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The 'Clean Growth Strategy': will it work?

Sizewell nuclear reactorNuclear energy will receive the lion's share of new public investment in R&D for the energy sector in the next few years, according to the 'Clean Growth Strategy'.

Long-awaited proposals for creating a low-carbon economy were published by the government in October 2017, and updated in April 2018. The policy paper outlines various policies and spending over the period 2015 to 2021, with the overall aim of 'growing the national income while cutting greenhouse gas emissions'. During its gestation the document was downgraded from a 'plan' to a 'strategy', and it has been criticized for being 'long on aspiration, short on detail' (Mary Creagh MP, Chair of Commons Environmental Audit Committee). So just what policies does the Strategy set out, and will they deliver?

'As cheap as possible'

The overall aim of the Strategy is 'growing national income while cutting greenhouse gas (GHG) emissions', although it emphasizes that delivery will be at 'minimum cost to industry and consumers', i.e. always seeking the 'cheapest' option. Recent progress in cutting emissions in power and waste sectors is set against the challenges of achieving similar success in other sectors, particularly transport and space heating. For example, 32% of total UK emissions are from domestic and industrial heating. No wonder then that the Strategy will exploit 'flexibilities' in attempting to meet legal targets for emissions reductions under the Climate Change Act.

Below we summarise some of the Strategy's key proposals.

Housing

  • Extend the Energy Company Obligation (ECO) scheme until 2028 with £3.6 billion for upgrading 1 million homes.
  • Aim to upgrade all fuel-poor homes to at least a band C Energy Performance Certificate (EPC) by 2030.
  • 'As many homes as possible' to be EPC band C by 2035.
  • Private rented sector homes: 'as many as possible' to be EPC band C by 2030 'where practical, cost-effective and affordable'.
  • Consult on strengthening energy performance standards for new and existing homes, subject to the outcome of the review into fire safety following the Grenfell Tower fire.

Business

  • Consult on new building regulations and energy efficiency standards for commercial buildings, with the aim of achieving a 20% greater 'energy productivity' by 2030.
  • Industrial Energy Efficiency scheme to be set up.
  • Investment of up to £100 million in carbon capture usage and storage (CCUS).
  • Further support for the Energy Entrepreneur Fund.

Heating

  • Extend heat networks
  • Raise efficiency standards for new heating boilers and control devices.Tesla car
  • Reform the Renewable Heat Incentive (RHI) by investing £4.5 billion in low-carbon heat technologies such as heat pumps and biogas.
  • New innovation funds to develop low-carbon homes.
The sale of new petrol- or diesel-powered cars and vans is to end by 2040.
Soon we will all be driving electric cars, like this Tesla?

Transport

  • End the sale of new petrol- and diesel-powered cars and vans by 2040.
  • £1 billion support to encourage takeup of ultra-low-emission vehicles (ULEVs).
  • £80 million investment in the electric vehicle charging infrastructure.
  • £50 million for the Plug-InTaxi programme to discount price of new ULEV taxis.
  • £100 million for retrofit and new low-emission buses.
  • £1.2 million for promoting cycling and walking for shorter journeys.

smart meterSmart energy systems

  • Implement the 'smart systems plan', which seeks to integrate the multiple evolving sources of energy generation with energy storage and smart usage. Will receive £265 million investment.
  • Introduce a cap on standard variable energy tariffs.
  • Phase out unabated coal generation by 2025.
  • New nuclear power from Hinkley Point C plus £460 million support for nuclear R&D.
  • £177 million for renewables R&D.

Note that onshore wind doesn't get a mention, and solar is mentioned only in passing. An update on small-scale renewable is promised later in 2018.

Reactions to the Strategy

Perhaps the most influential criticism of the Strategy came from the Committee on Climate Change, the independent body that advises government on emissions targets. In a report published in January 2018 it pointed to a looming 'emissions gap' between the policies set out in the Strategy and the targets set by the 4th (2023-27) and 5th (2028-32) carbon budgets. The Committee observed that without 'urgent action' to firm up existing policies and identify additional measures' the UK is set to miss its legally binding targets.

'Emissions gap'

Further concerns were expressed by the Commons Environmental Audit Committee in May 2018. This reported on a recent decline in low-carbon investment which is likely to jeopardise the government's ambitions to deliver 'clean growth' and confirmed that the Strategy would fail in meeting emissions targets.