2021 – the year to answer the difficult questions

For the energy market at least, 2020 ended with somewhat of a crescendo. Within a matter of weeks, the prime minister’s 10-point plan, the National Infrastructure Strategy, the Committee on Climate Change’s sixth carbon budget, Ofgem’s final determinations and the long, long awaited Energy White Paper set the direction for the industry for the years to come.

2020 in some ways provided an insight into what the future holds for the energy market. While demand was reduced, we had record-breaking renewables generation which combined to create a market which often was well over half of generation. In August, wind alone provided nearly 60 per cent of generation and in December, when demand is higher it still accounted for 43 per cent.

With milestones like these, now that offshore wind is a mature industry and renewables are now the cheapest form of power, it’s only right that the focus of government shifts towards the next challenges and the enabling technologies. What’s more with the Covid-19 vaccine roll-out under way, 2021 is universally regarded as the year in which to power forward with a green recovery from the economic tumult that the pandemic has caused.

Over half of the commitments the prime minister made in his 10-point plan were for nascent technologies such as decarbonised heating, transport, aviation, and industry. The forthcoming slew of consultations will see the government seek to put some meat on the bones, answering the difficult questions that the remainder of the energy transition poses. In the run-up to Christmas, we set out our own Energy Networks 10-point plan and the many ways in which the energy networks were already delivering against the prime minister’s ambitions.

The Hydrogen Strategy mooted for the end of Q1 should clarify the first steps which the government is taking to deliver in a technology widely regarded as central to hitting net zero. ENA’s own Hydrogen Network Plan, to be published later this month, sets out the decisions and investments needed to fully explore the opportunities hydrogen can provide and expedite the delivery of them, all at least cost and disruption to the consumer.

Electric vehicles are witnessing a cost reduction akin to that of offshore wind. With an even earlier uptake mandated there’s work to be done to get the infrastructure in place and to build customer confidence in the switch. That’s why we have been working closely with Ofgem to make the most of the funds already allocated to energy network companies, with further detail due to be published in the coming weeks.

Critically, all of this is all framed against the backdrop of the 2021 United Nations Climate Change Conference (COP 26). Climate summits inevitably prompt the attending Governments to try and outdo one another. The re-entry of the USA under the Biden administration’s forceful climate mandate and the pivot of east Asian economies to ambitious net-zero targets will necessitate sharp elbows for the host nation to keep the spotlight. The commitments made by the prime M=minister and members of his Cabinet in the past couple of months set an agenda for delivery whilst most other countries are still making pledges.

The UK’s international leadership in renewables, smart grids and decarbonised gases gives it an opportunity to surmount what was once considered the insurmountable. If this year has taught us anything, it is that the UK’s energy industry is both resilient and adaptable.

When combined with customers calling for change and an ambitious government that is dedicating significant attention to net-zero emissions, we are uniquely placed to use the run-up to COP26 to finish the blueprint for a green future. As the Climate Change Committee’s Chris Stark said recently, 2021 is the year we’re all going to have to “buckle up”.