Long-awaited Energy White Paper set to be unleashed alongside plan to establish domestic UK emissions trading scheme from 2021
The government has unveiled further details of its hotly-anticipated vision for the UK's net zero transition, signalling a major overhaul of Britain's energy market to scale up renewables, clean heating, nuclear, energy efficiency, carbon capture, and hydrogen technologies over the coming decade and beyond.
The plan is detailed in the long-awaited Energy White Paper, which was published this morning, and sets out a wide-ranging strategy to support 220,000 new green jobs over the next 10 years and signals a "decisive and permanent shift away from our dependence on fossil fuels", according to Business Secretary Alok Sharma.
Trailing key pillars of the policy document this morning, the government said the "ambitious" plans would help to keep bills affordable for consumers as the UK transitions to net zero emissions by 2050, based on a trajectory that would deliver "overwhelmingly decarbonised power in the 2030s".
Overall, it said the strategy would cut UK carbon emissions by 230 million metric tonnes over the next decade, the equivalent to permanently removing 7.5 million petrol cars from the roads.
As part of the announcement, the government confirmed it is entering into negotiations with French energy giant EDF over proposals to build a major nuclear power station at Sizewell in Suffolk, which would follow the firm's existing Hinkley Point C project currently under construction in Somerset.
The talks mark the first step towards potentially giving the project the green light, although the government stressed a final decision would be subject to reaching "a value for money deal and all other relevant approvals". It said it was considering a range of financing options for the nuclear project, including a Regulated Asset Base model, as well as potentially providing direct government finance during construction.
Meanwhile, the government also announced plans to set up a £385m Advanced Nuclear Fund to support the development of Small Modular Reactors, as well as research and development into more advanced nuclear technologies.
The support for nuclear technologies and the prospect of a new nuclear power plant being approved is likely to prove the most controversial component of the White Paper with campaigners quick to condemn the plans this morning, citing long standing concerns about the cost of new nuclear projects. Writing on Twitter, Green Party MP Caroline Lucas said: "When renewables costs are plummeting, it's madness to waste £20bn on another nuclear white elephant It will leave consumers with higher bills, destroy important habitats & unlikely to be online till late 2030s."
However, nuclear advocates maintain that a new plant at Sizewell could emulate Hinkley Point C in providing another seven per cent of the UK's electricity mix from a zero emission source, helping to replace the current fleet of reactors that is due to retire over the next 10 to 15 years.
The government today also confirmed plans to set up a domestic Emissions Trading Scheme (ETS) from 1 January 2021, ending months of uncertainty surrounding how CO2 from major power plants and industrial facilities would be regulated after Britain exits the EU's ETS at the turn of the year.
The UK ETS will be the "world's first" net zero carbon cap-and-trade market when it replaces the EU's current ETS at the end of the Brexit transition period, the government said, and will from day one reduce the cap on CO2 emissions within the market by five per cent "giving industry the certainty it needs to invest in low carbon technologies". Further consultation with industry over how to align the new ETS with the UK's 2050 net zero goal is expected to follow in due course.
It gives businesses little over a fortnight to prepare for the overhaul of emissions regulations, but the government insisted having already legislated for the ETS, the technical system underpinning the scheme was now in its final stages of development and was on track to be ready on time.
Greener means of heating homes and businesses also feature heavily in the Energy White Paper, with the government this morning stating that it intends to move away from fossil fuel boilers "whilst keeping bills low" by ensuring all newly installed heating systems are low carbon, or low carbon-ready, by the mid-2030s.
It comes ahead of a flurry of new policy consultations planned for next year, including several aimed at creating a framework to introduce opt-in switching to help consumers secure the cheapest deals from energy suppliers, and to reform current roll-over tariff arrangements, the government said.
Elsewhere, the White Paper reiterated plans for new funding previously announced in the government's Ten Point Plan for a Green Industrial Revolution last month, including £1.3bn of funding for electric vehicle charge points, £500m to help scale up 5GW of green hydrogen production, £1bn of public investment in four industrial carbon capture and storage clusters across the UK, and support for the UK's 40GW offshore wind capacity target for 2030.
Sharma - who is also President of next year's crucial COP26 UN climate summit being hosted by the UK in Glasgow next year - said the Energy White Paper plans unveiled today would "put our country at the forefront of the global green industrial revolution".
"Through a major programme of investment and reform, we are determined to both decarbonise our economy in the most cost-effective way, while creating new sunrise industries and revitalising our industrial heartlands that will support new green jobs for generations to come," he said. "At every step of the way, we will place affordability and fairness at the heart of our reforms - unleashing a wave of competition so consumers get the best deals possible on their bills, while protecting the vulnerable and fuel poor with additional financial support."
He added: "With this long-term plan, we are turning climate ambition into climate action - putting the UK firmly on the course to net zero to end our contribution to climate change as we build back greener."
The government has been under significant pressure to publish the Energy White Paper, which has been delayed numerous times over the past two years as Whitehall has grappled with Brexit planning, last year's General Election, and the Covid-19 crisis.
A raft of further net zero policy plans are also expected in 2021 as the government seeks to cement its position as a global climate leader ahead of the summit in Glasgow next year. The policy moves follow the government's recent ramping-up of its 2030 climate target to cut emissions by 68 per cent below 1990 levels, which came ahead of its announcement over the weekend that it will end overseas financing of fossil fuel projects and its formal submission of a new Nationally Determined Contribution (NDC) to the UN under the Paris Agreement.
Industry figures broadly welcomed today's announcements, ahead of a closer analysis of the detailed policy plans.
Rain Newton-Smith, chief economist at the Confederation of British Industry, said the Energy White Paper was "an important next step in our plans to reach our net zero emissions target".
"Action is needed now, and the welcome focus on job creation around the country, developing sustainable low-carbon industries, and ensuring the transition is fair for consumers will all help us achieve our ambitious climate goals," she said. "Business stands ready to deliver the investment and innovation needed to turn ambition into reality, and the proposals outlined in the Energy White Paper will give business further confidence to deliver new infrastructure, including electric vehicle charging, renewable power generation and low carbon upgrades to people's homes."
Emma Pinchbeck, chief executive of trade body Energy UK, added that the policy document "reveals the scale and opportunity of the energy transition".
"The energy industry will do our bit to innovate, supporting our customers so that they benefit from the net zero transition and investing in the green infrastructure we need - but clear policies from government help us do that," she said. "This is what the White Paper - and other publications over the next year - should provide."