the challenges with the 10-point plan is that transport plan and we are extremely encouraged to see the investment from
is not considered holistically yet. The promise of a Transport the UK government.
green_supp_v2.indd 5 15/01/2021 14:11
6 THE GREEN RECOVERY PROSPECT | MARCH 2021
SPARE CHANGE
The role hydrogen should play in the wider climate puzzle
JULIA KING, BARONESS BROWN OF CAMBRIDGE, LIFE PEER AND DEPUTY CHAIR, CLIMATE CHANGE COMMITTEE
E
veryone is talking about
hydrogen. The German
government announced last
year that it will invest €9 billion
in its hydrogen industry. The EU
has a hydrogen strategy, as do Australia,
China, Korea, the Netherlands, Germany,
Japan and many others. The UK is working
on its own, to be published in the spring,
after the Climate Change Committee
(CCC)—the advisory body of which I am
Deputy Chair—identified a need, by 2050,
for hydrogen use at a scale comparable to
our existing electricity system. That gives
30 years to develop a major new UK
industry. It’s all very exciting, but hydrogen
isn’t a magic bullet for reducing our
© PHIL REES/SHUTTERSTOCK
emissions: we must use it sparingly.
A successful path to net zero starts with
energy efficiency, minimising the amount
of energy we use overall—for example
by insulating homes and using more
public transport. After energy efficiency,
we look to electrification: heat pumps, The UK’s potential for wind generation puts us in prime position to be a major producer of “green” hydrogen
electric cars and vans, electric furnaces
for steelmaking. By 2030 we will have What’s more, here in the UK we have The UK’s advantages go beyond
an almost fully decarbonised electricity some real advantages for producing it. geography and geology. The development
system, and electrification is generally the We have some of the best offshore wind of a hydrogen industry offers us what
most efficient way to provide power. resources in the world around our shores, we have missed in the success of
Hydrogen, meanwhile, should be a estimated at around 800GW, far more offshore wind—the opportunity to be
“last resort.” This is because its production than we need to hit our 2030 and 2050 a major player in the delivery of original
is energy intensive. Unlike fossil fuels, wind power targets. Recent analysis by equipment for the industry, both for
hydrogen is not present in sufficient the CCC and the Energy Systems Catapult supply and demand. The UK is home to
quantities in the natural environment for indicates that a very high renewables growing companies making electrolysers,
us to use. So instead, it has to be made. electricity system, such as the one we fuel cells, innovative hydrogen storage
We produce so-called “blue” hydrogen by will have by 2050, will be capable of solutions, hydrogen buses, and hydrogen
reacting methane with steam, producing generating electricity at quite a lot of times boilers, to name just a few.
significant quantities of CO2 which must when we don’t need it—indeed, up to 30 Alongside this, our commitment to net
be captured and stored if we are to hit per cent of the time. zero and the offshore wind and carbon
net zero goals. “Green” hydrogen is storage capability will attract inward
produced by electrolysing water using zero “HYDROGEN IS NO MAGIC investment for hydrogen production and
carbon electricity. These energy intensive BULLET. BUT WITH THE use.All of this is supported by a strong
processes mean hydrogen is always going academic base in electrochemistry,
to be relatively expensive. RIGHT STRATEGY, IT materials and energy systems for the
But some industrial processes are COULD TRANSFORM hydrogen economy.
difficult or impossible to electrify. We will OUR ENERGY MIX” So hydrogen may be no magic bullet,
not be able to insulate all of our historic but with the right strategy and careful
building stock enough for a heat pump This “spare generation” can be used application, it could be transformative.
alone to keep us comfortable in winter. to produce green hydrogen, with excess The opportunity is there for the UK to
The weight of batteries needed to power hydrogen exported to European neighbours develop a major new industry for its
a long haul articulated truck doesn’t look with less wind resource. In terms of blue production, use and export, providing jobs
realistic. These are the kinds of scenarios hydrogen, our advantage is geology— and economic growth across the UK, and
where hydrogen comes in: when we have depleted oilfields and other geological especially in coastal and manufacturing
exhausted other options. And we will formations suitable for permanent storage areas. This is an opportunity we must
certainly need it, both here and globally. of huge quantities of CO2. not miss.
