Centrica CEO: UK Government is right to mandate net-zero transition plans from businesses

Centrica has published its net-zero transition plan today (4 November)

Speaking at the UK Pavillion at COP26 on the day the business published its climate transition plan to underpin its commitment to net-zero by 2045, O’Shea said: “At Centrica, we like to try and lead some of these things from the front, but I welcome very much that we mandate these [plans].

“In reality, some companies will want to do this voluntarily and some may not, so you ‘ve got to have the investors, the owners, the government laying exactly what we want.”

The plan includes headline commitments to take the share of annual investment in low-carbon solutions from 5% in 2021 to 50% by 2025, with a focus on solar and battery energy storage. It comes just days after Chancellor Rishi Sunak confirmed that large UK firms in high-emitting sectors will be mandated to publish net-zero transition plans by 2023, with a new verification standard under development, designed to ensure these plans are credible and not greenwash.

O’Shea explained that, for Centrica, investors have been quicker to put the pressure on for a transition plan than the UK Government.

In his opinion, this is only right, given the company’s role to play in delivering the infrastructure and skills needed for the UK’s energy transition and in engaging the general public throughout this process.

To this latter point, the firm has ten million UK customers. Customer-facing commitments in the plan include delivering up to 20,000 heat pumps and 100,000 electric vehicle charging points annually by 2025, but O’Shea acknowledged that these commitments, plus the Government’s updated grant schemes, may still not make installations affordable for low-income homes in the short-term.

Upstream and in-house

Upstream, looking at generation, the plan includes a commitment to deliver 800MW of additional solar generation and battery storage capacity by 2025.

O’Shea noted that while Centrica has certified all of its electricity as “zero-carbon” for two years now, much of this has been done using Renewable Energy Generation Origin (REGO) certificates and similar approaches. In the future, additionality will be important at the level of meeting national targets and ensuring a credible corporate strategy.

“Our customers are rightly looking for more additionality; they want to see, touch and feel the locations their electricity is coming from,” O’Shea said. “This is something we, as a business, will continue to grow.”

In terms of employees in-house and the sizeable challenge of upskilling, reskilling and creating new entry-level jobs, O’Shea is optimistic.

“Our colleagues want to work for a company that has the right purpose,” he said, referring to those in office-based roles. Outlining what is next for those in vocational roles on the ground across the UK, he added: “From a very practical point of view, if you want to install heat pumps, you can cross-skill boiler installers. We need more people to do this, full stop, but the same people currently installing boilers can certainly install heat pumps. If you want to install solar and wind, you have to have enough engineers – civil and environmental. There’s a great opportunity for us here in the UK to grow more well-paid jobs.”

On a UK-wide level, individual businesses, trade organisations and MPs have been calling on the Government to properly detail how it intends to meet its milestone commitment to two million green jobs by 2030. The recent Net-Zero Strategy, MPs on the Environmental Audit Committee (EAC) have highlighted, contains no definition of which jobs will be classed as green; no comprehensive measures to improve skills; and a headline commitment of 440,000 roles – just one-quarter of its 2030 target.

Centrica’s plans will be reviewed every three years and O’Shea said he hopes to be able to bring some commitments forward in the coming years. 

Initial pre-mandate plans, he said, can “gather momentum internally and for the industry”. This momentum can be continued by leaving “flexibility” for more ambitious goals.

Global picture

Earlier this week, the World Benchmarking Alliance (WBA) published a major assessment of how automotive, oil and gas and electric utility giants are planning to support workers, communities, customers and others through the low-carbon transition.

180 firms were assessed and only nine scored an overall grade of 50% or higher. Worryingly, less than one-quarter have public commitments on reskilling or upskilling current roles. Planning was weaker still in the fields of supply chain engagement and policy advocacy.

WBA is urging other firms to follow in the footsteps of SSE and BP – the only two companies assessed which have already completed the fundamental steps of developing full just transition plans and making the key points publicly available. SSE’s full just transition strategy was published last November.

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Sarah George

Net-Zero November: Join the conversation during edie’s mega month of content and events

As critical negotiations at COP26 formally start, the award-winning edie content has launched Net-Zero November – a return to an entire month’s worth of digital content and live events, all dedicated to accelerating the race to a more resilient, zero-carbon economy.

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