Written by Kira Scharwey, Account Director, Madano Energy
Everyone seems fairly excited. The long-awaited Clean Growth Strategy has finally been published, almost a year late. And it’s getting praise more often than not, with most reviews calling it “ambitious”, despite everyone’s low expectations.
It’s definitely more ambitious than Government’s previous policies in these areas, and I welcome the rather large shift in Conservative mentality from “green crap” to truly embracing the vast opportunities around clean growth.
But is it going to help us achieve what it’s hoping to, or is it just a positive direction that will end up falling flat? And is it really “ambitious” to change a ‘plan’ to a ‘strategy’ at the last minute?
As a whole, the vision is compelling. When you start looking more closely at its parts, there are some noticeable gaps, and a whole lot of repetition.
In most areas of the strategy, giving little detail on how this will all work in practice leaves a lot of room for shirking promises down the line. And in some cases, a focus on the long game, rather than aiming to benefit from being industry-leaders, is a missed opportunity.
For example, I’m pleased to see a renewed focus on Carbon Capture and Storage (CCS), but Government also seems to be ignoring a lot of work that has been completed to date in the UK and advocating for more research and innovation when its real barrier to deployment is financing. Plenty of caveats have been weaved in, namely, “…subject to cost reduction…” and “with the option of revising our deployment path accordingly”, which sow a seed of doubt in Government’s long-term commitment.
Onshore wind is barely mentioned in the plan, as if Government is washing their hands of it.
And not to mention that we will still be short of meeting the Fifth Carbon Budget as the Clean Growth Strategy won’t put us on track to meet our 2023-2027 legally binding emissions reduction targets.
Challenges for implementation
Considering Government has had to put so much resource and focus on Brexit, it’s not really a surprise that they haven’t had the capacity to go as far as some might have hoped. But considering it’s almost a year delayed, some sectors are still much further behind than they should be, and BEIS will hardly have more resources in the next few years to make much progress in all of these areas. Having an ambitious plan in this climate risks setting themselves up for failure.
Implications for clients
But from a client perspective, there is plenty of opportunity to help shape how this is implemented and increase its chances of success.
Organisations should be using the time between now and the Autumn Budget, as well as the release of the Industrial Strategy white paper, to share their expertise with Government and ensure their perspectives are heard. For example, around the Sector Deal for offshore wind.
As Government has made clear, there are many competing priorities for funding that will be making their case over the next few months, but there’s only so much money to go around. Most areas of the report are focused on cost reduction, so communicating well with a compelling proposition around this theme will be key.
Summary of key areas of the Clean Growth Strategy
Nuclear – nuclear is not a major feature of the Clean Growth Strategy, which makes no mention of technologies such as small modular reactors (SMRs). Further detail on the Government’s plans for advanced nuclear technologies is expected later this year.
Renewables – the Government stresses that many types of renewable generation are able to stand without subsidy, likely an attempt to capitalise on continuing cost reductions in the sector. No new detail is provided on future support for technologies such as tidal power. Ministers seem to hold the view that innovation can continue to deliver substantial benefits across the sector.
Carbon Capture, Usage and Storage (CCUS) – despite CCS being back on Government’s agenda, there is likely to be concern by the Government’s focus on research and innovation, instead of providing more support for deployment and commercialisation. The Government’s failure to set out plans for transportation and storage (T&S) of carbon will also be viewed negatively.
Smart energy systems – ministers have increasingly focused on the need to deploy energy management solutions at scale in order to meet future supply and demand challenges. It is likely that much of this work will be linked to the Government’s efforts to boost uptake of electric vehicles.
Energy efficiency – it is likely that the Government’s focus on energy efficiency will be welcomed alongside wider efforts to decarbonise industry and the UK’s housing stock.
Transport – the Government’s efforts to decarbonise transport will directly affect the power sector due to the high reliance on electrification. It is likely that a significant uptake in generating capacity and energy management technology will be needed to achieve this. The Government is also focusing on developing new fuels which are less carbon intensive than existing sources. But little we didn’t know already here.
Oil and gas – no mention of fracking – a big departure from the Conservative Manifesto only a few short months ago. Damian Carrington of The Guardian says that this omission signals “the beginning of the end of the fossil fuel age”.
Green finance – although the Government makes much of its commitment to funding clean energy, it is likely to face criticism in sectors where this funding is seen as a reallocation of previously announced funding pots. In many sectors, such as CCS, it remains unclear whether specific projects will be funded from within this allocation or whether further funding will be provided in future.
Madano works with clients across the energy sector, including renewables and CCS.