Energy sector and climate change: Ensuring resilience in a low carbon future
In the UK, we’re making progress towards our Net Zero emissions by 2050 target. However, the next stage of decarbonisation will require a step change in the rate of emissions reduction. Read on for our four key considerations to ensuring resilience in a low carbon future.
How can we ensure resilience in a low-carbon future?
The UK has legally committed to achieving Net Zero emissions across its economy by 2050. Since 1990, the UK has reduced its emissions by 50%, an excellent achievement across several parliaments. To date, this has been achieved mostly through industrial offshoring, improved gas boiler efficiency and the decarbonisation of power, with the last coal-fired power station due to close at the end of September 2024.
At JBA we have identified 8 priority sectors in the transition to Net Zero; Solar, Biomethane, Battery Storage, Nuclear (including SMR), CCS and Hydrogen, Critical Minerals, Power distribution and Offshore wind. The next stage of decarbonisation will require a step change in the rate of emissions reduction and an increasingly interventionalist approach to home heating, transport and industry.
There are four key considerations to ensure resilience in a low-carbon future. Read on as Steve Thompsett, our Head of Water Management, and Charles McAllister, Energy Lead, discuss each in more detail.
Maximising UK energy production and supply chain opportunities
Energy in the UK is commonly described as a ‘trilemma’, that is the sustainability, security and affordability of energy. The ‘unlocking’ of the UK economy after the COVID-19 pandemic and the Russian invasion of Ukraine highlighted the economic, environmental, social and geopolitical risks of continued reliance on fossil fuels imports. In effect, these events revealed that the trilemma had not been addressed and that the UK energy system was not resilient to this shock, due to its significant import dependency, resulting in double-digit inflation and the requirement for the state to introduce an energy price guarantee to protect families.
Reliance on imported energy be it oil, gas, coal or electricity exposes the UK to shocks from international events. UK government policy stance on planning and permitting should be geared towards maximising UK energy production, thermal and electric, and sourcing the required products and skills domestically. Locally sourced products and employees/contractors evidence that the transition to Net Zero will maximise the economic benefits to regions which may lose revenue streams from sectors at risk from decarbonisation policies.
Minimising the offshoring of industry and ensuring a just transition for workers
Whilst the UK has indeed decarbonised its ‘territorial’ emissions by 50% since 1990, this fact doesn’t paint a comprehensive story. What must also be factored in are the UK’s ‘consumption’ emissions.
Territorial emissions include emissions that occur within the land and water boundaries of the UK, whilst consumption emissions include these emissions plus emissions embedded in the products imported into the country. In 2021, UK territorial emissions were 421 million tonnes CO2e. However, when the emissions associated with imported goods are accounted for, UK emissions are 705 million tonnes CO2e - 67% higher than typically reported.
Industrial offshoring poses a risk to the UK’s credibility as a climate leader as well as a risk to the workforces of industries exposed to ‘carbon leakage’ as it is commonly known. The sectors exposed to industrial offshoring, employ hundreds of thousands of people across the UK. Government policy needs to ensure that the decarbonisation of the economy happens in concert with a just transition for its workers. One credible policy to achieve this is a ‘carbon border adjustment mechanism’ which the new UK government has expressed support for in its manifesto.
Trade-offs with technology choices must be well understood and balanced
There is broad expert and political consensus that new energy infrastructure is essential, not a choice. With any new development, there will be important knock-on effects and considerations to take into account. 80% of the UK population lives on 7% of the land, so there is room for development, but site selection is critical. Intermittent energy resources such as wind and solar are essential to meet net zero. However, their relatively low energy densities mean large capacity additions are required, and this will have land use implications for carbon-rich peat bogs as well as for flora and fauna.
One issue of sensitivity is the location of solar farms on agricultural land. JBA take the view that energy security and food security must go hand in hand, and as such has developed an Agrivoltaics strategy, where JBA works with landowners to integrate solar into a farm business in such a way that the land can be both farmed and used for low carbon power generation.
JBA also sees great scope in the adoption of biomethane production, where waste agricultural material can be used to produce gaseous fuel, as a key opportunity for agricultural revenue diversification whilst minimising negative impacts on the broader farming business.
Given the scarcity of water availability in certain areas of the country, energy developers should pay close attention to site selection and should engage early with the water sector to ensure that water availability is not a limiting factor in the energy sector’s growth.
There are no silver bullets in the transition to Net Zero emissions, and the positive outcomes as well as negative implications of choices must be well understood by policymakers at a national and local level.
Delivering national interests whilst balancing local impacts
It is critical that political promises about energy cost reductions are demonstrated, and that deliverables from Government investment are evidenced to the public. Net Zero cannot be ‘imposed’ on the public or there will be backlash, especially at a household level on matters such as home heating which is of material political sensitivity.
That being said, the devolution of decision-making on energy production to local communities poses risks, such as that of NIMBYism. National Grid has stated that the UK will need to build seven times as much infrastructure by 2030 as it has done for the previous 32 years, and it is a certainty that some developments will be met with local resistance. To ensure that the public is part of the transition to Net Zero, local communities which host energy infrastructure must share in the benefits of the development. Many UK energy sectors have community benefit funds which allocate financial shares of revenue to local communities.
