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Sam Hall: Net zero means energy security

Sam Hall, CEN Director

Far from net zero being dead, the target is here to stay. It is politically popular, economically sound, and the best route to energy security for the UK - that's before you consider the environmental arguments.

Throughout the energy crisis, climate change has remained one of the top five most important issues to voters, according to YouGov’s tracker poll. Opinion polls also regularly show that renewables are the most popular energy sources - well ahead of fossil fuels.

There’s also deep support for net zero within the Conservative Party. Last year’s summer leadership contest showed this, because, despite loud anti-net zero voices on the right, four of the last five candidates signed the CEN pledge, reaffirming their commitment to net zero by 2050.

Net zero is central to delivering three of the Prime Minister’s five priorities. Halving inflation necessitates bringing down energy bills. According to the Chancellor, this means building more cheap clean energy and improving energy efficiency. Growth will come from attracting investment into the industries of the future, including the technology and the services needed to reach net zero. And the Office for Budget Responsibility has found that a fast net zero transition is a much better outcome for the public finances than unchecked climate change or a slow net zero transition.

Support among Conservative MPs for net zero remains strong too. Chalking this up to political opportunism misses the point. Believing we have a duty to protect the environment for future generations is a deeply conservative instinct. That’s why the CEN caucus numbers around half the party’s backbenchers and why some of the most successful parliamentary campaigns in recent years have been on environmental topics, such as water quality and onshore wind.

The resilience of the net zero policy is because the economic and security case has been strengthened by Putin’s invasion of Ukraine. To apply economic pressure to the West, Putin constricted the supply of gas to Europe. Europe at the same time has sought to stop buying Russian gas, in order not to fund Putin’s illegal war. As a result gas prices have shot up.

There is no energy security with fossil fuel dependency. Even countries that are large net fossil fuel exporters, such as Australia and Norway, have seen gas prices rise. Fossil fuels are traded on a global market and so prices will always be affected by the actions of the autocrats who control the largest reserves.

The UK has its own oil and gas reserves under the North Sea, but there is much less than there used to be and the costs of production are high. The amount of shale gas under our feet that could be economically extracted is highly uncertain, but in any case governments have tested the political acceptability of fracking to destruction over the past decade.

Purely from an energy security perspective, homegrown renewables are the best prospect. There is huge potential for scaling up these technologies cost-effectively.

Ministers should confirm the planning block on English onshore wind is being lifted. They should mandate all new homes to have solar panels as standard, and put them on car parks and public buildings. They should speed up planning decisions for offshore wind, better prioritise grid connection applications, and authorise a huge increase in investment in new grid transmission infrastructure.

Yes, wind is intermittent and currently relies on gas back-up. But building less wind means we would need to burn expensive imported gas all the time, rather than only when the wind doesn’t blow. How can that be good for energy security and bills? A timely report by Public First last year showed that it’s not. They found the costs of a grid with 80% intermittent generation were lower than one based on gas, even when balancing costs were accounted for.

The international competitiveness argument long deployed against climate leadership has now been turned on its head. Net zero is not unilateral, but a goal that 90% of the world’s GDP is signed up to.

Some conventional jobs are at risk of disruption from the net zero transition, but these industries are changing across the world. Oil demand has already peaked according to bp. Demand for fossil fuels in the power sector has peaked. The way to save our industries is not to fight in vain against global trends, but double down on net zero, attract investment into the technologies of the future, and support companies and workers to transition.

The biggest risk to international competitiveness is in fact not embracing net zero, as Chris Skidmore demonstrated in his excellent review. With the USA subsidising green industries to the hilt and the EU likely to respond in kind, our main trading partners have set themselves irreversibly down the path to net zero and will increasingly demand similar action from their trading partners.

As one of the fastest decarbonising economies in the G20, the UK is well placed to thrive in this new world. But despite an impressive head start and some world-leading policies, such as the Contracts for Difference scheme, the UK now risks missing out on some of the net zero economic dividend due to our sclerotic planning system and lack of incentives for green investment in the tax system.

Claims of net zero’s demise are wide of the mark. The greater risk is not that efforts to decarbonise stall, but that we are squeezed out of new net zero industries by the world’s economic superpowers, who have responded to the Russian invasion of Ukraine and the need for greater self-sufficiency with a huge scale-up of clean technologies.

Ensuring we realise the UK’s early promise for leading the green industrial revolution should be a core mission of the new Department for Energy Security and Net Zero.


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