A kink in the road: UK’s U-turn on net zero targets

The measures reflect growing concerns over the financial and political implications of net-zero as well as electoral pressure to reevaluate climate pledges. Prime Minister Rishi Sunak has argued that the UK can ease its targets, citing the nation's remarkable achievement of the fastest reduction in greenhouse gas emissions among all G7 countries. However, the Labour is emphasizing the importance of accelerating electric vehicle adoption despite these milestones. Let’s take a closer look. 

Sunak’s pragmatic approach

These are the key policy changes that Sunak announced:

• The 2030 ban on the sale of new internal combustion engine (ICE) vehicles will be pushed back from 2030 to 2035
• The ban on the sale of oil, LPG and new coal heating for off-gas-grid homes will be pushed back from 2026 to 2035
• Planned regulations on minimum energy efficiency standards for rental properties were scrapped
• The process for carbon budgets will be changed

Arguing that the UK has already achieved the goal of the fastest reduction in greenhouse gas emissions in the G7, he believes it would be appropriate to slow down on some of the country’s key net zero policies, while retaining a steadfast committment to reaching net zero by 2050. He also claims that because the UK’s share of global emissions is currently less than 1%, now is the time to act down. In Sunak’s opinion he is removing unnecessary and heavy-handed measures in order to lift the burden on working people. His new approach can be broken down into four key aspects: 

• Pragmatic, proportionate and realistic
• Accountable to British public
• Meeting net-zero commitment
• Supporting British families

While these measures may temporarily ease the cost of living crisis for the UK’s middle class, in the long term, an investment in renewable infrastructure, combined with a heightened use of renewable energy resources, not only aligns with the net zero goal but also provides financial benefits.  

Leading in emissions reduction, lagging in infrastructure

One of the biggest hindrances to the UK's renewable energy progress is grid connectivity. Delays in grid expansion and modernization are most profoundly impacting sectors like transportation and heating,raising concerns about the rapid rate of adoption of electric vehicles (EVs). In order to overcome these challenges, grid infrastructure investments are crucial. For faster renewable grid connections, the Energy Networks Association (ENA) emphasizes the importance of the key components: innovation, flexibility, investment, and coordinated planning. 

Sunak highlights that regulatory barriers in particular need to be tackled, such as slow permitting processes. Initiatives are being put in place to expedite grid connections and manage the Transmission Entry Capacity (TEC) register more efficiently. These delays pose a significant challenge for small-scale installations, impacting their competitiveness in the renewables market. Updating battery storage models and utilizing flexibility markets are essential to address these issues, alongside significant investment in grid infrastructure. Only then will UK’s power system be prepped and ready for net zero emissions!

Harnessing the potential of renewables

Despite slowing down net zero goals, the UK is currently witnessing  remarkable growth in the adoption of solar power – photovoltaic (PV) installations grew by 115% from 2021 to 2022, and now 2023 is expected to set a new record. This increase is largely due to solar power’s cost-effectiveness, a key factor when concerns about rising energy costs and the need to tackle climate change are at the height of public consciousness. In fact, the average domestic energy bill in the UK increased by a massive 72% from 2021 to reach £2,294 in 2022. Solar power empowers end users to take matters into their own hands and reduce their energy bill by producing energy themselves. At the same time, it is a cornerstone of reducing the UK’s reliance on fossil fuels.

Solar power alone, however, is not enough. Fossil-fuel-powered assets, namely gas boilers and ICE vehicles, must also be electrified. Octopus Energy, a British energy company leading the energy transition recently introduced the Cosy 6 heat pump, a 6 kW residential version designed to adapt to the needs of standard UK homes. It offers various pricing options to ensure accessibility for a wide spectrum of consumers, from covering installation costs to complete funding. The boiler upgrade scheme covers part of the upfront investment costs of replacing a fossil fuel heating system with a heat pump or biomass boiler. Such initiatives have allowed heat pump sales in the UK to boom in recent years, growing by 40% from 2021 to 2022. 

“The UK is on track for its strongest year ever for certified small-scale renewable technology installations.”

On top of this, batteries and electric vehicles are also seeing record installation rates. Batteries are breaking new installation records month after month, while electric vehicles experienced 40% year-on-year growth in 2022. MCS CEO, Ian Rippin, told SolarPower Portal, in 2023 “the UK is on track for its strongest year ever for certified small-scale renewable technology installations.” 

Taking a long-term view

Investing in smart renewable energy technologies offers the highest cost-savings potential for companies and consumers across the UK in the long-term. The government should therefore be focusing on regulation that improves standards, simplifies permitting processes and modernizes grid infrastructure to continue the momentum of clean technology adoption. Encouraging smart functionality is another crucial aspect to minimize energy systems costs and emissions and maximize efficiency and user control. Measures, such as the Electric Vehicle Smart Charging Action Plan, are important steps in the right direction, as this could cut consumers’ annual energy bills by up to £1,000. However, such initiatives should also be employed across other fields, to encourage smarter homes across the board. Home energy management systems (HEMS) are crucial here.

With the right technology, companies can increase customer value and unlock new revenue streams, while also ensuring that the UK remains a leader in the energy transition.

According to gridX Senior Account Executive, Ronan de la Gournerie, “companies can also take matters into their own hands by adopting cutting-edge technology and empowering their customers. End users want the power to produe their own energy, and monitor and control energy flows across their household. With the right technology, companies can increase customer value and unlock new revenue streams, while also ensuring that the UK remains a leader in the energy transition.”

If you are interested in unlocking the huge potential of surging clean energy assets in the UK with home energy management systems, visit us from October 17-19 at the “Solar & Storage Live 2023” in Birmingham on booth A14. Book a meeting with Ronan now.