The foundations for a successful low carbon industrial strategy

James Murray
The foundations for a successful low carbon industrial strategy

Stephen Heidari-Robinson's vision for meeting the UK's carbon targets is not without flaws, but with some tweaks it could provide the basis for a highly effective decarbonisation plan

Has Stephen Heidari-Robinson provided a sneak peak of the government's imminent and hugely important decarbonisation plan?

The obvious answer is no. Heidari-Robinson left his post as energy and environment adviser at Number 10 during those turbulent few days following the shock referendum result and is at pains to point out his recent essay providing a blueprint for how to meet the UK's 2030 carbon targets offers nothing more than his personal views. There is a new team in charge and as a result the government's energy and climate change plans could change beyond all recognition in the coming months, as the surprise review of Hinkley Point underlined.

However, it is also true Heidari-Robinson's essay is the work of someone who, up until a few weeks ago, was closely involved in developing the government's emerging decarbonisation plan. Moreover, there is plenty of circumstantial evidence to suggest his blueprint was, until David Cameron packed his bags, on track to provide the foundations for the strategy that is still due to be published this autumn. The bulk of energy and climate policy decisions taken since last year's election are in line with Heidari-Robinson's vision for a decarbonisation push dominated by offshore wind, new nuclear, a new low carbon heat strategy, and electric cars, and offset by a curtailing of support for other renewables and carbon capture and storage (CCS).

This is not the plan we will see in the autumn, but it is likely to provide the foundations for the plan the new teams at Number 10, Number 11 and BEIS will now build on. There will no doubt be some changes in the coming months with the question of what happens to the Cameron government's new nuclear plans the most headline-grabbing decision awaiting Theresa May. But too dramatic a departure from Heidari-Robinson's blueprint would require a series of industry-denting, job-destroying U-turns that would almost certainly put the UK's carbon targets under extreme pressure.

A lot to praise

Which prompts the next question, do the proposals put forward by Heidari-Robinson constitute a good plan or not?

As Green Alliance's Dustin Benton observed, "there's a lot to praise in Stephen Heidari-Robinson's piece". If the eventual decarbonisation plan retains much of the former adviser's blueprint then there will be plenty for both green businesses and the wider economy to celebrate.

The cementing of the UK's position as the world's leading offshore wind market; the ambitious plans for EV adoption; the promise of new policies for green heat, energy efficiency, and waste; the proposals for a national tree-planting programme; the desire for a green UK common agricultural policy (CAP) - taken together these policies would slash emissions, create hundreds of thousands of jobs, and mobilise billions of pounds of low carbon investment.

Heidari-Robinson also offers one of the best defences yet of the government's controversial nuclear programme, although he is careful to draw a distinction between the programme as a whole and the increasingly beleaguered Hinkley Point project.

Like a Russian oligarch's dinner, the Hinkley deal looks like an over-priced mess, guaranteed to bring on indigestion. As such there are plenty of compelling grounds for a re-think. But, as Heidari-Robinson points out, if the May government ditches the wider new nuclear programme then it is extremely likely gas-fired generation will increase. "Whatever your own personal views of nuclear, if the UK government takes the decision not to go ahead with a new nuclear programme, it would be a sign that it has abandoned the plan to hit our carbon reduction targets and that other considerations have proved more important," he writes.

Many environmentalists will reject this argument, insisting increasingly low cost renewables coupled with energy storage, energy efficiency, and smart grid technologies can plug the gap created by the abandonment of new nuclear projects. There is evidence, backed by the government itself, to suggest this optimistic vision could soon come to pass.

Personally, I really hope the green groups are right, but there are reasons for caution. First, Theresa May's early backing for fracking suggests she might just as easily be convinced to fill any Hinkley-sized hole in the energy mix with gas as with renewables (and deal with the implications for carbon targets later). Secondly, green groups are right to point out that EDF's EPR technology has never been built successfully anywhere, but nor has a renewables-storage-smart grid system on the scale that would be required. Thirdly, replacing coal and gas with renewables over the next 13 and a half years will be hard enough, replacing the fifth of power we get from nuclear as well would be a gargantuan task - even the slightest slip in the pace of renewables deployment would see emissions rise as gas would be forced to fill the energy gap.

