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1 December 2016updated 09 Sep 2021 2:03pm

Greening energy through industrial strategy

Safeguarding our environment and tackling climate change must be points of priority for policy, writes Dr Alan Whitehead MP

By Dr Alan Whitehead MP

In November of this year, the government accepted and parliament agreed the Fifth Carbon Budget covering the years 2028-2032.

Carbon budgets, designed by the Committee on Climate Change, are the vehicle by which the UK is assured of meeting our targets under the Climate Change Act – of reducing our greenhouse gas outputs by 80 per cent in 2050.

They enable UK industry and energy infrastructure to develop progressive and built-in reductions of emissions, and for changes and adaptations to domestic properties and energy consumption to be made without sudden disruption – providing, of course, that policies are put in place that actually allow this to happen.

The problem right now is that government is, on the one hand, agreeing to the processes set out in successive carbon budgets without putting polices in place that can get us anywhere near –on present trajectories – actually meeting the terms of the budgets.

As far as energy is concerned (and that means both power production and consumption and generation of heat in homes and industrial buildings) the picture is not good at all.

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The Committee on Climate Change now estimates that to meet the terms of Fifth Carbon Budget something like 75 per cent of generation will have to come from renewables, nuclear or from plant fitted with Carbon Capture and Storage (CCS) equipment.

This figure might be modified if demand – particularly for heat – is significantly reduced, which might be achieved through radical programmes of home energy efficiency retrofitting, and if heat itself is significantly decarbonised by changing the sources of heat production, now overwhelmingly supplied by gas.

Although the emergence of significant levels of renewables onto the power systems (enabling renewables to produce about 18 per cent of power) means that we are in sight of meeting Fourth Carbon Budget targets for electricity, heat – with only 5 per cent of it being supplied by low-carbon sources, is woefully off target.

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And without substantial new investment in low-carbon technologies we will stall on electricity as well in the mid-twenties. Labour’s response to this imperative will quite simply be that, as part of its industrial strategy, we will aim to meet the challenge of energy and our carbon budgets.

We will do this by committing to put in place industrial policies to ensure that 60 per cent of all energy (both power and heat) is supplied by renewable and low-carbon means. Of that total, more than 75 per cent of electricity will be supplied by renewables since the contribution heat makes will continue to lag.

And we will add to that a comprehensive programme based on infrastructure project principles of retrofitting homes across the country with the insulation and cladding they will need to become highly energy efficient.

This means, of course, actually putting policies in place to support targets. The key instruments will be the use of Labour’s National Investment Bank to provide the support to put in place the next generation of renewables, and in so doing support those technologies where the UK has a world lead, such as tidal and wave technology, so that we can as a country access significant slices of the world green technology market through exporting our knowledge and developments.

That mediated support, particularly through reducing the cost of capital for development, will be accompanied by a UK content requirement which will ensure that supply chains are nurtured along with headline developments, and a robust UK chain, able to access world markets is established.

We have already seen how assistance with supply chains in securing major component manufacture in the UK, such as the Siemens Offshore wind facility in Hull can work.

We want to see more of the same across a range of technologies such as supporting the emergence of tidal technology through the roll out of tidal lagoons in Swansea Bay and elsewhere and keeping supply and components substantially British.

As far as heat is concerned, progress can be made by replacing the supply of gas to homes and commercial buildings by introducing green gas – biomethane from organic waste treatment, syngas from waste processing, and on a longer time frame, hydrogen – into the system, and we will want to support the substantial expansion of plants, already quietly proving a success with 100 or so small plants already in operation to meet this challenge.

We will be taking a similar approach to the retrofit of Britain’s leaky, energy profligate homes. We will mandate the National Investment Bank also to underpin activity through low-interest loans, an approach that has been successfully undertaken by banks such as the German KFW investment bank.

Looked at in this way, boosting renewable power to the level required to meet carbon budgets doesn’t just end in meeting the budget. As the product of an industrial strategy it also provides thousands of good, permanent new jobs, boosts productivity and exports – and, by the way, will reduce energy bills and support a healthier population.

The alternative, as we are seeing at the moment, is a fitful, and generally counterproductive response to the need to decarbonise our energy sector, including a spate of ill-judged cuts to renewable deployment made by the government last year.

The effective ban on onshore wind, and the pulling away of support for solar PV, coupled with the ending of the Zero-Carbon Homes compact and the ruinous cancellation of the UK’s chance of securing primacy in CCS technology by the late cancellation of two pilot projects have left us in a sorry state as we try to consolidate the initial work on renewable deployment and green technological advance that has, at least, ensured that we meet earlier carbon budgets.

Even with support for offshore wind into the early 2020s, we risk right now coming to a cliff edge in the progress of renewables. Labour’s response will not only put us back on the right track, but will ensure that we have what is often cited as the key to successful investment and support – a clear and established path ahead, with patient investment leading the way.