CCC Report 2023: Oliver Lancaster, IGEM CEO responds to the latest report
These Progress Reports to Parliament from the CCC are quite sizable beasts; however, I’m reliably informed it’s not as big as last year. One thing that is on repeat each year, though, is that the Government keep getting a ticking off for lack of progress and the uncomfortably wide policy risks and gaps across impending carbon budgets – and rightly so. Their feet need to be held firmly to the proverbial fire. As I mention below, more attention needs giving to a consumer-centric, collaborative, multi-vector, more secure, whole energy system approach, with recognition, I’d suggest, that time has been lost and cumulative emissions will be gained in the continuing long and dizzy spell of siloed thinking and electri-fixation.
Momentary energy efficiency of using electricity from a turbine tip down to a domestic radiator seems to be given a wedge of attention rather than getting a grasp of the long-term total system cost. Analysis by Imperial College for the Carbon Trust (released May 2021) clearly shows the total system cost of heat decarbonisation using hydrogen is lower by between £11.7-18.8b/yr compared to full electrification. Their similar work for BEIS (released January 2023) tells the same story, but with hydrogen being lower cost by a narrower margin.
This Progress report is too big to condense and summarise as a published response in such a short space of time, but through leaning on all of the CCC’s bold key messages in the front end of their document, I’ve taken a little tour of what they say, interspersed with some reactive commentary…
I have to agree with the Climate Change Committee (CCC) that there is a lack of urgency in setting the policy framework. The intensity of action needed to achieve net zero can’t continue to be squeezed into a shorter timeframe through delay after delay. I believe that an economy-wide deployment of hydrogen as a choice for customers is key, since end users from industry, flexible power generation and transport are a located around homes and share the same gas network. This is something not particularly well understood across Government, Ofgem nor the CCC, although the CCC do suggest identifying hydrogen potential for regions of the country on a whole-systems and economy-wide basis, which is welcomed.
The report asks Government to clarify their position on the economy-wide priority of use-cases for hydrogen – in particular its potential to help manage peak demands for both heat and electricity, and its role in hybrid heating systems. However, the distributed nature of demand for hydrogen from clustered and unclustered industry and flexible power generation makes the economy-wide aspect important across a wide scale and geography, rather than across a ladder-like approach to hydrogen use cases.
I quite like the CCC’s phrase ‘pace should be prioritised over perfection’. This rings true with not yet having to be concerned with what capacity of different technologies are deployed – we’re not going to overbuild anything in too short a timeframe. Delivering quickly means we can learn quickly, optimise investment in different assets and channel the skills and resources to those areas that show the strongest signs of success.
For the government to stay firm on existing commitments and move to delivery will need, perhaps, a degree of flexibility. Being really honest, deploying 600,000 heat pumps per year by 2028 is likely to only be possible if hybrid heating systems make up a significant part of that number. Take-up of full heat pump systems has been embarrassingly below target and has been benefiting the wealthy, while the proposed Clean Heat Market Mechanism in its current form is destined to fail the UK and reward overseas manufacturers and jobs. When it comes to the Government’s hydrogen heating trials – holding firm on delivery seems to be their order of the day, but it’s going to need them to take the lead on public engagement and ensure the evidence is gathered to support them in making a decision on hydrogen in 2026. CCS commitments also need following through, which is key for at-scale low carbon hydrogen supply for industrial customers who are demanding its delivery to their doorstep. These are examples where the UK can retake a clear leadership role internationally and take the competitive advantage in exporting this knowledge and technology to other markets.
There certainly are immediate priority actions and policies needed in a range of areas; however, it seems that there’s perhaps an overreliance on a broad-brush expectation of electrification, where the practicality of going down that road on a pony with a solitary trick doesn’t seem to have been considered. More attention needs giving to a consumer-centric, collaborative, multi-vector, more secure, whole energy system approach, with recognition that time has been lost and cumulative emissions been gained in the long and dizzy spell of electri-fixation.
