The UK is going through a transition that will transform today’s energy system, writes DNV’s Hari Vamadevan, but not sufficient to meet its 2050 Net Zero emissions commitments
As we tick towards the quarter-century mark, bold policy making, and unprecedented financial investments are required if the United Kingdom is to meet its 2030 and 2050 decarbonisation targets.
While Westminster can lead the way, this approach must be replicated by the Scottish, Welsh, and Northern Irish governments and local administrations.
The UK can take confidence from its unquestionable spot as a global leader in the energy transition, but more must be done. In our first ever UK Energy Transition Outlook (UK ETO) that was released early in December, DNV found that the UK will not meet its legally binding ‘Net Zero by 2050’ target and will also fall short of its nationally determined contribution commitment for 2030 under the Paris agreement.
So how does the country reach the achievable target? There are hurdles in the way and factors such as rising inflation, high interest rates, high energy prices, and disrupted supply chains will all pose challenges.
Some recent positive news came with Rishi Sunak’s announcement that a new consultation on the building of onshore wind farms in England is set to be launched. Current strict planning consent requirements effectively mean that there is a de facto ban on windfarm construction, but they represent a critical component of the UK’s future energy mix.
Our UK ETO forecasts that, by 2050, the country will reduce its emissions by 85% compared to 1990, corresponding to residual level of emissions of 110 MtCO2/year by mid-century. Of these residual emissions, 85 MtCO2/year are energy related, equally split between emissions from space heating, aviation, and commercial road vehicles.
There are options at the disposal of those who can make a difference. These include eliminating emissions from buildings through a combination of boosting heat pump penetration up to 20 million households and decarbonising the remainder by substituting natural gas with green hydrogen. Of note to local governments is that this latter point is best achieved through a regional approach.
Transport emissions can be offset. The uptake of electric vehicles (EVs) or fuel cells for commercial vehicles could be accelerated through incentives and subsidies to reduce the approximately 40% of the 39 MtCO2 transport emissions that are linked to road transport. The aviation sector represents a far sterner challenge and large-scale implementation of direct air capture should be considered.
Significant investment in energy efficiency measures and the development of new and existing infrastructure will be required. DNV forecasts a CAPEX spend of £804 billion on the UK energy system over the next 28 years, compared to a spend of £35.8 billion over the last four decades. This includes investment in power generation, the electrical grid, EV charging infrastructure and other key aspects of the transition.
To finance this, operators must be encouraged to increase the flow of capital into clean-energy projects, but this must be balanced with a discouragement of capital flow into unbated fossil fuels.
Our UK ETO forecast shows that moving to net zero requires significant investments in energy efficiency measures and in upgrading and building new infrastructure. This will need to be backed by a clear implementation plan from the Government that delivers a well-resourced and resilient supply chain, a competent and skilled workforce, a consumer base that is primed to provide demand as well as access to finance schemes. Alongside these measures, a policy of active engagement with society at large to incentivise resource efficiency through increased product circularity, product utilisation and sharing as well as lifestyle changes towards healthier diets, lower demand for aviation travel and modal shifts in transport would help in enabling the UK to sustainably meet its net zero target by 2050.
About the author:
Hari Vamadevan, Executive Vice President and Regional Director, UK & Ireland, Energy Systems at DNV
After 15 years leading O&G and Maritime activities in the UK and sub-Sharan Africa, Hari was appointed to lead DNV’s Energy Systems related activities across Renewables, Power, and O&G. DNV provide a range of assurance and advisory services across the energy value change, with particular focus on the energy transition. Additionally, Hari is Senior Vice President, and sits as Chair across all DNV’s UK & I businesses and legal entities.