green_supp_v2.indd 6 15/01/2021 14:11
MARCH 2021 | PROSPECT THE GREEN RECOVERY 7
THE PRICE OF POWER
Finding the balance between flexibility and stability
ROBERT GROSS D
IRECTOR, UK ENERGY RESEARCH CENTRE AND PROFESSOR, IMPERIAL COLLEGE LONDON
© DANIEL LEAL-OLIVAS/PA ARCHIVE/PA IMAGES
The dramatic shift from coal to renewables in our electricity supply is down to subsidies and astute policy decisions
A
t the turn of this century, wind and solar power provided sources of flexibility must be found. This will come from additional
just 0.2 per cent of UK electricity generated. Within 20 interconnection with mainland Europe, new electricity storage and
years that share grew to around 25 per cent. Over the “smart” demand, such as varying the charge rates for electric cars.
same period, coal fell from around a third to just two per One of the most significant drivers of wind and solar growth
cent. This helped the UK to reduce emissions from the around the world was the creation of long-term fixed price contracts
power sector by half. Indeed, the growth of renewables and decline known as feed-in tariffs. These are attractive to investors because
of coal have been the main reasons that UK CO2 emissions have they give a stable revenue stream to wind or solar developers. Since
fallen consistently since the 1990s. As the UK looks towards the 2014, the UK has offered “Contracts for Difference” for renewable
COP26 climate change negotiations, it can rightly point to world- energy projects. Prices are set through a system of auctions and
leading power system decarbonisation. ensure that operators receive a fixed price even when the wholesale
The growth in onshore wind, solar and offshore wind was the electricity market price is low. This price stability has brought low
result of sustained policy support and at times quite substantial levels cost sources of capital into the industry, and cheap capital is a key
of subsidy. Technological improvements have been extraordinary: contributor to cost reduction.
upscaling wind turbines, reducing the price of solar modules, and This is where an important new challenge arises for
creating capabilities to install huge arrays of giant offshore windmills. policymakers. Traditionally, electricity market prices fluctuate:
The costs of new wind and solar arrays have fallen to levels where when demand is high, prices rise. This provides a signal to
subsidy is no longer necessary. higher cost generators to come online and keep the lights on.
Yet in some respects, the last 20 years have been the easy Renewable energy changes this. On windy days, the price of power
part. Progress with installing wind and solar needs to continue if falls to low levels and may even go negative. On the one hand,
we are to get to net zero. The latest target for offshore wind alone policymakers might like wind and solar schemes to be exposed to
represents a quadrupling of current capacity. Analysis undertaken price fluctuations, since this could encourage developers to seek
by the Climate Change Committee suggests that total electricity opportunities to generate when demand is high. On the other hand,
generated will need to more than double so that we can electrify investors perceive exposure to power price swings as a risk and this
our cars and home heating. All of this new power needs to come increases the cost of capital. If prices become too risky investment
from low carbon sources, with a big role for wind and solar. in renewables could dry up altogether.
Meanwhile, incorporating a modest share of wind and solar into The great challenge therefore is to make sure that electricity
the electricity system is reasonably straightforward. This is because markets reward flexibility whilst at the same time ensuring that
much of the flexibility needed to absorb wind or solar energy costs investors continue to be attracted to new wind or solar schemes.
effectively already exists. Existing power stations can flex their output Academics and policymakers do not yet know quite what the right
to follow demand and adjust to the supply provided by wind and answer will be. Working out how to design electricity markets for
solar when available. But the low carbon power grid of the future very high shares of renewables will be key to ensuring that we can
will need to operate with large amounts of variable renewables continue to benefit from low cost and clean renewable energy, and
alongside nuclear power that tends to be quite inflexible. New keep the lights on.
green_supp_v2.indd 7 15/01/2021 14:118 ADVERTORIAL
ENGINEERING OUR WAY TO NET ZERO
IN THE UK
Climate is a complex challenge that requires ambition, strategy and long-term thinking
CHRIS BALL AND DAVID COLE ATKINS
TICK TOCK TO 29 YEARS’ TIME nation’s energy dependent on carbon capture and storage (CCS)—a
Net zero—the buzzword that’s become a legal requirement, when technology yet to be successfully deployed in the UK. In 2050 the
in 2019 the Climate Change Committee (CCC) advised the UK UK’s electricity demand is projected to be double what it is today—
government to adopt the net zero target for 2050. Twenty-nine years from 300TWh to over 650TWh to meet the country’s energy and
may seem far away, but the task is huge and uncertain across all electrification demands.
