Energy industry survey shows concern over policy gaps

Energy efficiency has been cited as the “biggest missed opportunity of the last decade” in a report released today by the Energy Institute.

The Energy Barometer 2020 is an annual survey based on responses from more than 350 UK professionals selected to represent views from across the sector and is the first since the adoption of the net zero 2050 target, as well as onset of the coronavirus pandemic.

Almost three quarters (70 per cent) of UK energy professionals believe the government is not doing enough to set the trajectory towards net zero, while almost 90 per cent say the UK is currently off track for net zero by 2050.

More than half of respondents do not expect the UK to meet its 2030 target of a 57 per cent cut in greenhouse gas emissions between 2028-2032 on the basis of current policies.

Energy efficiency is seen as the foremost option for plugging the emissions reduction gap for the 2030 target at least cost, and more respondents singled out retrofits of existing housing stock than any other action for a resilient recovery.

The report found that Covid-19 is unsurprisingly identified as one of the biggest challenges facing the industry this year, eclipsing the previous years’ preoccupation with Brexit.

Four in five respondents agree with the Committee on Climate Change’s principles for a resilient recovery, including the need to create green industries and jobs.

Respondents are split however on whether Covid will overall hasten the transition to net zero (38 per cent) or hinder it (33 per cent).

Very few expect energy demand, passenger journeys, industrial activity and emissions to rebound to beyond pre-pandemic levels. Most foresee them remaining subdued for an extended period.

Respondents also called for urgent decisions in low-carbon heat and transport as well as carbon capture, utilisation and storage (CCUS) to deliver the 2050 target. They said the first steps should include increasing research and development funding for low-carbon aviation fuels, incentivising hydrogen heavy goods vehicles, incentivising heat pumps and hydrogen-ready boilers, and funding pilot and demonstration CCUS projects in industrial clusters and on power stations.

While a third of respondents’ own organisations have already publicly committed to a net zero target, two thirds do not believe the energy industry itself is doing enough.

Two-thirds also cite “citizen pressure” as the leading factor, alongside emission reduction targets, in driving the low-carbon transition. However, 38 per cent see insufficient behaviour change by consumers as the greatest barrier to achieving net zero.

Energy Institute members believe the most important actions government can take to empower individuals to make the necessary changes towards net zero are investment in low carbon infrastructure and making low carbon products and services less expensive, for instance via subsidies.

To this end the government has this week announced a £3 billion investment for environmental measures as part of the economic recovery. Of this £2 billion has been earmarked for a Green Homes Grant offering vouchers of up to £5,000 to help homeowners improve their property’s energy efficiency.

Steve Holliday, Energy Institute president and former National Grid chief executive, said: “Our members from all walks of energy are crystal clear on two big takeaways for ministers and industry leaders in this year’s Energy Barometer. First, despite progress so far in decarbonising electricity, the UK is way off track for getting to net zero by 2050. More ambitious policies are needed and fast.

“Second, there’s an appeal for the UK to turn the discontinuity caused by the pandemic into the moment we get real about the climate threat, the shape of our future economy and our responsibility to the world.”

Robert Gross, Energy Institute council member and UK Energy Research Centre director, said: “There is sound advice here for ministers looking to stimulate Britain’s economy in a way that averts future risk.

“Most immediately, the economic, environmental and social co-benefits of upgrading our existing housing stock have never been clearer. But nor can we afford to delay bold decisions on low-carbon heat and transport which are essential for the trajectory to net zero.”

Chris Stark, chief executive of the Committee on Climate Change, said: “The overwhelming support from energy professionals for a resilient recovery from Covid-19 should give ministers confidence to act. Decisions in the coming months will shape our economic recovery – and bend the path of future UK emissions.

“The dissatisfaction of energy professionals about current policies for net zero is a frustration we share. This is the year to put that right, as the world’s gaze falls on the UK, in the presidency of the next UN climate summit in Glasgow, 2021.”