The UK Government has a legal commitment to deliver net zero by 2050. It has also set a target to decarbonise the power system by 2035. A report published by the House of Lords’ Economic Affairs Committee examines steps needed to meet these targets, particularly how the capital needed can be mobilised to ensure an orderly, affordable and reliable transition. It concedes that the current energy affordability crisis has made the task more complex.
The report specifically highlights a gap between the Government’s ambitions and the policy needed to enable investment by the private sector and investors. To address this and provide the clarity needed, it is proposed that the Government publish a net zero delivery plan, taking account of energy security, making clear what decisions and operational actions are needed and by when, whilst also incorporating the flexibility required by a three-decade, economy-wide transition.
Several measures are recommended, including:
- More detail on the capacity, timeframes and expected costs of long-duration energy storage (develop an appropriate market model).
- Outline market structures and mechanisms for blue and green hydrogen as soon as feasible.
- Design market models for carbon capture and storage so that investors are given greater confidence that there will be a long-term market.