sectors, and time is already short. Hurdles such as the ongoing global Put simply, the power sector must replace almost all the current,
pandemic and navigating Brexit also threaten to derail the importance ageing generating capacity and build as much again. This is an
of fighting climate change. 2020 certainly produced some climatic estimated build rate of 9-12 GW every year, for 30 years, across
disasters: wildfires consuming record areas in Siberia, Australia, firm power (natural gas, nuclear and biomass) and intermittent
and California; Arctic ice reaching record lows; the highest reliable sources (offshore, onshore wind and solar). Again, put simply, this
temperature recorded in Death Valley; and the most active hurricane looks like 48 gas units, six nuclear power stations, 66 biomass,
season over the Atlantic. 6,250 wind turbines offshore, and four times the world’s current
The UK’s response should be heavily focused on kick starting the capacity for CCS.
net zero programme—climate change threats are not going to fade In the short time since these first recommendations, the CCC has
away. “Build Back Better” stimulus packages, the government’s proposed an increased dependence on offshore wind to 95GW. Ever-
10-point plan and the recent energy white paper show the desire shifting goal posts will hinder our ability to track progress and define
and intention, but those alone won’t deliver at the pace required. If steady plans for permitting and construction, but it doesn’t have to
we don’t want our lives to be incapacitated, a nationwide programme be the case. By establishing an ESA, any recommendations can be
must be carried out now, by a governing body or what could be termed orchestrated and programmed to ensure net zero is not only delivered
an “Energy System Architect” (ESA). on time, but in a way that ensures the system as a whole operates
effectively, efficiently and reliably. At the moment, there are many
MEASURING PROGRESS AGAINST EVER-SHIFTING ideas, ideas of plans and checklists, yet no guiding body to put these
GOAL POSTS into action.
Various authorities have modelled future scenarios, but the
government responded to the 2019 CCC recommendation; one MORE ON THE GRID
based on a theoretically achievable energy system that would rely Last month, in the 72 hours from 5th to 7th December, average
on 75GW of offshore wind, 10GW of nuclear and 40 per cent of the electricity demand was 36GW and average wind output was just
© JACK HOBHOUSE/ALAMY STOCK PHOTO
green_supp_v2.indd 8 15/01/2021 14:11ADVERTORIAL 9
3.6GW. From 8am on Sunday for the next 24 hours, the wind WHO RUNS THE SHOW
output remained below 2GW, and at 5.30pm demand peaked at The government’s 10-point plan and much-awaited energy white
43GW. Yet the lights stayed on because we had nuclear, gas and paper set out a checklist of aims across industry and mark a
even resorted to coal as a fallback. As all coal and a number of recognition that progress must be accelerated towards net zero. They
nuclear power stations come offline this decade, there won’t be show commitment to a wide-ranging review of regulation (technical
this easy option. and economic), suitability of current market arrangements, and the
If the latest proposal of 95GW of offshore wind is to be followed, roles of the system operator and Ofgem.
the extent of renewable energy penetration on the UK’s National One step further would be the separation of delivery from policy,
Grid will be at far higher levels than seen today. Renewables are including a review of the roles of the CCC and Department of Business,
required, however there must be a sensible plan for the National Energy and Industrial Strategy (BEIS). Implementing huge tasks has
Grid to be resilient for times when the wind isn’t blowing, or historically been separated from government policy departments, and
not blowing enough. Tapping into solar power isn’t as reliable, as the largest complex programme challenge we’ve ever had to tackle,
especially on winter days where demand for power often peaks net zero is no exception. It should be separated out to become a body
after sunset, when solar generation has stopped. Other clean power answerable to parliament.
