In the same week Parliament passed legislation enshrining the UK’s new target to reduce greenhouse gas emissions to net-zero by 2050, the CBI has published a set of recommendations to government on how to accelerate progress towards this goal. These were developed with the input of CBI members and the Energy and Climate Change Board.
The government has committed to publishing an Energy White Paper during the summer, with the aim of providing certainty to business investors on the future of energy system. Despite significant progress in switching to low-carbon electricity supplies in recent years, more progress is needed if we are to reach net-zero by 2050.
The CBI calls on Business Secretary, Greg Clark MP
In a letter to Greg Clark MP, we have called on the government to explore financing mechanisms to support the development of new nuclear power stations. With a number of new nuclear projects stalling, and the majority of the UK’s exiting nuclear capacity due to come offline during the 2020s, it is important we secure new supplies of low-carbon electricity to supply increased power demand as we decarbonise. Ending the political block on new onshore wind development is another fix we recommend, as this would bring forward some of the cheapest power supplies we have at our disposal.
Achieving net-zero emissions will only be possible with some form of carbon capture technologies, which will support decarbonisation of our power supplies, alongside industrial processes and potentially aviation too. Developing this technology will not only help us reach our domestic goals, but could also provide a huge export opportunity as countries across the world firm up their decarbonisation plans.
A vision for the future
As well as clarifying the government’s approach to these priorities for decarbonising our electricity supplies, we believe the White Paper will be an opportunity to present a broader vision for decarbonising the economy. In particular, the challenges of switching to low-emission vehicles, and finding solutions to low-carbon heat. Both will require significant changes in consumer behaviour and business interaction. Crucially, the solutions for both will likely require major increases in electric use – the Committee on Climate Change recently predicted that a future low-carbon economy with see peaks in electricity demand four-times higher than today. Therefore, it is vital that government energy policy is inclusive of these different sectors as they become increasingly interlinked.
We have called for a clear and predictable mix of incentives that give private buyers and businesses the confidence to switch to new types of vehicles, whether they be electric, or other forms of low-carbon technology, like hydrogen. This will support uptake while these vehicles remain more expensive than traditional combustion engine cars. Meanwhile, we must develop the infrastructure to enable consumers and business to use these vehicles. A clearer strategy is needed to deliver the right mix of charging infrastructure, including a network of ultra-rapid electric vehicle charge points to give all motorists the confidence that an electric vehicle can work for them.
Improving our building's efficiency
Our recommendations to government also centre on the need to deliver nationwide improvements to energy efficiency and create a plan for decarbonising our heating. A mix of financial and regulatory barriers are standing in the way of better energy efficiency. For example, business that invest in energy efficiency measures end up having to pay increased business rates, which acts as clear a disincentive. Meanwhile, the pathway to improving the energy efficiency of domestic buildings is unclear, with a significant funding shortfall forecast.
Improving energy efficiency is a first step in decarbonising our homes and buildings. A monumental challenge is the 90% of homes currently heated by natural gas boilers will have to be replaced with new technology. Hydrogen boilers, district heat networks and heat pumps are all alternatives. Large-scale trials of these options are needed, and we are calling on the government to deliver a policy pathway to make these a reality.
There was significant media interest in our recommendations, with coverage in the Times, Guardian, Daily Telegraph, Mail Online, and Press Association. The public intervention was timed to influence the final decisions currently being made on the White Paper, which we expect to be published during the summer. Once published, the CBI’s energy and climate change team will share reaction and analysis with members.