Clear market signals are needed to help secure a low carbon future for the UK

Posted On: 
14th September 2018

As the UK government is urged by a cross party group of MPs to introduce new carbon reduction targets that will deliver net zero emissions by 2050, ETI chief engineer, Andrew Haslett discusses why it is important that the UK focuses on a balanced and blended approach to the low carbon technologies across the whole energy system to deliver a sustainable UK future.

ETI
Credit: 
ETI

The recent summer which recorded consistent high (and in many locations record) temperatures across the UK and Europe has been a reminder of the reality of climate change, and that the county’s economic and environmental future could benefit from a goal of net zero emissions. However, the fact remains that no single technology will be able to achieve this in isolation. Carbon targets create interdependency, so the choices made in one form of energy affects what needs to happen elsewhere in the energy system - there really is no silver bullet to decarbonisation. And a whole system approach is required.

For the last decade the ETI has been building capability in whole energy system modelling and analysis that can operate at national, sector and local levels. Our modelling shows that if we are to achieve an affordable transition to a low carbon energy system, the answer for the UK lies in a blended mix of technologies, including renewables (predominantly offshore wind), new nuclear, bioenergy, carbon capture and storage (CCS), gaseous fuels as well as a greater efficiency in buildings, industry and transport.

Though there is no ‘saviour technology’ for a future clean energy system, to achieve any potential net zero emissions targets, our research has shown that bioenergy combined with CCS (BECCS) has a significant role to play. The ETI’s modelling analysis demonstrates the value of BECCS to deliver negative emissions (the net removal of CO2 from the atmosphere) whilst also producing energy such as electricity, heat, liquid and gaseous fuels as the only feasible way to meet these targets affordably. Without the ability to deliver negative emissions it is hard to see how the country can meet this net zero aspiration, in a cost effective manner as it requires quicker more prolonged activity concurrently across a number of sectors.  And with no technical barriers to BECCS, the UK is well placed to exploit its benefits as a component of a UK CCS strategy. The challenge now is to demonstrate this in actual deployment, which makes Drax’s recent announcement of their own BECCS demonstration plant an important and welcomed development.

As part of our efforts to deliver an ETI legacy we have secured the future of our Strategic Analysis Function within the Energy Systems Catapult (ESC), to help continue to identify and accelerate energy innovation. Next month, we will be sharing an update of our 2050 energy system scenarios, modelled through our internationally peer-reviewed national planning capability Energy System Modelling Environment (ESME), now maintained and managed by the ESC. These two plausible scenarios show pathways to meeting the current 2050 climate targets and we hope they will help to inform UK government energy policy and make a valued contribution to the decarbonisation debate.

Given the challenges of the UK’s complex energy needs, the ETI believes that there is a need for consistent long-term signals to investors, particularly for large investments in infrastructure assets. Today, current policies do not create economic drivers that are genuinely technology neutral across the whole energy system and individual policies have complex effects on individual markets. The UK needs a wider debate about how we create market signals to drive down carbon emissions across the board, to allow markets to play a much bigger role in driving the best combinations of emissions reductions across different sectors.

We could potentially set standards for carbon intensity, a method proven to clean up pollution that could work for greenhouse gases too. These standards could help to drive investment in emissions reductions, rather than using subsidies. Setting standards for the carbon intensity of electricity and fuels for heating and transport could potentially provide  more reliable, long term signals to drive investment and innovation in low carbon technology.

By the mid 2020’s the UK has to make important decisions about its energy infrastructure and should use the coming years to commercialise low carbon technologies, supply chains and business models. There should also be a focus on developing and proving capability across a mix of key technologies while examining the impact of integrating new technologies on consumers. We are not talking about new revolutionary ideas, more the development, commercialisation and integration of underdeveloped technologies that are already known. If there are reliable policies that reward real emissions reductions, then the power of innovation can deliver the right mix of investment in low carbon energy infrastructure for the future.