A “tsunami” of action and policy is required to turn the government’s bold green energy aspirations into business models that can attract investment, the boss of National Grid has stated.
Speaking during a panel debate on the net-zero transition at the CBI annual conference on Wednesday (26 November), chief executive John Pettigrew said the government needs to get on with providing the framework for business models in areas like carbon, capture and storage (CCS) and hydrogen.
“We need to think about putting the right business models in place. This is really important, there isn’t business model to invest in at the moment. We need to see a clear regulatory framework to enable that early investment.
“We need to see a tsunami of action and policy now: commitments are fine, but we now need to see it turn into action,” he said.
Pettigrew’s concerns about the lack of detail on green energy business models were echoed by CBI director general Tony Danker.
“The politicians are betting the show on the green economy, but we don’t have clarity about how exactly that will work.”
Meanwhile, Hydrogen UK – the newly formed trade body that has replaced the government’s Hydrogen Taskforce – similarly urged minister to kickstart the large-scale production of low-carbon hydrogen by make a business model available to producers by mid-2022s.
In a report published on Thursday to mark its launch, Hydrogen UK said the government should implement the Contracts for Difference-style support mechanism identified as its preferred option in its Hydrogen Strategy in August 2020.
The report said: “It is vital that momentum is maintained, and the business models are made available by mid-2022 at the latest. Without business models there will be no confidence from investors and public and private finance will be impossible to access.”
It said the government should also stimulate demand for hydrogen by developing “detailed and distinct” policy and regulatory frameworks to create markets in end-use sectors and establish mechanisms to support hydrogen distribution and storage infrastructure.
In its response to the government’s Hydrogen Strategy, Renewables UK has called for separate pots of funding for blue hydrogen, produced by reforming methane and capturing the emissions, and green hydrogen, produced by electrolysing water using renewable power.
The trade association renewed calls for minister to set a target of deploying 5GW of electrolyser capacity by 2030.