As UK energy professionals today add their voices to those calling for a green recovery, Dr Rob Gross FEI, Energy Institute Council Member and Director of UKERC, attempts to decipher the white smoke emerging from the Treasury.
Fears by some that we might have reached ‘peak net zero’, and that we were in for a rerun of post-2008 when climate mitigation fell off the radar in tough times, appear to have been dispelled. At least for now.
That the Treasury has been convinced to invest £3 billion on a key element of what’s needed to set the UK down the track towards its emission reduction goals is welcome, and reflects a concerted case that’s been made by industry and NGOs alike.
It’s one that the Energy Institute’s members right across the UK energy sector – including oil and gas, renewables and the demand side – make again today in the annual Energy Barometer survey report. Energy efficiency is singled out as both the biggest missed opportunity of the past decade and the foremost option for plugging the emissions reduction gap in the next.
Furthermore, in the context of COVID-19, more members urge retrofitting existing housing stock than any other action for a resilient recovery, probably for the same reasons it’s finding favour with ministers.
The economic, environmental and social co-benefits of this have never been clearer. Improved insulation reduces bills and makes buildings more comfortable. It helps meet climate change goals, given today’s homes represent a fifth of emissions, and the vast majority of them will still be around in 2050. It’s a win-win for the resilience and affordability of our wider energy system – reducing the need for relatively costly power and gas supply infrastructure.
And it just happens to be pretty labour intensive and geographically widespread, creating lots of opportunities for skilled manual labour. Industry estimates put it at 40,000 jobs over the next two years, and 150,000 by 2030.
It’s reassuring to hear the Treasury describe the Chancellor’s announcement as a “down payment”. Substantial intervention in decarbonising buildings is long overdue. What’s required is a sustained multi-year programme to establish the market, give supply chains the confidence to invest and consumers the chance to consider what retrofit measures would work best for them and plan them in at a time which suits them. The Better Buildings Neighbourhood Program introduced by President Obama in 2010 had a four year timeframe and did just that. Support also needs to be available for properties of all kinds, whether owner-occupied, social housing or private rented sector.
Wider green stimulus
The pandemic has turned energy on its head. The Energy Barometer reports very few of the EI’s members expect energy demand, passenger journeys, industrial activity and emissions to rebound to beyond pre-pandemic levels; in fact most foresee them remaining subdued for an extended period.
They overwhelmingly support calls for ministers to use the discontinuity as an opportunity to build back better. Four in five agree with the Committee on Climate Change (CCC) that stimulus should be channelled into green industries and jobs, and support for emissions-intensive sectors should be contingent on climate change action.
And for good reason. Nine in ten EI members believe the UK is currently off track for net zero by 2050; more than half of them say we’re even off track for the target for 2030 without urgent policy action.
They prescribe decisions now, not just in energy efficiency, but across heat and transport – to bring on low carbon aviation fuels, hydrogen HGVs, heat pumps, hydrogen ready boilers and carbon capture demonstration to get us on track to deliver. They also note the progress made with renewable electricity generation, thanks to sustained policy, but this needs to keep going too if the UK is to get anywhere near its ambitious climate goals.
Not all of these low carbon endeavours offer the same immediate, shovel-ready co-benefits as household insulation. Some will offer a relatively small number of mainly specialist employment roles in specific regions; others will take years to mature into fully-fledged industries. And there will always be concerns about displacing jobs in incumbent fossil fuel-based parts of the economy.
But the fact is we know we want to transition to a lower-carbon energy system. Net zero is already hard wired into our legislation and there is near consensus across our politics on this.
Ministers need to look at the evidence and pursue most urgently those options that appear promising on multiple fronts; more efficient, lower emission, less expensive, and offering opportunities for economic benefits and well-paid jobs. But they will also be wise to recognise the need for convincing action for one other stand out reason – the UK’s responsibility as host of COP26 in Glasgow next November.
Orchestrating the international ‘Race to Zero’ and the diplomacy required by it over the next year will call for every bit of credibility we can muster. Hence why leading by example at home is singled out by EI members more than any other measure as the priority for maintaining the UK’s status as a climate leader.
The delay to COP26 bought breathing space but the moment is fast approaching when the UK will need to prove its moral authority. As CCC Chair Lord Deben said, “the UK’s international credibility is on the line”.
The Energy Institute’s Energy Barometer 2020 can be found at www.energyinst.org/barometer/2020
This blog post was originally published by BusinessGreen on 9 July 2020