Centrica’s 2045 net zero target shows the ‘tide is turning’

Centrica’s aim to reduce its emissions to net zero by 2045 show the “tide is turning” for energy businesses, an industry observer has said.

This morning (25 February) the British Gas owner released its preliminary results for year ending 2021 in which it revealed it had made a £362 million loss.

Alongside the financial update were plans for the business to achieve net-zero emissions five years ahead of the UK’s national target. In its announcement Centrica acknowledges domestic heating as being the single largest contributor to carbon emissions in the UK.

As such it is preparing to launch a hybrid heat pump trial in the coming months with customers which it says is an opportunity to prove the role hybrid heat pumps can play in decarbonising homes. It is also developing a paid-for proposition for air source heat pumps.

Speaking to Utility Week following the announcement Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit (ECIU), said he believed that Centrica’s position as the market’s largest supplier could be a good opportunity to promote the benefits of low carbon heat.

He added: “Centrica has such a foothold on the consumer side of things which means it can really drive forward some of changes that need to be made. Some announcements today were about starting heat pump trials, potentially starting to make an air source heat pump product which is marketed to the public which would be a huge change.

“One of the issues holding back the switch to low-carbon heat for example is that people replace their boilers when they break and they ask their company for advice. If the company were to offer up a heat pump, and if investment goes into the supply chain the cost of the actual units would come down, you could end up with the company using their unique selling point, their customer base, to drive forward action in things like heat.”

Marshal added that he believed the 2045 ambition reflects the journey the Centrica has been on.

He said: “The most interesting thing is where Centrica has come from to make this announcement. It’s not long since Centrica owned a significant number of fossil fuel power stations, was one of the main advocates of fracking in the UK and British Gas was a fairly regressive voice on climate change.

“To flip from that to a net-zero target obviously shows that the tide is turning and this is an inevitability. All companies no matter how dirty or high carbon they’ve been in the past will have to deal with this. To bring dates forward shows that this is where the public mindset is now, it’s no longer a case of green being ‘nice to have’ for your company.

“Now consumers look for a company’s green credentials before deciding whether or not to buy their products and services. Overall it’s a sign of the times.”

Elsewhere in the sector, Ovo has announced a much more ambitious net-zero goal than Centrica. In 2019 the company launched Plan Zero, a series of commitments which aim to reduce Ovo’s environmental impact by 2030, including net-zero carbon emissions. It also pledged to halve its customers’ carbon footprints by this date.

Speaking about the company’s net-zero goals. Centrica chairman Scott Wheway said: “Climate change is one of the biggest global challenges facing society today and the energy sector is at the forefront of the need to respond.

“Our new and accelerated climate goals, which are in line with science, underpin the clear role and responsibility Centrica has in supporting customers on their journey to be net zero, and in decarbonising the energy system and our business.”