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Can We Afford To Decarbonise The Energy Supply? The North Can't Afford Not To

01/03/2017 15:24

The Lords Economic Affairs committee have questioned whether we can afford to decarbonise. In the North we can't afford not to. Slowing the pace of decarbonisation now will damage a growing industry at a time when it is needed most.

Travel across the North of England by road or rail and its energy heritage is clear to see. The cooling towers which pepper the landscape and mark the North's historic role as the powerhouse of the nation sit alongside towering wind turbines, part of the fleet of clean technologies replacing the region, and UK's, declining fossil fuel capacity.

The North has been a key driver of these new renewable technologies. In 2015 the region generated almost half (48%) of the nation's renewable energy, but despite this, the Northern energy sector is at a cross road. In one direction it could be a world leader in low carbon energy generation and technology. Down the other, its capacity will fall as coal plants close not to be replaced by a new generation, leading to job losses and missed opportunities.

This is driven, as noted in the first report of the Northern Energy Taskforce, in part by a reliance on national energy policy, which at times has fostered a lack of confidence in low carbon investment and does not always allow the region to maximise the assets it has to offer.

This is particularly relevant given the publication last week of the House of Lords Economic Affairs Committee report on reforming the power market, in which the committee argues for the pace of decarbonisation to be slowed, downgrading it as a goal of energy policy. The report suggests that decarbonisation has been pursued at the expense of keeping energy costs low and ensuring the security of supply.

This recommendation is concerning given that the Government already appears to be wavering in its support for renewables, with Greg Clark suggesting that the Department for Business, Energy and Industrial Strategy will revisit subsidies and their impact on energy costs. It was particularly poignant that this was announced in the same week as the Scottish Government pledged to generate 50% of its power from renewables by 2030.

The impacts of such a policy change would be huge. The need to decarbonise the energy supply is absolutely essential and the failure to reduce the carbon emissions will be catastrophic. This should not be forgotten, undermined or trivialised and so of course, decarbonisation should remain a priority for energy policy.

Rather than a burden however, the prize for developing and refining the technologies which drive decarbonisation will be substantial. Given that this energy transition is a global one, the first mover advantage associated with new technologies which manage energy use, refine existing power generation, decarbonise existing resource intensive processes and find low carbon solutions to heating homes is massive. As is the opportunity to export these products, knowledge and skills something which, given the exit from the EU, is important now more than ever. So alongside dodgy environmental footings, a failure to drive decarbonisation flies in the face of the Government's plans to uncover and develop national industries as laid out in the Industrial Strategy Green Paper.

Already, a clear comparative advantage can be seen in the North. Our report has highlighted that the North is home to both the natural and industrial assets - such as plentiful wind, waste heat and hydrogen manufacturing - which would enable it to exploit new generation and the skills and research institution necessary to develop these.

Maximising the opportunities presented by these assets will not just benefit the North. Nationally, this will ensure the plentiful supply of low carbon energy and a renaissance industry at a time when it is needed most. But whilst the drive to power this industry exists in great quantities in the North, the region nonetheless needs a strong national framework and policy continuity. Were the Government to use the Lords' report as political cover to reduce support for renewable energy, they risk damaging what could be an industrial renaissance. Rather, Greg Clark and Department of Business, Energy and Industrial Strategy should recognise the green energy potential that lies in the North as an exemplar of what they are looking for in their industrial strategy consultation.

Ultimately, it would disastrous if at time when the Government is positioning the UK as about to make its way in the world as a great trading nation, short term thinking stymied one of its greatest industrial opportunities.

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