HomeEmissions & EnvironmentUK releases Energy White Paper to map green recovery

UK releases Energy White Paper to map green recovery

The UK government has released its long-awaited Energy White Paper that sets out specific steps to cut emissions and create jobs in a ‘green industrial revolution’.

The White Paper outlines policies to shift away from fossil fuels, boost competition in the energy retail market and provide at least £6.7 billion ($9 billion) in support to the fuel poor and most vulnerable over the next six years.

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Business and Energy Secretary Alok Sharma said the White Paper “establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution”.

He added: “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”.

Alongside the Energy White Paper, the government has also confirmed that it is to enter negotiations with French energy giant EDF to begin the process of building Sizewell C nuclear power plant in the east of England.

Core parts of the Energy White Paper include:

  • Supporting up to 220,000 jobs in the next 10 years
  • Transforming the UK’s energy system from one that was historically based on fossil fuels to one that is fit for a net zero economy
  • Keeping bills affordable for consumers by making the energy retail market truly competitive
  • Generating emission-free electricity by 2050 with a trajectory that will see the UK overwhelmingly decarbonised in the 2030s
  • Establishing a UK Emissions Trading Scheme (UK ETS) from 1 January 2021 to replace the current EU ETS at the end of the Transition Period
  • Continuing to explore a range of financing options for new nuclear with developers including the Regulated Asset Base (RAB) funding model
  • Delivering ambitious electricity commitments through our world-beating commitment to deliver 40GW of offshore wind by 2030
  • Investing £1 billion in state-of-the-art carbon capture storage in four industrial clusters by 2030
  • Kick-starting the hydrogen economy by working with industry to aim for 5GW of production by 2030
  • Investing £1.3 billion to accelerate the rollout of charge points for electric vehicles in homes, streets and on motorways as well as up to £1 billion to support the electrification of cars
  • Supporting the lowest paid with their bills through a £6.7 billion package of measures that could save families in old inefficient homes up to £400
  • Moving away from fossil fuel boilers, helping to make people’s homes warmer, whilst keeping bills low
  • Supporting North Sea oil and gas transition for the people and communities most affected by the move away from oil and gas production

Kick-starting the process will be a series of consultations in spring 2021 to create the framework to introduce opt-in switching, consider reforms to the current roll-over tariff arrangements, and a call for evidence to begin a strategic dialogue between government, consumers and industry on affordability and fairness.

The UK ETS will promote cost-effective decarbonisation, allowing businesses to cut carbon where it is cheapest to do so. It will be the world’s first net zero carbon cap and trade market, and a crucial step towards achieving the UK’s target for net zero carbon emissions by 2050.

The scheme is more ambitious than the EU system it replaces – from day one the cap on emissions allowed within the system will be reduced by 5%, and we will consult in due course on how to align with net zero. This gives industry the certainty it needs to invest in low carbon technologies.

Industry reaction

Emma Pinchbeck, chief executive at Energy UK, said the White Paper “reveals the scale and opportunity of the energy transition”.

Emma Pinchbeck

“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. This is what the White Paper – and other publications over the next year – should provide”.

Rain Newton-Smith, chief economist at the Confederation of British Industry, 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”.

Hugh McNeal, chief executive at Renewable UK, said: “Today’s white paper provides greater clarity to the companies investing across the UK to deliver our net zero emissions target. Wind and renewable energy will be at the centre of our future energy system, providing the clean electricity and green hydrogen we need to decarbonise our economy…”

Kyle Martin, head of market insight at LCP said, says: “The Energy White Paper sets out policies for addressing some of the biggest challenges standing in the way of achieving net zero.

“The proposals for the power sector will allow big infrastructure projects such as new nuclear, Carbon Capture and Storage (CCS), hydrogen production facilities, and renewable generation to be developed and, most importantly, to attract private finance.

“LCP has estimated that to meet net zero by 2050 a total of £350 billion of investment will be required across power generation capacity alone. As such, it is crucial that the market framework delivers this investment at lowest cost.

“This investment in power assets needs to be done in conjunction with building out network capacity to transport energy around the country to where it is needed. Since January 1, 2020, Great Britain has turned down enough wind power to have powered over 800,000 homes for the whole year. Achieving Net Zero will mean ensuring we can use and store the renewable power we generate, and this will require co-ordination between Ofgem and BEIS to deliver whole system solutions.”

Mark Bartholomew, energy partner at law firm, Shakespeare Martineau, said: “The white paper champions a bold vision for the UK’s energy sector, not least the need to deliver affordability for consumers. There may be some scope for measures such as competitive tendering for on-shore network development – and greater competition in the energy retail sector – to help meet this goal.

“However, with policies around new nuclear development and decarbonised heat and transport carrying hefty price tags, it remains to be seen just how ‘affordable’ prices will stay once costs start mounting up.”

Pamela Largue
Pamela is a senior content creator and editor and has been a part of the Clarion content team for over seven years. She specializes in international power and energy-related content.