UK climate change targets at risk without 'rapid progress' on decarbonising heat and transport, says expert

Specialist in commercial energy contracts Lindsay Edwards of Pinsent Masons, the law firm behind Out-Law.com, said a new report by Scottish Renewables was to be welcomed because it highlighted the current shortcomings on decarbonising heat and transport in the UK.

Edwards said: "UK policy on renewable energy generation has developed greatly over the last decade, and yielded considerable results: according to the Scottish Renewables report renewable sources account for 15% of UK electricity. In contrast, relatively little progress has been made on decarbonising heat and transport in the UK, and policies to support this vital part of the UK’s move to a lower carbon economy are lacking." 

"The Scottish Renewables report highlights that while heat accounts for 46% of UK energy demand, only 4.9% of total heat demand was renewable in 2014, for example. Rapid progress will need to be made to decarbonise both heat and transport if the UK is to meet its binding climate reduction targets and make real progress towards a low carbon future," she said.

In its new briefing paper, Scottish Renewables called on the government to develop a new energy innovation strategy. The strategy would help "guide" the funding commitment the government made in its Autumn Statement and Spending Review announcement last year, it said. The Treasury said it would double, to £500 million, the level of funding for the "innovation programme" run by the Department of Energy and Climate Change (DECC) over the next five years.

The new strategy should focus on six areas, Scottish Renewables said, including low-carbon heat and on bringing together different elements of the UK's energy system.

To decarbonise the heat sector, new technologies need to be developed, deployed on a "large-scale" basis and integrated into the "wider energy system", Scottish Renewables said.

"Bringing together different elements of our energy system will allow us to be ‘smarter’ and drive efficiencies, increase security and reduce costs," it said. "Integrating our heat, transport and electricity sectors will be fundamental to tackling the energy trilemma, and developing new technologies and methods will be essential."

The energy innovation strategy should also focus on moving forward with the development of wave and tidal energy initiatives, commercialisation of floating offshore wind and making the UK's energy network more flexible, Scottish Renewables. There should also be emphasis on supporting the development of new energy storage technologies, it said.

"Storage technologies enable increased renewables capacity (storing their output at times of low demand), prevent or delay the need for costly network upgrades, and provide a number of ancillary services to the grid such as frequency response," Scottish Renewables said. "Small-scale devices empower communities and consumers, and deploying energy storage delivers security of supply. The global market for large-scale energy storage has been estimated at almost £20 billion by 2022 and the UK could be a major player in this."

Scottish Renewables said opportunities for public-private partnerships should be explored and also called on the government to conduct a review into whether the existing tax credits system sufficiently encourages investment into energy-related research and development. It backed the creation of a new "innovation fund" to help companies pilot and test energy innovations, as well as engage in "demonstration scale projects". The fund could also provide "route to market support", it said. Long-term "revenue support structures" should also be developed to "enable innovative technologies to scale-up and operate commercially", it said.

Scottish Renewables also said that DECC and the Department for Business, Innovation and Skills should work with UK energy regulator Ofgem to "facilitate the transition to a more flexible system" of regulation that supports innovation in the market.

In a blog published alongside the briefing paper, Scottish Renewables policy officer Hannah Smith said that a smart energy system is considered by "many energy innovators" to be one "where decarbonised electricity, heat and transport networks work together". She said "disruptive technologies" as well as "pioneering grid management initiatives" are needed.

"With the right sorts of collaboration, aligning the work of research bodies, and directing funds at the areas set to bring the most benefit, ‘organic’ innovation ideas can be mobilised to reach the end goal," Smith said. "At a time when our energy system is undergoing transformative change, this is a lesson industry and government must heed. The Department of Energy and Climate change committed to double its energy innovation spend in the UK government’s November 2015 Spending Review – a move Scottish Renewables welcomes. But a coordinated and well-directed approach is required if we are to get ithe most out of every pound spent."