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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
UK hits major clean energy milestone, while National Grid calls for ‘urgent reform’
The UK recently passed 1tn kWh of electricity generated from renewable energy sources. Meanwhile, National Grid has set out the case for urgent reform to drive the energy transition.
Data from National Grid analytics reveals that it has taken 50 years to reach the 1tn kWh milestone and, based on current projections, it is expected to take just over five years to reach the next trillionth kWh.
Records began in 1970 when renewables represented just 1.9% of total generation, with hydro being the main source at the time (4.5 TWh). Offshore and onshore wind and solar entered the generation mix in 2010, following the emergence of key pieces of legislation including the Energy Review in 2006 and the Renewable Energy Directive in 2009.
Last month, April 2023, 46% of Britain’s electricity came from zero carbon sources, according to the National Grid ESO's (electricity system operator) monthly electricity statistics. The month also saw a new low-carbon intensity record of 33g/kWh on 10 April, with just 0.1% of generation from coal.
As part of its focus on ‘delivering a clean, fair and affordable energy future’, National Grid has set out how industry, government and the regulator can take ‘immediate and decisive action to enable the decarbonisation of the UK power sector by 2035’. It outlines five recommendations in its latest report, calling for specific reforms on planning, the regulatory system, the grid connections process, community benefits and supply chains.
Words of warning
Meanwhile, the Climate Change Committee (CCC) notes that although the UK government has committed to a net zero by 2050 target and embarked on a transition that will materially transform much of the economy, already creating some 250,000 jobs in the process, the full workforce opportunities will only be realised with stronger policies to harness the potential and manage the risks. ‘A hands-off approach to the net zero workforce from government will not work,’ it warns.
The CCC believes that net zero offers the potential for significant net employment creation in the UK, with estimates of between 135,000 and 725,000 net new jobs in low-carbon sectors in sectors such as buildings retrofit, renewable energy generation and electric vehicles. ‘But growth of jobs is not guaranteed. It will require active reskilling and upskilling of the workforce in key areas, with the need for government support,’ it says.
Commenting on the latest CCC briefing, Lord Deben, Chairman of the Climate Change Committee, says: ‘The UK has committed to net zero. The only question is whether the government intends to get there in a way that benefits workers or leaves them behind. This is a unique moment to tailor our approach to skills and jobs, in the certainty of achieving the legal goal. A net zero workforce means secure employment for the future. This is an opportunity for the government to bring real meaning to “levelling up”.’
Furthermore, new analysis from the Energy and Climate Intelligence Unit (ECIU) suggests that current UK government energy policies could leave British homes sending £500/y to overseas gas producers as import dependency rises.
Noting that North Sea gas output is forecast by the North Sea Transition Authority (NSTA) to drop by 75% by 2035, requiring imports to increase, the ECIU states that: ‘Unless policies are sped up for increasing British renewables deployment, insulating homes and installing electric heat pumps, UK homes will become even more heavily dependent on foreign gas for heating and electricity: currently the UK imports around half of its gas, but that could rise to 85% by 2035 without these net zero technologies.’
The report suggests that a house with average insulation, a gas boiler and average electricity usage could be using £5,700 of foreign gas over the next 12 years. In 2035, this dependency would be around £500, of which an estimated £140 would be going to Qatar, according to the analysis. The ECIU claims this contrasts with a ‘net zero’ home with good insulation, a heat pump and solar panels alongside a faster deployment of British renewables, which would be using £10 of gas by 2035, of which just £1 would be used for Qatari gas.
Overall, the UK could be paying up to £30bn/y for net imports of gas from the early 2030s, with the gas trade deficit being over four times the level it was before the gas crisis, warns the ECIU.
Commenting on the analysis, Dr Simon Cran-McGreehin, Head of Analysis at ECIU, says: ‘You can’t squeeze much more out of the North Sea; its output has been declining and the official numbers show that’s going to continue. It’s simply running out of gas. Those arguing against heat pumps are arguing for UK homes being more dependent on foreign gas. And with wholesale gas prices predicted to stay two to three times higher than before the crisis, that means being dependent on an expensive fuel.’
‘The government has some of the right targets for UK energy independence, but not the policies to deliver on them,’ he adds, also noting: ‘The renewables industry has recently expressed concern that the government’s recent tax changes and decision not to reciprocate tax breaks provided to North Sea drillers will slow deployment, as will planning regulations. There is now greater competition for net zero investment, with the US Inflation Reduction Act and the European Union’s response, the Net Zero Industrial Act.’
North Sea potential remains, says NSTA
However, the NSTA says there is much potential remaining in the North Sea, recently announcing that operators are planning to progress 22 projects in the basin in the coming years, which, subject to robust emissions checks, would target some 1.5bn barrels of oil and gas. Furthermore, it notes that seven projects with the potential to produce some100mn barrels have been approved by the NSTA since the start of last year, stating that these could ‘significantly boost the UK’s security of supply as we transition, once production starts up’.
Meanwhile, options to repurpose and reuse North Sea oil and gas infrastructure for low-carbon projects including hydrogen and carbon storage have also been identified, with the NSTA recently announcing the awards for the UK’s first ever carbon storage licensing round.
The round received 26 bids from 19 companies. A total of 20 carbon storage licences at offshore sites have been awarded, including some near Aberdeen, Teesside, Liverpool and Lincolnshire. Once the new storage sites are in operation – and in some cases first injection could come in as little as six years – they could make a significant contribution to the aim of storing up to 30mn t/y of CO2 by 2030, approximately 10% of total UK annual emissions, which were 341.5mn tonnes in 2021, reports the NSTA.
The offers came in the wake of the UK Chancellor Jeremy Hunt’s Budget announcement that the government is allocating up to £20bn in support of developing carbon capture, use and storage (CCUS), starting with projects in the East Coast, Merseyside and North Wales.
This first carbon storage licensing round is likely to be the first of many as up to 100 CO2 stores could be needed for the UK to meet its net zero by 2050 target, notes the NSTA.