technologies such as nuclear and CCS must play an important role; Fundamentally a strategy is now required, not just to 2030, but
their importance in establishing a clean, secure grid must not be for the next 29 years and beyond. The creation of an ESA would be
understated or undervalued. taking responsibility for developing the UK’s energy system using risk-
The CCC balanced pathway, used as a benchmark, recommends based systems engineering—and not shifting economic modelling of
10GW of new nuclear. Hinkley Point C will provide 3.2 of these, and theoretically feasible systems. It would: evaluate all potential delivery
in regard to Sizewell C, the Financial Investment Decision needs to be models as cities and towns start setting their own net zero targets;
as quick as possible. This is not only to ensure future power supply publish annual status and projections; determine R&D schedules for
but to sustain the UK nuclear industry to the minimum level required new technologies; decide on new capacity and infrastructure, and
to be able to actually build nuclear power stations effectively and what’s needed to get us there.
regularly—for example, a minimum of one new large power plant The 10-point plan and energy white paper provide a list of aims,
started every five years. statistics and funding allocations—all of which are welcomed, but
A reliance on offshore wind as the only large-scale zero carbon now is the time for a comprehensive nationwide programme that
power generation option, supported by less than 10 per cent firm not only reaches into almost every home, but also ensures the
power, inadequate storage and transmission and distribution continuation of UK industries and employment opportunities.
infrastructure, will severely limit the UK’s future power options. Achieving net zero by 2050 is an extremely ambitious goal and
The CCC balanced pathway proposes our system to be: 95GW the risk of failure is high; without an ESA, the probability of achieving
offshore wind, 85GW solar, 15GW gas and CCS, 10GW nuclear, net zero by 2050 is greatly reduced. The UK’s energy supply will
5GW bioenergy with CCS—totalling 210GW and an 85 per cent become increasingly dependent on electricity, especially in the digital
intermittent system. age where the very fabric of our society will depend more and more
Excessive reliance on intermittent technology means at best on a stable, secure and reliable power supply. The decisions being
we risk establishing a highly inefficient grid; at worst, incidents taken now are impacting the UK’s ability to achieve its net zero
such as reduced renewables availability and power outages (such commitment and the reliability of its energy supply as we run up to
as the blackout in August 2019 that left a million homes and 29 years’ time.
businesses in the dark) may well become commonplace. Whole Chris Ball is Managing Director, Atkins EMEA and Dr David Cole is
system thinking is an absolute imperative to deliver the right Market Lead for Power Networks. Read Atkins’ full suite of reports
balance of technology. around Engineering Net Zero at atkinsglobal.com
Sizewell nuclear power station in
Suffolk. The CCC recommends
“WHOLE SYSTEM THINKING IS AN
generating 10GW through nuclear ABSOLUTE IMPERATIVE TO DELIVER
power to ensure a balanced THE RIGHT BALANCE OF TECHNOLOGY
pathway to net zero
WE NEED FOR NET ZERO”
green_supp_v2.indd 9 15/01/2021 14:1210 THE GREEN RECOVERY PROSPECT | MARCH 2021
BUILT TO LAST
Public appetite is there for us to build cleaner, greener homes
CLIVE BETTS MP FOR SHEFFIELD SOUTH EAST AND CHAIR, HOUSING, COMMUNITIES AND LOCAL GOVERNMENT COMMITTEE
T
he Housing, Communities and
Local Government Committee,
which I chair, was one of the
six select committees that
commissioned the citizens’
climate assembly last year. The assembly
brought together more than 100 people
from all walks of life and all shades of
opinion to discuss how the UK can meet
its legally binding target to reach net zero
greenhouse gas emissions by 2050. We
felt that due to the transformative impact
that the consequences of climate change
will have on our lives, and the significant
changes to our lifestyles that may be
needed to mitigate them, it was important
that we had an understanding of public
perspectives as we look to shape policy.
The findings of the climate assembly
showed a keen understanding among the
public of the importance of what we do
in our homes for the fight against climate
change. Homes account for 15 per cent
of the UK’s greenhouse gas emissions, so
© FABIO DE PAOLA/PA ARCHIVE/PA IMAGES
reductions there will make a real difference
to overall levels. The participants in the
assembly called on the government to
develop a long-term strategy, supported
by investment and market innovation, that
included scope for local communities to
adopt strategies that worked best for their
areas. They accepted that homes would
need to be retrofitted to remove existing
systems, such as gas heating, and replace Members of the UK’s first citizens’ assembly on climate change in Birmingham. The assembly acknowledged
them with new zero carbon solutions. The the importance of housing in meeting the UK’s emission targets
Committee will consider the work of the
assembly when planning its future work as recently as 2018, only one per cent stringent in meeting energy performance
programme. of new homes were built to the highest targets. Modern methods of construction
The impact of the government’s waste Energy Performance Certificate standard, can also be better utilised, both in
strategy, and its prescriptive national Band A. Ensuring new buildings are as streamlining the production process and
approach to recycling, should serve as a energy efficient as possible and contain providing better housing systems, to
valuable lesson as it develops future policy as many low carbon or carbon neutral reduce the overall carbon output. These
to address the UK’s carbon emissions. systems as economically feasible at the may need more government support
What works in one area may not be so time can play an important role in meeting if they are to be better adopted in the
successful in another and it will be vital the UK’s overall climate goals. Getting building sector.
