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Infrastructure blog

What will our energy system look like in the decades to come?

16 December 2020

The Government has published its Energy White Paper, which outlines ambitious plans to overhaul Britain's energy network on the journey to net-zero.

What will our energy system look like in the decades to come?
The Government has outlined plans to overhaul Britain's energy network. Image credit: Shutterstock

Increased investment in renewable energy, widescale use of clean heating options and – potentially – a decision on the Sizewell C nuclear plant.

These were some of the things that government set out in the long-awaited Energy White Paper this week. Following a range of recent high-profile announcements on the decarbonisation agenda, the paper set out this government’s strategic vision for Britain’s future energy system.

While there were a notable lack of new funding commitments, the paper builds on the Prime Minister’s ten point plan for climate change action and the National Infrastructure Strategy (NIS) in setting out how power and heating networks can be transformed to support net-zero.

Overhauling the system

The White Paper sets out a path to draw in investment to scale up renewables, clean heating, nuclear, energy efficiency, carbon capture, and hydrogen technologies over the coming decade and beyond.

There is also support for a more dynamic electricity grid, more energy storage infrastructure, more interconnection, regulatory reform and more effective use of data to modernise the networks.

As set out in ICE’s recent paper on transitioning infrastructure to net zero, key decisions are needed on the future energy mix, the pathway to decarbonising heat, and reducing emissions from harder-to-abate sectors. The ambitions in the White Paper start to close the policy gap between the net-zero target and the blueprint needed to reach it.

And all of this has enormous implications for the infrastructure sector – from planning and designing, to the delivery, maintenance and upgrading the country’s power and heating assets.

However, while the White Paper delivers a vision and direction of travel, what it fails to provide are the details needed to put it into action.As the CCC recently set out in their sixth Carbon Budget, the 2020s are going to be a crucial decade if we are to make progress on the 2050 net-zero target. 2021 could be the pivotal year for energy policy, with hopes that the needed detail will be set out in strategies for hydrogen, industrial decarbonisation, electric vehicle charging infrastructure and energy efficiency.

The nuclear option

One of the more headline-grabbing announcements in the White Paper was that the government is aiming for a final decision on a large nuclear plant by end of this Parliament, and has entered into discussions with EDF over Sizewell C in Suffolk.

Nuclear power has a key part to play in the transition to net zero as it provides reliable and decarbonised ‘baseload’ power. But it isn’t cheap. Many nuclear projects have gone over budget around the world, with only a handful of third generation plants completed.

The government is considering adopting a form of the Regulated Asset Base model for the nuclear sector, which will transform how it is financed. However, while the model does work in other sectors, the level of risk and cost overruns associated with nuclear means that strong protection for consumers needs to be built into the model.

It’s not just a single large nuclear project that will potentially receive support, though. The £385 million Advanced Nuclear Fund to support the development of Small Modular Reactors is welcome, as is the commitment to conduct further research and development into more advanced nuclear technologies.

Do we have the skills to deliver?

The ambition of the paper to align the needed jobs and skills against the government’s levelling-up agenda is notable. This includes continued support for four industrial ‘clusters’ to develop technology like carbon capture and hydrogen, and the creation of high-skilled, low-carbon jobs dotted around the country.

This means we need new low-carbon manufacturing facilities, a strong supply chain and skilled workers located in those areas.

However, as ICE outlined in its recent State of the Nation report, the UK does not currently have the necessary skills to realise those key net-zero technologies.

The commitment to develop a strategy for upskilling is positive, but it needs to go further. An Infrastructure Skills Plan should be developed to ensure the UK has the capability within the sector to transition to net-zero, while providing the foundations for exporting these skills and technologies globally.

Broadly, the White Paper offers a welcome pathway by the government to develop and deliver a future energy system that will meet our future net zero wants and needs. It gives the sector greater certainty and provides another crucial step on the journey to net zero – and we look forward to seeing more details, soon, about how we can all play our part.

In case you missed it...

Read more about why ICE called on government to address some of these key policy issues in our State of the Nation 2020 report

  • David Hawkes, head of policy at ICE