Informer Issue 555 - 05/07/2022

A major report from the Government’s climate change advisor has warned that the UK is not on track to achieve Net Zero despite significant progress in recent years. The Climate Change Committee (CCC) said it welcomed the Government’s restated commitment to Net Zero, but said “holes must be plugged in its strategy urgently”. “The window to deliver real progress is short,” it warned. In its first comprehensive appraisal of UK’s Net Zero Strategy, the CCC noted the areas of strongest progress are “backed and led by well-designed Government policy”. They include deployment of renewable electricity and the adoption of electric cars which is running ahead of CCC and Government growth projections, showing that consumers are willing to adopt low-carbon options when offered a cost-effective product. But areas where much more progress is needed include home energy efficiency where the CCC identified a “shocking gap in policy”. “The UK continues to have some of the leakiest homes in Europe and installations of insulation remain at rock bottom,” it pointed out. CCC Chairman, Lord Deben, said: “The UK is a champion in setting new climate goals, now we must be world-beaters in delivering them.” Read more

A strengthened regulatory framework is needed to ensure that Net Zero transition plans are credible and implemented across the economy, according to a new report. The report from Finance Watch, an NGO which focuses on the financial sector and its wider impact, warned that competing objectives and measurements are breeding confusion. Recent greenwashing scandals have highlighted how a lack of clarity can result in misleading claims that damage the overall credibility of Net Zero plans. Finance Watch said current confusion has resulted in contradictions, pointing out that since the COP 21 Paris Agreement in 2015, the major banking institutions of the world have provided $4.6 trillion of fossil fuel financing, despite their membership of several Net Zero alliances and their commitment “to accelerate a transition to the net-zero economy”. Thierry Philipponnat, Chief Economist at Finance Watch, said: “Net-zero can only be meaningful if we define it well and use it to conduct policies and practices that will have a real-world impact. “We are seeing an appetite from most governments and the private sector to change for the better. But if we want to reach carbon neutrality, we all need to be working towards the same goal.” Read more

Draft plans for the next electricity distribution price control will deliver increased investment for Net Zero without increasing charges for consumers, according to Ofgem. It said tough efficiency challenges on network companies and lower returns for investors will transform local energy grids to support the transition to a cleaner, affordable, home-grown low-carbon energy system. Over the next five years, the regulator said consumers will also see a more secure and reliable electricity network less at risk of power cuts, and a grid that allows for new innovations to give more control to consumers through better data. Jonathan Brearley, Chief Executive of Ofgem, said: “These are challenging times, and this is the path out of relying on expensive and polluting imported fossil fuels and moving to a home-grown energy system, that exploits the best of modern technology to level out demand and reduce costs for consumers. “We’re determined to get the best possible deal for consumers and the proposals we’ve published will mean that substantial additional investment can be made to deliver net zero without placing any further pressure on bills.” Read more

Building sustainable and clean energy systems will be harder, riskier and more expensive without more nuclear power, according to a new report. The International Energy Agency said nuclear power can play a significant role in helping countries to securely transition to energy systems dominated by renewables. However, the report said nuclear’s role in transitioning to Net Zero depended on governments putting in place robust policies to ensure safe and sustainable operation of plants for years to come and to mobilise the necessary investments including in new technologies. The industry must also quickly address the issues of cost overruns and project delays that have beset the construction of new plants in advanced economies. Nuclear is currently the second largest source of low emissions power after hydropower, with nuclear plants in 32 countries. “In today’s context of the global energy crisis, skyrocketing fossil fuel prices, energy security challenges and ambitious climate commitments, I believe nuclear power has a unique opportunity to stage a comeback,” said IEA Executive Director Fatih Birol. “However, a new era for nuclear power is by no means guaranteed,” he added. Read more

Giving households a fixed price ‘block’ of energy could ensure access to affordable energy for all while still incentivising efficiency, according to a new report. The proposal is one of the ways consultancy Stonehaven believes the Government needs to frame its response to the crisis to support its long-term objectives, notably the push towards Net Zero. Giving households access to some fixed price energy, a proposal which Professor Dieter Helm also suggested in his Cost of Energy Review, would protect poorer households in particular against price spikes. Anything used on top of the block would be at full market tariffs which would encourage efficiency. Stonehaven’s report also suggest the Government looks at developing a salary sacrifice scheme for investment in energy efficiency and setting a floor price for consumers selling surplus solar power. “Our research suggests that consumers are responding to high fossil fuel prices in ways that are designed to use them more economically. They expect energy prices to stay high for some time,” said the report. It said for better off consumers, high energy prices are making investments in energy efficiency seem more financially attractive but it was important that lower income households are also able to benefit. Read more