As anticipation mounts ahead of the rescheduled COP26 climate summit taking place in Glasgow at the end of 2021, commitments by governments and businesses to the low carbon transition will be firmly in the spotlight throughout 2021.
Green jobs to fuel economic recovery
The financial impact of the pandemic presents what is seen as an unprecedented opportunity for governments to recalibrate economies by investing in low carbon sectors with the potential to create significant numbers of new jobs.
That potential was underlined by UK Prime Minister Boris Johnson with the launch of a ten-point plan for a green industrial revolution which he said will create and support up to 250,000 British jobs across clean energy, transport, nature and innovative technologies.
Research by the Institute for Public Policy Research believes the potential for low carbon jobs could be even greater, with the opportunity to create more than 200,000 jobs in energy efficiency alone by 2030, and 70,000 jobs in offshore wind as soon as 2023.
Although the continuing decline in the oil and gas sector is expected to lead to job losses in the North Sea, there are hopes that investment into clean energy could more than offset the decline of fossil fuels and see overall employment levels increase from the current position.
Expertise developed by major players in the oil and gas sector could play an important role in the development of infrastructure for new developments such as floating offshore wind projects and carbon capture usage and storage facilities. Steps to decarbonise heat will need gas engineers to be retrained to be able to service heat pumps or potentially install hydrogen boilers.
To capitalise on this potential, there will need to be a significant focus in the year ahead on agreeing to the detail of how the net-zero transition will happen, alongside training and reskilling programmes. Effective collaboration between government and industry groups coupled with well-targeted investment in training programmes have the potential to create a wave of stable, future-proof jobs and help accelerate the transition to net-zero.
Such an ambitious shift will also require a major push on training and investment to ensure installers have the necessary skills to fit and maintain heat pumps.
The potential role of green hydrogen to help heat properties will also be a focus and 2021 will see a world-leading trial getting underway in Scotland to fit free hydrogen boilers and cooking appliances to around 300 homes. Further steps to explore the potential for hydrogen to play a greater role in the UK’s energy system will come with the publication of the UK’s first national Hydrogen Strategy due to be published before COP26.
Domestic energy efficiency drive
The shift in working patterns brought about by COVID-19, which has led to increased domestic energy consumption, has further highlighted issues around energy efficiency across the UK’s housing stock.
Significant strides have been made in improving efficiency across commercial property in recent years, but with homes in the UK accounting for 20% of carbon emissions and 35% of energy consumption, improving fabric efficiency is a key challenge, particularly as heat pumps are deployed at scale to replace gas central heating.
In response, the UK Government has recently announced plans to extend the Green Homes Grant scheme that provides support towards the cost of installing energy-efficient improvements to homes. This is a welcome step, but the energy efficiency challenge is significant and will require further government and market action to achieve the required decarbonisation trajectory to net zero.
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One area likely to see more attention ahead is social housing and exploring ways to incentivise investment in energy efficiency measures, perhaps through mechanisms which enable both landlords and tenants to reap the rewards of investment in improvements.
Given the link between better quality housing and health, there are also potential benefits for the public purse in terms of reduced healthcare and social care costs. These are traditionally difficult to attribute, which will be a key hurdle to overcome in developing mechanisms to stimulate investment in energy efficiency.
The development of public/private financing initiatives focused on social housing efficiency could deliver significant benefits in terms of reducing carbon emissions, improving health outcomes and reducing costs to tenants.
Many large energy users are already benefitting from taking a more flexible approach to their consumption through developments such as demand-side response. The markets for distributed flexibility are expected to significantly increase to help the grid manage the growth in variable renewable generation. The year ahead could also pave the way for households to participate in flexibility markets at scale.
Development of new business models could enable domestic demand to be aggregated and traded on the flexibility markets, helping support a whole system approach to decarbonising the grid. The development of new standards could enable households to give third parties control of their appliances at agreed times to enable models to develop.
Roadmaps for accelerated EV rollout
With governments setting ambitious targets for the phasing out of new fossil-fuel powered cars, 2021 will need to see major progress in terms of preparing for the huge investment in infrastructure but also in the development of supportive policy and regulation.
The UK has recently brought forward its end-date for the sale of petrol and diesel cars to 2030 and the Irish Government has a target for a million electric vehicles (EVs) to be on the roads by 2030. In the UK, a delivery plan setting out key milestones to achieve the new phase out dates is expected to be published in 2021.
Although EVs are seeing rapid percentage gains in sales, it is from a very low base in terms of the overall market. With firm and stretching targets in place, a key issue now is how to scale up the infrastructure needed in a commercially viable way. Although there are already significant numbers of charging stations, they only meet the needs of a very small percentage of total travel demand. Such low utilisation poses a major challenge in terms of the commercial viability of future investments, which in turn creates uncertainty around the uptake of electric vehicles.
In the UK, the Competition and Markets Authority (CMA) will be carrying out a market study during 2021 into EV charging to ensure the sector works well for people now and in the future. The study will look at how to develop a competitive sector and attract the private investment needed and how to ensure people using electric vehicle charge points have confidence; they can get the best out of the service.
Steps to encourage greater take-up of EVs is part of a wider vision of the decarbonisation of transport in urban environments which will increasingly gain traction in 2021. A digitally integrated approach can optimise and accelerate the reduction in transport emissions. Intelligent transport networks will be able to predict demand and avoid disruption, making urban areas safer, healthier and more pleasant.
Although much of the current focus is on EVs, the decarbonisation of rail, aviation and marine will also need to see meaningful progress in 2021 to ensure net-zero ambitions are on track. The boom in cycling seen during lockdown also provides an ideal opportunity to further promote ‘active travel’ as part of wider transport strategies.
About the author
Matthew Knight, head of low carbon solutions at Gemserv.