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  1. Spotlight on Policy
23 June 2023updated 12 Oct 2023 11:45am

The opportunity cost of net zero

Great Britain has one chance to decarbonise the economy – let’s take it.

By Claire Dykta

Great Britain needs a net zero energy system within the next 12 years. If we get it right, we will reduce CO2 emissions and breathe cleaner air. If we get it right, we will reduce our reliance on gas, enhance our energy security, and make electricity more affordable over the long term.

But if Britain gets it wrong, we will miss the opportunity to unleash the growth that decarbonisation can deliver, and we will fall behind other global superpowers in the race to net zero. Low-carbon energy generation and the infrastructure to deliver it won’t get built, pushing up bills for consumers. Energy storage won’t be there to fill the gaps when the wind doesn’t blow and the sun doesn’t shine. Burgeoning green industries for carboncapture technology and hydrogen production won’t make the progress they require, pushing thousands of green jobs abroad.

The collective initiative to date across the government, regulation and industry to meet the challenges of net zero has been impressive. But our landscape has changed significantly. Along with the rest of the world, I watched in horror as Russia’s illegal invasion of Ukraine sent shockwaves across the globe. Vladimir Putin’s weaponisation of energy spiked costs and exposed the link between natural gas and electricity prices. Putin’s decision was not only an act of war; it was a wake-up call to the world to accelerate the journey to net zero and break the reliance on imported fossil fuels.

As Great Britain’s Electricity System Operator, we sit at the heart of the energy system. We don’t own assets such as pylons or wires. We keep the electricity system in balance and ensure that power gets safely to consumers and customers on a second-by-second basis. We are driving change in the energy industry, transforming our approach to system operation and energy markets to make sure that, by 2025, we can run a net zero electricity system for short periods, and to do this every second of the day by 2035 – a goal the government committed to in 2021.

But achieving a clean energy system is only one piece of the net zero puzzle. The energy we use must not only be clean, it must also be secure and reliable. How can we maximise Great Britain’s incredible renewable energy resources if we do not have sufficient low-carbon technologies to back them up when their output is low?

Even then, clean, secure energy will only help if it is affordable. The recent rise in consumer energy bills is the most poignant demonstration yet that the costs of energy cannot be ignored. If we want to encourage the fourth industrial revolution in Great Britain and secure future investment, access to low-cost clean energy is paramount.

Balancing energy costs and security while chasing down a net zero energy system is not going to be straightforward. There are difficult choices to come. The nature and scale of these choices necessitate a new, fully independent body that can provide impartial advice to the government and to Ofgem at those critical junctures for Great Britain – the Future System Operator.

A net zero energy system cannot be planned in isolation and the way we plan it must evolve to be smarter and more strategic. We need to think about where the optimum location is for new, large-scale electricity generation, reducing the distance that electricity has to travel to reach its final destination. We need to consider where flexible technologies can best be deployed to soak up excess renewable energy at low cost.

The Future System Operator will take a view of the whole energy system across electricity, gas, their networks, other low carbon sources of power and flexible technologies such as interconnectors and energy storage. This holistic approach to the future energy system can deliver £3bn-£4bn of cost reductions, ultimately impacting consumer bills over time.

The government’s intention to make the Future System Operator fully independent as an arm’s length body, free from commercial interest, is central to its added value to the industry. With the government as the sole shareholder, the Future System Operator’s expert advice can be considered impartial, paving the way for accelerated decisionmaking in the best interests of Great Britain.

I am immensely proud that the government and Ofgem decided to place the Electricity System Operator at the heart of this new body, building on our world-leading expertise in zero carbon system operation and our outstanding track record in system reliability. Our transition is fully underway and we are collaboratively developing our plans for how the Future System Operator’s roles will expand over time.

Great Britain has one opportunity to Great Britain’s Electricity System Operator ensures power gets safely to consumers make net zero happen. We do not need to strive for perfection, which is the enemy of the good. We do not have the luxury of time. The government, the regulator, the Future System Operator and the energy industry need to build on the monumental decarbonisation efforts so far and seize the moment before it is too late. If we blink, we will miss it.

Claire Dykta is head of markets at the Electricity System Operator, the organisation that ensures that Great Britain has the essential energy it needs by making sure supply meets demand every second of the day.

Over the past 20 years, she has worked in a diverse range of regulatory, commercial and operational roles and has been at the sharp end of changes in the UK power sector, including being responsible for optimising the power grid for the first UK coal-free day.

Claire has previously been named in the @rise_utils list of the top 25 UK influencers in the energy industry, in the top 1,000 @SustMeme global influencers on Climate & Energy and recognised in the 2020 HERoes women executives list. She sits on the advisory board for the Oxford University-run UK Centre for Research on Energy Demand.

This article originally appeared in the 23 June issue of Spotlight – a special supplement on party policy. To read the full report click here.

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