to ensure public confidence is maintained things right now will also reduce the need The public understanding of the need
if policy is going to have a meaningful for potential retrofitting in the future. for serious action to combat climate
impact on behaviour at home. The government should embrace change is there. It is clear, too, that there
But the challenge is not just in how every opportunity to reduce carbon is a strong public appetite to meet the
existing homes can be made more emissions and be ambitious in setting challenge and the government has the
environmentally friendly. The country is carbon reduction targets for the built opportunity to develop policies based
in the middle of a housing crisis that will environment both during construction and on voters’ confidence and consent. It
require significant numbers of new homes use. Building regulations and planning is essential that the government seizes
to be built, with the government setting guidance can be improved to ensure that this opportunity and delivers the policy
a target of 300,000 per year. However, new housing developments are more platform we need.
green_supp_v2.indd 10 15/01/2021 14:12MARCH 2021 | PROSPECT THE GREEN RECOVERY 11
IN THE GREEN
Financial markets can align with our climate goals
RHIAN-MARI THOMAS CEO, GREEN FINANCE INSTITUTE
T
he Covid-19 crisis has tragically demonstrated Decarbonising our economies will provide significant
that health, economic well-being and the investment opportunities. Harnessing these—“financing
environment are inextricably connected. green”—will require the creation and rapid scaling of
As we look beyond the pandemic, we have new and existing financial mechanisms and markets.
an unprecedented opportunity to build an The establishment of the green bond market over a
inclusive, net zero and resilient economy. decade ago has enabled companies and governments to
Governments globally have already announced $13 raise finance earmarked for green projects and informed
trillion of stimulus packages as an immediate response. the development of sustainability-linked loans and
However, according to the Greenness of Stimulus Index, bonds. In 2020, cumulative global green bond issuance
the UK is one of only six G20 countries to date to have alone surpassed $1 trillion.
a stimulus package with a net positive contribution to There are, however, solutions and technologies
the environment. As longer term recovery measures are crucial to our transition to net zero that do not match
put in place worldwide, we must not miss this once-in- the investment profiles of the financial sector. In these
a-generation opportunity for governments to align their cases, the public sector will be required to act as a
dual missions of economic recovery and meeting their catalyst for private finance by investing in research and
commitments under the Paris Agreement. development, providing guarantees and loans, or acting
While government has a foundational job to do in as a co-investor.
providing public finance, the public purse alone will not Green banks can also be instrumental. The UK
be enough. Governments also need to play an enabling government’s Green Investment Bank successfully
role, creating the conditions to mobilise private capital raised £2.50 of private capital for every £1 it invested,
towards sustainable goals, supporting the creation and is credited with driving the growth and success of
and rapid scalability of new and existing markets, and the UK’s offshore wind sector. The UK’s new National
unblocking barriers. Infrastructure Bank, which commences this spring,
This involves both “greening finance” at the systems and Scotland’s new National Investment Bank, have
level, ensuring our financial system is aligned with the potential to play a similar catalytic role. Meanwhile,
global and national sustainable goals, and “financing finance structures blending both public and private
green,” supporting the investment and financing of finance have the potential to mobilise considerable
companies and projects that achieve net zero and investment towards both domestic and international
nature-positive outcomes. sustainability objectives.
On greening finance, some important progress is Unlocking an ocean of private capital in order to Making finance
already being made. The UK and New Zealand, for finance green and green the finance system will need green will be
example, have both announced they will be mandating public sector support, and ultimately the support of crucial to
recommendations made by the international Taskforce the public, so that governments will be empowered to encourage and
for Climate-related Financial Disclosures (TCFD), build back better, improving the long-term health of our develop a net
ensuring financial institutions and corporates identify economies, ecosystems and citizens. zero economy
and report on their exposure to climate risk. Such
reporting informs assessment and decision-making
across the value chain and encourages behavioural
change at a systems level.
