The Energy Transition | 'Green Day' and the NIC Infrastructure Progress Review

This week we look at updates to the government's Net Zero Strategy and Green Finance Strategy as part of "Green Day", the findings of the National Infrastructure Commission's (NIC) annual Infrastructure Progress Review, and more.

"Powering Up Britain": news from the UK government's "Green Day"

Thursday 30 March saw the release of the UK government's updated Net Zero Strategy "Powering Up Britain", as well as an update on its Green Finance Strategy "Mobilising Green Investment". The manifestos highlight the government's plans on how it is to achieve its goal of reaching net zero carbon emissions by 2050.

The plan outlines a range of strategies and measures that will be implemented to help minimise the country's environmental impact while transforming the economy. These measures include expanding renewable energy projects, a proposed mandate for electric vehicles, retrofitting homes for energy efficiency and investing in innovative green technologies. The government has highlighted the funding that has been made available for various green initiatives, including £240 million for hydrogen projects, £160 million for floating off-shore wind. The government also gave further details on the £20 billion funding for carbon capture and storage, which was announced as part of the spring Budget.

For further information on these announcements, see our Insight which breaks down the government announcements by topic and provides a timeline of when the different policies are expected to be implemented. See also our Insight on the Green Finance Strategy, which highlights the key aspects of the strategy for the financial services industry. For further information on the key energy announcements from the spring Budget, see our article on the Budget.

NIC report highlights the impact of planning delays on the energy transition

The National Infrastructure Commission (NIC) has published its annual Infrastructure Progress Review, which assesses the government's progress towards its objectives concerning the delivery of major infrastructure projects.

The report identifies a number of areas of positive progress, including the government's efforts to increase renewable energy generation. 17GW of low carbon generation is due to commence before 2027, and £100 billion of funding has been ringfenced for economic infrastructure up to 2025.

However, the report concludes that some major infrastructure objectives “stutter further just as the need for acceleration has heightened," and raises a number of specific areas of concern. These include the following:

• The rate at which public electric vehicle charging devices are installed will need to accelerate to meet the government’s target of at least 300,000 being installed by 2030.
• The rate of heat pump installation will need to accelerate if the government is to meet its target of 600,000 heat pumps to be installed each year by 2028. Only around 55,000 heat pumps were installed in 2021.
• The length of time taken for infrastructure projects to obtain planning consent is increasing. In order to achieve sufficient deployment of renewable generation to achieve the decarbonisation of the electricity system, a fivefold increase on current rates is required.

The report concludes that, for the government to meet its infrastructure objectives, "we need a change of gear in infrastructure policy.” The report sets out a number of recommendations on how this can be achieved including more consistency from the government in terms of policy and key projects, a focus on "fewer, but bigger and better interventions from central government", updates to the energy National Policy Statements, and increased capacity across the planning system.

Elexon to remain in industry ownership

In July 2022, Ofgem and the UK government held a joint consultation to consider the future ownership of Elexon. Elexon was established in 2000 as a not-for-profit with the role of overseeing the strategic operation and day-to-day management of the Balancing and Settlement Code (BSC).

Following the close of the consultation in September 2022, the government and Ofgem have announced that the Elexon will remain in industry ownership. The option to move the company to public ownership will remain as a temporary fallback option. It has also been announced that shares in Elexon will initially be transferred to the 13 largest BSC funding parties. These policies are to be implemented through license and code changes.

A spokesperson from Elexon stated that, “[t]here was widespread support among Balancing and Settlement Code stakeholders for retaining the industry ownership model for Elexon. We look forward to working with government, Ofgem and the industry to transition smoothly to the new arrangements.”

Enfinium to provide the UK's first carbon capture rail link

Enfinium, a UK energy-from-waste (EfW) company, has signed a Memorandum of Understanding with Navigator Terminals to develop the country's first "Rail to Zero" carbon capture rail corridor.

The corridor will connect the Ferrybridge EfW plant in West Yorkshire with Navigator's storage facilities in Teesside. The plan is to transport the captured carbon using the East Coast Main Line at quieter periods, to avoid any impact to passenger services. It is estimated that once the technology is fitted at the Ferrybridge EfW site, around 700,000 tonnes of carbon emissions will be captured and stored each year. Enfinium hope that Ferrybridge (one of the UK's largest EfW plants) can become carbon negative as a result of the project by removing more carbon dioxide from the atmosphere than it releases.

It is also hoped that the development of the rail freight link will benefit other companies looking to use alternative transportation and storage solutions for their own Carbon Capture and Storage. Jason Hornsby, CEO of Navigator Terminals commented that the rail link "can prove the concept of carbon transportation by rail opening up huge potential for further decarbonisation of British industry". 

This article was written with the assistance of Sophie Myatt and David Herron, Trainee Solicitors.