‘Few quick wins or cheap fixes’: NIC begins plotting delivery of net-zero UK energy systems

The NIC released its last major assessment in 2018

The Commission has today (15 November) published a baseline report for its next major assessment, which is due in 2023. Today’s report pinpoints areas in which policy and/or technology challenges are hampering progress towards what the Commission has determined are its key focus areas: reaching net-zero, minimising other environmental impacts, building climate resilience and levelling up.

On net-zero, the report acknowledges that the NIC will need to consider how best to align its focus with several recent energy policy changes. Among those cited are the Heat and Buildings Strategy, Net-Zero Strategy and the commitment to end all unabated fossil-fuel-based electricity generation by 2035.

The report also points out that these policy packages still leave “major questions to be answered”. On the Heat and Buildings Strategy, for example, the report notes that there will still need to be more clarity on home retrofitting and heat pumps; the strategy will provide grants to 30,000 households, but the Government is targeting 900,000 domestic heat pump installations annually by 2028. The report also emphasises the need for more clarity on hydrogen for domestic heating, as the Strategy defers an overarching decision to 2026.

To this latter point, the report identifies the expansion of hydrogen and carbon capture and storage networks as a key infrastructure priority for the coming years. It notes that the Hydrogen Strategy proposes a scaling-up of both green hydrogen, produced using renewable electricity, and blue hydrogen, produced using natural gas. The exact production mix will need to be determined, the report states, and the development of production and distribution networks given more focus.

“Hydrogen and carbon capture and storage are complementary networks, but they will also compete as routes to decarbonisation in some parts of the economy,” the report states. “There will be challenges in how quickly these networks can be delivered, at what scale, and how plans can be coordinated.”

It continues to note that the hydrogen transition will require high levels of investment and will likely result in higher energy bills or taxes. The NIC has stated that it will assess funding challenges as a priority, mapping a scenario for distributing costs and savings. The hydrogen and CCS pathways to come in 2023 will cover 10-30 years, the report states.

NIC chairman Sir John Armitt said that decarbonising heating and electricity systems in a manner that improves flexibility and promotes levelling up “draws broad political and public support” – but that there are “few quick wins or cheap fixes”.

That said, the report does acknowledge that, by delivering building energy efficiency upgrades at scale before implementing heat pumps or hydrogen, and by unlocking flexibility, the cost of the transition can be lowered and more fairly distributed.

The report highlights previous research forecasting that the UK’s electricity demand is likely to rise through to 2035, due to population growth and the electrification of sectors including transport. With this in mind, and also the need to ensure energy security throughout a time of accelerated decarbonisation, flexibility will need to be built-in at pace and scale.

Wider challenges

A call for evidence has been launched by the NIC and will run through to 4 February 2022.

As well as decarbonising electricity and heat, the Commission will be looking at the digital transformation; asset management in the context of climate resilience; the role of the waste management sector in the shift to a circular economy; urban transport that eases congestion; improved inter-urban transport and surface water management.

Sarah George

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