Build Back Better: Can lessons from the past influence our energy future?

When looking at the factors that will influence future energy strategy, it can often pay to look to the past, according to Npower Business Solutions’ head of flexibility services, Ben Spry

Nearly 10 years ago, we worked with The Grantham Institute on Climate Change and the Environment at The London School of Economics on a major report – The Future Report – which modelled four potential energy scenarios out to 2020.  These looked at the future generation mix, the impact of the then government’s energy policy on renewables, and the role businesses would play in helping the UK reach its environmental targets.

As we are now in 2020, we thought we would take a look back to see which, if any, of the scenarios we are closest to and – importantly – if there are any lessons learned from back then that could help influence future energy strategy.  In a new report – The Future Report 2020: The road to Net Zero – we gathered the views of the original author – Professor Sam Fankhauser – as well as Arjan Geveke from BEIS and Robert Buckley from Cornwall Insight, to debate the technologies, investment and policy needed to reach net zero, and the role business will play factors shaping the energy sector’s future.

Of course, there were many things that were impossible to predict – Brexit, net zero by 2050 being written into UK law, and the huge impact the global Covid-19 crisis has had.  However, there were three key things we believe we can take from the decisions taken then, that will support our future ambitions – particularly as we work towards that important 2050 target.

1. Sustainability should be at the centre of the economic recovery

Decisions taken following the financial crash of 2008/9 in terms of policy and incentives resulted in renewables becoming a viable part of the generation mix.  With this in mind, all the experts interviewed for The Future Report 2020: The road to Net Zero were in agreement that a green recovery in 2020 is not only desirable, it is necessary to secure a robust economic and sustainable future.

In fact, we conducted additional research among 60 businesses where an overwhelming 93 percent said that aligning with the UK’s net zero by 2050 target should be a key factor in the government’s recovery proposals.  A significant proportion also believed that a more sustainable recovery meant a more resilient future, with eight out of 10 businesses agreeing with the statement that ‘maintaining a focus on sustainability and net zero will stand our business in good stead for a quicker recovery post-Covid-19’.

As such, when asked where they believed the most government support should be directed, over 85 percent of respondents said they felt that businesses with a strong commitment to sustainability should be prioritised for post-Covid government support, and that investment should be primarily directed to those in the transport and logistics, manufacturing and construction sectors.

It is clear that when the government promises to ‘Build Back Better’, it needs to be with net zero at its heart.

2. We need investment in both existing and new technologies if we are to hit net zero by 2050

 As we said, looking back 10 years, major policy and investment decisions have had a huge bearing on the positive progress for renewables and the wider sustainability agenda. However, it was also acknowledged that poor planning meant that technologies including CCS did not get off the ground.

As such, all of our contributors believed major strategic decisions around the investment in technologies, incentives for renewables and changes to the structure of the system need to be taken in the next five years if net zero by 2050 is to be a reality.

CCS, BECCS, hydrogen, battery storage and electric vehicles were all cited as technologies that would make the biggest impact on the UK’s decarbonisation goals, as well as decentralisation at scale.

However, following the Chancellor’s recent summer statement, more still needs to be done.  So, we will wait to see what further announcements are made during the main Budget this Autumn, as well as the long-awaited Energy White Paper.

3. Businesses will be key to net zero success

 In 2011, we said that ‘the range of future energy scenarios may be wide, but fortunately the best response for energy users is the same in all of them: pay attention to energy use and manage it wisely’.

This core principle still holds today.  As we look to 2050, large industrial and commercial energy users will play a key role to play in helping the UK reach its decarbonisation targets, by setting their own carbon reduction goals.

As energy professionals, we need to be talking to our business customers about energy efficiency, onsite generation, procuring green energy, reducing and shifting demand.  These will all become more important, particularly as consumers become increasingly influential in calling out good and bad business practice.

So, in conclusion, if the last 10 years has told us anything, it is that it is difficult to anticipate what will happen.  However, despite recent disruptions, the decarbonisation agenda is only going to accelerate.   The next 12-24 months will be particularly crucial, as organisations focus on getting ‘back to business’ post-Covid-19.   It is becoming clear that economic and policy clarity are urgently needed, and – as we await the Energy White Paper later this year- there is now an opportunity to accelerate the projects that will cement a stronger and more sustainable future.

To download a copy of The Future Report 2020: The Road to Net Zero visit www.energy-hq.co.uk/futurereport2020

Utility Week’s Build Back Better Forum is taking place virtually on October 21/22