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The UK’s Air Pollution Plan – for the power sector, is it more than smoke and rear-view mirrors?

Written by Matthew Dolman, Senior Account Executive, Madano Energy Practice

The Government’s Draft Air Quality Plan has finally been published, just over a week after the UK’s High Court quashed an appeal to extend the deadline. Having tried to avoid publishing it until after the General Election, the Department for Transport (DfT) and Department for Environment, Food & Rural Affairs (DEFRA) published both the plan and a formal consultation earlier today (Friday 5th May 2017).

A long time coming, the plan is fairly weighted towards the transport sector, headline proposals including a potential scrappage scheme for diesel vehicles and further funding for developing hydrogen vehicles and infrastructure.

There’s also a clear emphasis on concerted action from devolved governments and local authorities, which will be required to consult on establishing ‘Clean Air Zone Frameworks’ and leading the way on reducing transport sector emissions in their respective local areas and regions. Ministers are clearly also banking on the UK’s R&D sector to deliver new technologies and solutions to help clean up the country’s air.

I’d argue that the Air Quality Plan is just as important for those in the power sector, because it carries significant implications for the Government’s overall energy strategy.

While the plan doesn’t have many concrete policy proposals for energy – DEFRA and the devolved governments will announce this year new measures to tackle emissions from generators and Medium Combustion Plants – there’s a clear move towards tapping into the national electricity grid as a way of decarbonising the energy used by transport. It commits to further decarbonising and electrifying public transport, the UK’s freight network, and even shipping.

The Government’s approach won’t be surprising for energy experts, who will remember last year’s Smart Power report, published by the National Infrastructure Commission. The Commission argued that the UK’s demand for electricity is set to increase massively as heat and transport shift away from using fossil fuels.

That’s all well and good, but it means more demand on electricity sourced from ultra-fast charging stations dotted across the country. So in trying to decarbonise the transport network, the Government is adding to the challenges for a power sector still largely reliant on carbon-intensive fossil fuels and inflexible baseload generation.

The implication is that the power sector will have to rapidly decarbonise if the UK has any hope of meeting its climate objectives – all while ensuring shrinking supply margins don’t endanger energy security or spike consumer bills, both being major priorities for the Department for Business, Energy and Industrial Strategy (BEIS).

Given the noises coming from the UK’s main political parties, reconciling these myriad challenges probably means:

  • Increasing reliance on natural gas, in place of aging coal-fired plants, due to be phased out by 2025.
  • Emphasis on new nuclear power – be it through large plants like Hinkley Point C or a fleet of more flexible small modular reactors (SMRs).
  • Further uptake of evermore cost-competitive renewable energy sources, following a trend towards distributed generation paired with energy storage and demand-side response (DSR).

I think it will be difficult for Ministers to sell this Air Quality Plan as part of a cohesive strategy. The document is clear that everyday activities like power generation and industrial activity cannot be reduced in order to improve air quality. It also states that “action to improve air quality must not be done at the expense of local businesses and residents”. And the Government’s Industrial Strategy Green Paper has already promised to review opportunities to reduce the cost of decarbonisation for power and industrial sectors.

I suspect experts across Government will now be scrabbling to develop an approach that lets them improve air quality and decarbonise transport and industry without kneecapping the power sector’s ongoing efforts to decarbonise or having a significant impact on the daily lives of ordinary voters.

Weaving this into the Industrial Strategy will be critical, but joined-up policy isn’t something UK Governments are renowned for, and a High Court battle to delay this latest consultation will hardly mitigate that perception.