New nuclear necessity

Speaking to BusinessGreen, Heidari-Robinson explained the rationale for new nuclear in a way the government should have been using for years. We are going to be doing a lot more renewables and smart technology to push coal and then gas off the grid, he explained, but we need some new nuclear simply to replace the reactors that are going to retire in the coming years. Shelving talk of a nuclear renaissance (and fracking boom) that fuelled fears renewables could be sidelined and focusing instead on a narrower and pragmatic nuclear replacement programme could have helped to take a lot of the heat out of an increasingly ill-tempered debate.

Thankfully for UK carbon emissions, like injury time when Manchester United are playing, ageing nuclear power plants have a habit of seeing their game time extended again and again. Consequently, there may be time for the May government to revisit the financial excesses and security concerns of Hinkley Point without breaching our carbon targets in the late 2020s, especially if renewables and energy efficiency measures continue to make rapid progress. There is a strong argument for looking again at whether it makes sense to pay over the odds for other governments to deliver a project when the UK government can borrow at such historically low rates.

Equally, canning the increasingly politically toxic Hinkley project may not necessarily spell disaster for the UK's decarbonisation efforts. But Heidari-Robinson's warning that axing the entire new nuclear programme would inevitably lead to higher carbon emissions over the next few decades needs to be taken extremely seriously. There is a danger the UK could emulate Germany's recent decarbonisation challenges by accident, whereby a failure to replace at least some nuclear capacity only serves to extend the life of fossil fuels. Again, I hope these concerns prove unfounded and that renewables and smart tech can ride to the rescue, but until the evidence base for a 100 per cent renewables-powered system becomes even more compelling the risk of inadvertently throwing a life line to fossil fuels has to be properly considered.

However, if Heidari-Robinson's blueprint offers encouragement to large swathes of the green economy there are also sizeable flaws that it is to be hoped the new team at BEIS will address.

Chief among these is his brutal dismissal of CCS. Rejecting CCS on cost grounds misunderstands what the demonstration projects were designed to achieve and why CCS is so important to long term decarbonisation efforts. Costs would have come down, potentially quite quickly, once the first projects had been built, while the emergence of a CCS industry in the UK would have helped pave the way for deep decarbonisation.

Post-2030 vision

Heidari-Robinson counters that the CCS projects the government cancelled last autumn would have made a negligible contribution to meeting the UK's 2030 carbon target. But this serves to highlight another flaw in his proposed strategy: it is too narrowly focused on meeting the 2030 goal and does not pay enough attention to the need to lay groundwork for a net zero emission economy.

We will need CCS from the 2030s onwards to decarbonise heavy industry, ensure any back up thermal power plants that remain on the grid are zero carbon, and offer a route towards negative emissions technologies. Similarly, Heidari-Robinson's assertion we need fracking in the UK to provide gas as we transition to a lower carbon energy system glosses over the difficulty of building an entire new fossil fuel industry only to close it within less than 20 years. The risk with CCS is that if we don't start building an industry now we won't have it when we need it. The risk with fracking is that if we do build a fracking industry now we won't be able to close it when we need to.

CCS-sceptics will argue if we need the technology later this century we can just buy it in once the Chinese or Americans have invented lower cost carbon capture technology. But leaving aside the lost industrial opportunity this would represent, one industry source rejects this proposal with the not unreasonable observation that you can't buy in your geology. We will need a CCS industry and it makes sense to start building one.

Encouragingly, Heidari-Robinson offers an olive branch to the CCS industry with his praise for early stage projects to capture carbon for use in industrial process. It is to be hoped the new government both revives plans for a UK CCS industry and builds on the previous Cameron administration's apparent interest in carbon capture and utilisation.

The second major flaw is the relaxed, some might say naïve, tone with which Heidari-Robinson sketches out his vision for a revamped heat and energy efficiency strategy. His calls for a raft of policies - including a new carbon saving obligation for Ofgem, better standards for new homes, domestic energy efficiency spending, boiler standards, and biomass conversions for rural homes - glosses over the fact many of these policies have been proposed, or even tried, in the past, only to fall foul of political or budgetary concerns.

An ambitious new energy efficiency and green heat strategy is urgently needed, but it was under Heidari-Robinson's old boss that tougher building energy efficiency standards were scrapped, the Green Deal turned into an unmitigated failure, and budgets for domestic energy efficiency and renewable heat programmes were cut. Again, it is to be hoped a Treasury that can borrow at such low rates sees the merits in energy saving infrastructure spending that delivers long term health and productivity gains, just as it is to be hoped Conservative backbenchers resist the temptation to lambast sensible building and product energy efficiency standards as 'red tape'. But a major political battle will have to be won to deliver the policies that are needed.