This year will also see the launch of the Taskforce
for Nature-related Financial Disclosures (TNFD) that
will develop a framework for corporates and financial
institutions to assess, manage and report on their
dependencies and impacts on nature. The TNFD is
designed to bring a similar robustness to the appraisal
PHOTO BY RICCARDO BRESCIANI FROM PEXELS
of nature-related risks as the TCFD has done for climate,
and should help redirect global financial flows towards
nature-positive outcomes.
There is more that governments can do, however,
such as considering where national policies may be
preventing the alignment of private capital to sustainable
goals. The reallocation of fossil fuel subsidies, for
example, could finance the clean energy transition,
delivering social, economic as well as environment
benefits as part of the green recovery.
green_supp_v2.indd 11 15/01/2021 14:1212 ADVERTORIAL
CLEARED FOR TAKEOFF
Britain’s aerospace sector is launching a new push for green innovation
GARY ELLIOTT INTERVIEWED BY JOSH LOWE
W
hen most people think of action to WHAT SPECIFICALLY IS THE INTENDED OUTCOME
tackle climate change, the aerospace OF FLYZERO?
industry may not be the first partner Every aircraft type has a slightly different challenge. If it
that springs to mind. But with the travels across the Atlantic, for example, it’s very tricky to
goal of a net zero aviation industry— get to net zero, because of its sheer size and the amount
or “jet zero”—featuring in the Prime Minister’s plans for of energy required to get it that far. Whereas if you’ve got
a “green industrial revolution,” many in the sector are a smaller regional jet that might take you to the Outer
applying themselves to the challenge. Hebrides, then it has slightly different challenges. So
Gary Elliott, Chief Executive of the Aerospace each aircraft type and size needs to be looked at.
Technology Institute (ATI), says we shouldn’t be The idea is that the team will look at many of those
surprised: after all, engineers are all about solving tough different platforms and try to work out what it is that is
problems. Here, he speaks to Prospect about the ATI’s required to achieve net zero for them. It may be battery
new FlyZero project, the impact of the pandemic, and technology, it might be hydrogen, it might be a hybrid
how to provoke new disruption. of those; it may be sustainable aviation fuels for the
larger aircraft. And then we need to decide which of
HOW SERIOUSLY HAS THE AEROSPACE those technologies we really want to invest in for the
INDUSTRY TAKEN ENVIRONMENTAL CONCERNS next few years.
IN THE PAST?
It’s always taken them seriously, whether it’s through WHAT’S BEEN THE GOVERNMENT AND INDUSTRY
international agreements such as the ACARE FlightPath RESPONSE TO THE PROJECT?
2050 goals or through technology, such as more fuel- Firstly, we are fully backed by the government with 100
efficient engines or more lightweight materials. But I per cent funding from the Department for Business,
think in the last two years or so environmental concerns Energy & Industrial Strategy. We are also part of the Jet
have become much more of a dominant force. That shift Zero Council, led by the Prime Minister and attended by
has been driven partly by public awareness of climate the business and transport secretaries. And FlyZero is
change—people and whole industries are more aware, mentioned in the Prime Minister’s 10-point plan for a
and therefore they feel the need to participate and do green industrial revolution. So they are fully supportive.
their bit. When it comes to industry, they’re absolutely
I would also say that the sector is made up of highly- behind the project as well. Lots of the big companies
innovative engineers, and they love a challenge, and they have already stepped up to participate, we’ve got lots
love to make a difference, and they love to improve things. of smaller companies showing an interest, sometimes
Now they have a moral imperative as well. in a slightly different way because of their resource
And there’s also been a few people that have been limitations. One of the things I’ve noticed is that those of
pushing change. I would say, rather boldly, the ATI has us who are a bit older in the sector are much more vocal
been pushing that agenda. When that became a big and much more positive in pushing change than I’ve
part of our strategy and also the way we assess projects ever seen before.
that we might fund, then it encouraged a lot of positive
technological change for sustainability. WHEN AND HOW WILL THE FLYZERO PROJECT
RELEASE FINDINGS?
