Energy efficiency is ‘biggest missed opportunity’

Energy efficiency is cited as the biggest missed opportunity of the last decade, according to the Energy Institute’s Energy Barometer 2020.

It is seen as the foremost option for plugging the emissions reduction gap for the 2030 target at least cost, and more respondents singled out retrofits of existing housing stock than any other action for a resilient recovery.

Britain’s energy professionals have added their voices to growing calls to ‘build back better’ post COVID-19, They fear that without immediate policy steps from the Government, the UK’s 2030 and 2050 greenhouse gas emission reduction targets will be missed; this could also undermine the UK’s credibility as the host of the COP26 discussions in Glasgow next November.

The annual survey is based on responses from more than 350 UK professionals selected to represent views from oil and gas through to renewables and energy efficiency. It is the first since the UK upped its ambition to net zero and the first to factor in the challenges and opportunities left in the wake of COVID-19 and the global lockdown. 

Steve Holliday EI president and former CEO of National Grid (pictured), said: “Our members from all walks of energy are crystal clear on two big takeaways for ministers and industry leaders in this year’s Energy Barometer. First, despite progress so far in decarbonising electricity, the UK is way off track for getting to net zero by 2050. More ambitious policies are needed and fast.

“Second, there’s an appeal for the UK to turn the discontinuity caused by the pandemic into the moment we get real about the climate threat, the shape of our future economy and our responsibility to the world.”

Chris Stark, chief executive of the Committee on Climate Change commented: “The dissatisfaction of energy professionals about current policies for net zero is a frustration we share. This is the year to put that right, as the world’s gaze falls on the UK, in the Presidency of the next UN climate summit in Glasgow, 2021.”

The COVID-19 pandemic is unsurprisingly identified as one of the biggest challenges facing the energy industry this year, eclipsing previous years’ preoccupation with Brexit.

Four in five respondents agree with the Committee on Climate Change’s principles for a resilient recovery, including that stimulus should be channelled into green industries and jobs, and support for emissions-intensive sectors should be contingent on action on climate change. 

Respondents are split on whether COVID-19 will overall hasten the transition to net zero (38 per cent) or hinder it (33 per cent). Very few expect energy demand, passenger journeys, industrial activity and emissions to rebound to beyond pre-pandemic levels, in fact most foresee them remaining subdued for an extended period.

Besides COVID-19, low-carbon energy, climate change and energy policy were the other dominant concerns identified by energy professionals this year. 

Respondents cite the growth of renewables and decline of coal in the electricity mix as the two stand-out emissions reduction successes of the last decade. This success is owed to falling costs and stable government policy, in the form of direct financial support and mandatory standards, respectively. But more than 70 per cent do not think the Government is now doing enough.

Right across the energy sector, UK professionals issue a warning about the current trajectory toward net zero by 2050 – we are currently off track, say nine in ten. More than half do not even expect the UK to meet its 2030 target (57 per cent cut in GHG emissions between 2028-2032), on the basis of current policies.

Respondents also prescribe urgent decisions now in low-carbon heat and transport, as well as CCUS, to deliver on net zero by 2050. The first steps should include increasing R&D funding for low-carbon aviation fuels, incentivising hydrogen heavy goods vehicles, incentivising heat pumps and hydrogen-ready boilers, and funding pilot and demonstration CCUS projects in industrial clusters and on power stations.

Galvanising increased emission reduction ambition from other countries is identified as the foremost challenge for the UK as host of COP26 in Glasgow. More respondents cite the importance of leading by example at home than any other factor in the UK retaining its credibility as a climate leader. 

Two-thirds cite citizen pressure as the leading factor, alongside emission reduction targets, driving the low-carbon transition. But pressure alone may not be enough: 38 per cent see insufficient behaviour change by consumers as the greatest barrier to achieving net zero. 

EI members believe the most important actions government can take to empower individuals to make the necessary changes towards net zero are investment in low-carbon infrastructure and making low-carbon products and services less expensive, for instance via subsidies.

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