Justified optimism?

Unfortunately, it is not just with relation to heating that the essay invites questions about the level of optimism that underpins its assumptions.

One analyst told me a calculation they had done of Heidari-Robinson's proposed emission reduction mix suggested that, depending on the baselines used, the decarbonisation he was positing would still come up short against the Fifth Carbon Budget's target. But even if the maths are unimpeachable, delivering the emission cuts proposed would require an unprecedently fast take up of electric vehicles from a very low base, a strict adherence to a very ambitious timetable for offshore wind and new nuclear development (currently Hinkley Point is stalled and four major offshore wind projects in Scotland are subject to a court battle), a step change in emissions reductions from agriculture, the successful overhaul of a waste strategy that has seen recycling rates remain static in recent years, and the introduction of a volunteer-led national tree-planting programme that sounds a lot like David Cameron's unlamented Big Society.

Like many environmentalists, I would love to see each and every one of these developments occur over the next decade or so. But it takes a pretty heroic assumption to believe they all will. Which is the main reasons I would take issue with Heidari-Robinson's dismissal of CCS and his suggestion support for pretty much every renewable technology bar offshore wind should halt. The government's eventual decarbonisation plan will need some contingency in the system to give itself options when the inevitable delays or market disruptions occur. Moreover, it would be unwise to effectively completely block the development of certain clean technologies when the global energy market remains so fluid.

Keeping options open

Keeping the door open for onshore wind, solar, marine, and biomass may require some additional funding (although it cannot be said often enough that wind and solar are now among the cheapest energy technologies available and costs keep falling), but it would give the UK options as it faces the complex challenge of deep decarbonisation.

Heidari-Robinson not unreasonably points out a reversal of the government's position on onshore wind looks politically unlikely, even if it would help ease pressure on energy bills. But the case for a rethink remains compelling, especially given the fact the man who was privately said to be the biggest opponent of onshore wind around the Cabinet table has been replaced at Number 10 by a woman renowned for pragmatism.

Finally, Heidari-Robinson's criticism of the green community for failing to shower the government with sufficient praise for its emission reduction efforts merits a response. He is right that green NGOs and business groups need to find a better balance between welcoming positive developments and offering constructive criticism of retrograde policy steps. It is easy to see why Cameron and many of his green, modernising colleagues grew so frustrated.

But the previous government has to take some of the blame for any breakdown in relations. The Prime Minister all too rarely made the case for the green economy, preferring to stay silent while some of his own ministers attacked the sector. Job and investment-killing policy U-turns that were completely unmandated by anything as democratic as manifesto commitments were forced through with scant warning and little explanation. Ministerial praise was lavished on unsustainable fossil fuel projects and high carbon infrastructure. Cuts to support mechanisms were presented not as an attempt to find a more cost effective way to build on the phenomenal and welcome success of a renewables sector that had grown even faster than expected, but as a Daily Mail-friendly assault on hated wind and solar farms. How were green business leaders supposed to react? Put out the bunting to celebrate the job losses and writedowns they were facing? Write a thank you letter to the government for characterising them as countryside defiling subsidy junkies? Pop the champagne corks as the cost of capital soared for clean energy projects Ministers had previously said they wanted?

Strong foundations

And yet, if the plan the Cameron team was working on is flawed in places, there is still a huge amount to admire. Heidari-Robinson's proposals should provide strong foundations for the new government's decarbonisation plan and, crucially, they appear well-suited to the current political climate.

What the essay provides is a loose framework for the kind of low carbon industrial strategy the new team at BEIS has been tasked with delivering. Add in a revival for CCS and a wider spectrum of renewables and you have the basis for a credible, long term, job creating, increasingly cost-effective, export-enabling industrial strategy that promises to boost the UK's competitiveness at the same time as bolstering its climate resilience and improving quality of life for its citizens.

Crucially, there is also a lot here for Conservative MPs and voters to like. The focus on air quality, desirable electric cars, tree planting, healthier communities, high skilled jobs, energy bill-saving measures, world-leading export-focused clean tech businesses, and a general sense of tech-enabled industrial optimism offers plenty of political ammunition with which to fight the inevitable overblown criticism about short term cost impacts. And that is without even mentioning the primary reason for decarbonisation: climate change.

Done right, a beefed up version of Heidari-Robinson's plan can successfully be sold, first to Theresa May and her team and then to the wider electorate and business community. After just under a year at Number 10, he has done everyone a huge favour by going public with his 'personal reflections'.

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