The report discusses developing demand-side and land use policies and how the Government’s current strategy has considerable delivery risks due to its over-reliance on specific technological solutions – some of which have not yet been deployed at scale. This, to me, clearly includes heat pumps. Note here that the Government have received four naughty red marks out of all four heat pump indicators. Deploying heat pumps at scale across an entire village and then town may highlight the serious challenge of this being a panacea, with the German Heat Hammer lesson being fresh in mind from the angle of taking away consumer choice. Behaviour change is possible and will happen, but to what degree? We are, after all, creatures of habit. We can definitely support people to implement low-carbon lifestyle choices, which is easier to do for home energy use when the ask isn’t too much for too long. Hence the opportunity for hybrid heating that the CCC keep referring to – which can exploit the flexibility and pre-heating benefits offered by heat pumps, but with long-term energy storage and ramp rate that comes through the ability to load shift to the boiler and gas system and avoid pushing too far on the downsides for the household or energy system.
Empowering and informing households and communities to make low-carbon choices is the right thing to do. The Climate Assembly UK provided a detailed understanding to participating citizens regarding how they could play their part in making the changes needed to achieve net zero. After being presented with all the facts, 82% supported hydrogen for home heating – very mildly ahead of heat pumps. A positive vision and leadership from Government about the societal changes required, with the all-important low carbon choices for the consumer backed by well-crafted long-term cross-party supported policy, should make this as easy, attractive and affordable as possible. Easier said than done, though – but where there’s will…
Planning policy needs radical reform to support Net Zero, but it’s not just about wind turbines – biomethane sites also get caught in the planning circle of doom, with anaerobic digestion getting the Government another naughty red mark against progress. And the narrative really does need to move on from needing wires to get wind energy from production to demand – both electrons and molecules with pipes and wires can work together to get us there most quickly and in a lowest system cost way. This seems to have been nicely introduced by the CCC in their report. Hopefully, the Future System Operator will have a trusty hand on the balanced tiller of transition for our infrastructure needs.
Expansion of fossil fuel production is not in line with net zero, and yet if we don’t expand our own sources, then others somewhere else in the world will push up the margins of production to meet our demand, such as shale derived LNG from the USA that comes with a far greater carbon intensity. Our own continental shelf could support the UK energy transition, perhaps through licence obligations, even though its reserves are dwindling. And if we have offshore platforms that are operationally net zero, and we tie up new gas production with CCS and hydrogen demand, then it can be delivered in line with a stringent net zero test, but with global goggles on. Though it is accepted, of course, that any gas produced will find a demand – is that such a bad thing in India, for example, where they’re massively increasing gas import capacity and growing their gas and electricity networks to improve the lives of many of its citizens, and developing green hydrogen to transition away from fossil fuels? Worldwide equity is a challenging piece to this puzzle.
The need for a framework to manage airport capacity is overdue, as the CCC point out, but we have noted at IGEM the trend towards airports seeking, and in some cases securing, hydrogen pipeline supply agreements to fuel future air travel – with much work in this area being carried out in the UK. Having both eyes open across airport capacity and jet zero progress will be interesting to watch and follow.
Helpfully, overall, the report reiterates a few key points to Government to act on in the near term:
- Mandate hydrogen-ready boilers as a no-regrets action.
- Take note of hybrid heating systems that are a solution with natural gas today and hydrogen (on-gas) and biofuels (off-gas) in the future, which is a message stemming from their ‘Hydrogen in a low-carbon economy’ report from 2018.
- Get on with low-regret electricity and hydrogen infrastructure investments that can proceed now – with activity around industrial clusters being candidate locations, but where current funding competitions are stalling potential for quicker progress by lengthy red tape and budget barriers.
We look forward to working with the Climate Change Committee as we set sail towards further analysis that’ll need doing soon for the 7th Carbon Budget, and working with IGEM members and industry colleagues across our sector to make more progress, provide sound evidence to support policy decisions, and to be ready for delivering action.