NET ZERO
WHY IT PAYS TO LOOK BACK WHEN LOOKING TO THE FUTURE OF THE ENERGY SECTOR npower Business Solutions’ head of flexibility services, Ben Spry, explains why taking a look back can help to plan the road to net zero.
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020 is proving to be a landmark year for energy. While it’s a time we will remember for many reasons – with Covid-19 resulting in shifting demand, an unprecedented coal-free spell and record low energy prices – it is also an opportunity to reflect and refocus. With the sector now focused on 2050 and the possible scenarios that could help the UK achieve its decarbonisation goals, we thought it would be interesting to revisit the predictions we made for 2020, back in 2011. Almost a decade ago, we worked with the Grantham Institute on Climate Change and the Environment at the London School of Economics to model four potential energy scenarios out to 2020. Now we are in 2020, we have looked back at the predictions we made then to assess if there were any lessons learned that could help shape the future of the sector. In a new report – The Future Report 2020 – we gathered the views of industry experts, including author of the original report, Professor Sam Fankhauser, Arjan Geveke from BEIS and Robert Buckley from Cornwall Insight to debate the technologies, investment and policy needed to reach net zero, and the role business will play. In the short to medium term, the experts agreed that while the immediate attention will be on the post-Covid-19 recovery – a time when ‘cash will be king’ – the focus should also be on
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using the green economy to stimulate this recovery, arguing that it is an opportunity for the government to use net zero by 2050 to accelerate the sustainability projects that will cement a more resilient economic future. Longer term – net zero by 2050 is the target all the contributors were focussed on. While they agreed that it was an ambitious target, all believed that it was possible if major strategic decisions around the investment in technologies, incentives for renewables and changes to the structure of the system are taken in the next five years. CCS, hydrogen, battery storage and electric vehicles were all cited as technologies that would make the biggest impact on the UK’s decarbonisation goals. Revisiting the 2011 report has been fascinating and taught us three very valuable lessons:
1. W E CAN NEVER PREDICT EVERYTHING We didn’t know that the resilience we started building in 2011, following the financial crash of 2008/9, would serve us so well in 2020. And, while many of the questions we raised a decade ago have now been answered, new challenges have emerged. There are some things that we know we don’t know yet – like the best way to effectively decarbonise heat, how the UK’s participation in the EU’s Emissions Trading Scheme (ETS) will work, and how societal changes caused by the coronavirus pandemic will shape energy consumption in the longer term. That’s why building greater resilience and being flexible enough to adapt are now more important than ever.
2. W E NEED TO STAY FOCUSED ON NET ZERO With uncertainty the most consistent feature of our social, political and economic landscape over the past decade, it’s more important than ever to stay focussed on key goals. And in the energy sector, the primary
ENERGY MANAGER MAGAZINE • JULY/AUGUST 2020
goal now is facilitating net zero. As we said earlier, many argue that a post-Covid recovery plan that has net zero at its heart will give us the best chance of securing long-term economic and environmental stability, whatever else the future throws at us. What’s clear is that energy – and how it’s procured and managed by businesses – will be central to achieving this.
3. B USINESSES HAVE A VITAL ROLE TO PLAY For this vision of a better energy future to become a reality, large industrial and corporate businesses will be required to play a key role. We recognised the importance of their role back in 2011, as well as our own responsibility to support them – and both remain crucial today. But what actions should businesses be taking? One of the messages from the Future Report 2011 that still rings true today advises: ‘The key is to understand and manage energy well’. For businesses in 2020, this will mean going further than energy efficiency and demand side response. It will mean setting ambitious internal decarbonisation goals and taking corporate social responsibility seriously. Energy strategy must become an integrated part of broader business strategies – influencing business culture and transforming operations right across the supply chain. Whatever the long term future brings, the next 12-24 months will be particularly crucial, as organisations focus on getting ‘back to business’ post-COVID-19. It is becoming clear that a green recovery plan – that puts net zero right at the heart of the UK’s future economic resiliency – and policy clarity are urgently needed. As we await the Energy White Paper later this year, this is an opportunity to accelerate the projects that will cement a stronger and more sustainable future both for businesses and wider society. To download a copy of The Future Report 2020: The Road to Net Zero visit www.energy-hq. co.uk/futurereport2020