HOW EXACTLY DOES GREEN AVIATION AND It’s a one-year project, but I’m really keen that we don’t
SUSTAINABILITY FIT INTO YOUR STRATEGY? wait until the project concludes to decide what we need
It’s basically number one. In our current technology in terms of funding to continue. I want to draw some
strategy, Accelerating Ambition, we talk about the need conclusions that allow us, in parallel, to develop other
for net zero emissions and sustainability, and suggest technologies. We’re already doing that in the ATI—within
the different types of technologies that will be needed to our portfolio of investments, there are many technologies
get there. So we’re encouraging people to make this an that are absolutely consistent with what FlyZero is doing.
area of focus.
Then last July we launched a project called FlyZero, IF YOU’RE LOOKING TO SUPPORT PARTICULAR
which is about trying to understand: what are the TECHNOLOGIES, IS THIS ABOUT PICKING
technologies and the aircraft designs of the future WINNERS?
that will get us to net zero? We have Government We will remain very open minded at the beginning. But if
investment of £15m to fund about 100 people who we are to draw conclusions, that means we need to choose
will look at all sorts of potential aircraft technologies and winners. But engineers are very good at making tradeoffs
draw conclusions as to what we need to do to get to and trying to determine what is the best technology. That’s
net zero. something we’ve done since engineering has existed.
green_supp_v2.indd 12 15/01/2021 14:12ADVERTORIAL 13
Co-funded by the ATI AND IS THIS JUST A TECHNOLOGICAL PROBLEM? aerospace has slightly different challenges when it comes
and led by OR ARE THERE OTHER ASPECTS AS WELL? to using batteries.
Rolls-Royce, ACCEL It’s also about understanding what is commercially We are supporting several projects focused on the
aims to break the viable—there’s no point having a technology that doesn’t use of hydrogen as a fuel source. And we’re investing in
world record for have a market. And it’s about trying to understand public new materials: graphene, as an example—new materials
the fastest perception and different business models. It may be, and new production methods that reduce the weight of
all-electric flight for example, that we can come up with a solution that the aircraft and improve its performance. Pretty much
requires people to take two flights rather than one to get everything we invest in, I would say, has some form of
to their destination. But in doing so, they know they are impact on the sustainability agenda.
travelling with net zero carbon emissions.
ARE WE LIKELY TO START SEEING LOTS OF NEW
WITH THE PANDEMIC CAUSING SUCH DAMAGE ENTRANTS INTO THE SECTOR, NEW DISRUPTIVE
TO THE AVIATION INDUSTRY, WHAT PRIORITY ORGANISATIONS? OR IS AEROSPACE JUST A
IS BEING GIVEN TO MEETING ENVIRONMENTAL SECTOR WHERE THE BARRIERS TO ENTRY ARE
TARGETS AT THE MOMENT? TOO BIG FOR THAT?
In some ways, there’s been more of a push—certainly I think we will—indeed we already are seeing some
in terms of people requesting funding for projects. The disruption. There’s certainly a lot of new entrants at the
reality is that the sector is all about innovation. Unless very small scale. There are lots of startup companies
you innovate, then you don’t compete and you die. playing in the space of so-called flying taxis, or urban
Therefore, companies haven’t given up on innovating. air mobility. But I think what we’ll find is some of the
And by no means has sustainability dropped down the technology developed at the bottom, and on a smaller
list of priorities. scale, might find its way up into the more mature, larger
aircraft companies, and vice versa.
WHAT OTHER PROJECTS OR PROGRAMMES IS To provide additional support to startups the ATI
THE ATI SUPPORTING IN THE AREA OF GREEN also has an accelerator program, which is about giving
AVIATION? companies the opportunity to get into aerospace and prove
We have some ambitions for a centre of excellence for UK their technology. Through the ATI Boeing Accelerator,
aerospace battery technology. The country has invested they’ll be put in contact with the right people in larger
heavily already in batteries for the automotive sector, so organisations and may even get funding to prove their idea.
what we’re looking at is: how do we convert some of It’s been a great success and we are just about to welcome
that knowledge and capability for aerospace? Because the second cohort of startups into the programme.
green_supp_v2.indd 13 15/01/2021 14:12You can also read
