On 19 October, alongside a number of other important strategy documents (over 2,000 pages in total), the UK Government published its ‘Net-Zero Strategy’ (NZS) which will help achieve the UK’s interim five yearly carbon targets leading up to net-zero by 2050.

The NZS focuses on eight key areas with priorities and policies set out under each area:

1) The Power Sector

The NZS sets out the UK Government’s ambition that the power sector will be fully decarbonised by 2035 (with the caveat that this will be subject to security of supply). The focus is on domestically-generated renewable electricity to create a power system based on a mix of renewables, new nuclear power stations, flexible storage, gas with CCS and hydrogen.

Specifically, the NZS undertakes to:

• Secure FID on a large-scale nuclear plant by the end of this Parliament;
• Launch a new £120 million Future Nuclear Enabling Fund.
• Create 40GW of offshore wind by 2030.
• Create up to one of floating offshore wind by 2030 .
• Deploy new measures to help smooth out future price spikes.

2) Fuel Supply & Hydrogen

The NZS re-states the ambition that the UK will deliver 5 GW of hydrogen production capacity by 2030.  The UK will at the same time halve emissions from oil and gas and increase the production of biofuels.

Specifically, the NZS undertakes to:

• Provide up to £140 million to establish the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme, with a target of creating up to 250MW of green hydrogen production capacity in 2023.
• Introduce a climate compatibility checkpoint for future licensing on the UK Continental Shelf.
• Regulate the oil and gas sector in a way that minimises greenhouse gases through the revised Oil and Gas Authority Strategy.

3) Industry

The NZS commits the UK to creating four carbon capture usage and storage (CCUS) clusters by 2030.  The UK will support a ‘deep decarbonisation of industry’ through carbon pricing and the creation of low carbon industry clusters, which would have access to Government support under the CCS Infrastructure Fund and revenue support mechanisms.

Specifically, the NZS undertakes to:

• Accelerate the development of the Hynet and East Coast Clusters to capture 20-30 MtCO2 per year by 2030.
• Create a ‘reserve cluster’ of Teesside and the Humber, Merseyside, North Wales and the North East of Scotland.
• Use the Industrial Energy Transformation Fund to future-proof industrial sectors.
• Consult on a net zero consistent UK ETS cap to incentivise cost-effective abatement in industry.

4) Heat and Buildings

The NZS creates a pathway to ensuring that from 2035 all new heating appliances in homes and workplaces are low carbon and sets 2026 as the date for a decision on the role of Hydrogen in heating. The Government will seek to reduce electricity costs and to rebalance energy levies (such as RO and FiTs) and obligations (such ECO) away from electricity to gas.

Specifically, the NZS undertakes to:

• Prevent the sale of new gas boilers beyond 2035.
• A Boiler Upgrade Scheme will incentivize the swap-out of domestic gas boilers.
• Create a new Heat Pump Ready programme to provide funding for heat pump technologies with a target of 600,000 installations a year by 2028.
• Rebalance policy costs from electricity bills to gas bills.
• Fund the Social Housing Decarbonisation Scheme and Home Upgrade Grants and decarbonise public sector buildings by 75% by 2037.
• Launch a Hydrogen Village trial to inform a decision on the role of hydrogen in the heating system by 2026.
• Consider mandatory disclosure requirements for mortgage lenders on the energy performance of homes in their portfolios (UK housing stock generates a 20% of carbon dioxide emissions).
  Continue Reading The UK’s Net Zero Strategy