Political uncertainties risk derailing UK’s low-carbon ambitions

A major new report by the UK Energy Research Centre (UKERC) has warned that political uncertainties are damaging the UK's low-carbon ambitions and could prevent the UK from staying within its carbon budgets.

The UK remains committed to ambitious climate change targets. However, recent rises in energy prices, the impact of the 2008 financial crisis and heightened concerns about energy security have challenged the government's commitment to these targets.

The report "UK Energy Strategies Under Uncertainty" features contributions from more than thirty of Britain's leading academic experts on energy, and identifies the key uncertainties facing the UK's planned low carbon transition, as well as recommending strategies to tackle these uncertainties.

Professor Jim Watson, Research Director of the UK Energy Research Centre and one of the lead authors of the report, said: "For the last decade energy policy in the UK has been an increasingly delicate balancing act between reducing emissions, security and affordability."

"Policymakers are right to be sensitive to the financial pressures facing the public and businesses, but action to relieve these pressures shouldn't come at the cost of progress towards a low-carbon economy. Current uncertainties about the direction of UK energy policy run the very real risk of making energy less affordable, less secure and less sustainable in the long-term," he adds.

The report explores the factors that are likely to affect the achievement of emissions reductions across the energy system; from the adoption of electric vehicles, to the transformation of heat networks and the flow of finance for low carbon power stations. It also considers uncertainties that could have more wide-ranging impacts, particularly those relating to public attitudes, environmental impacts and natural resources.

The report recommends that the government should expand energy efficiency programmes, particularly for the use of heat in buildings. Energy efficiency is among the most effective ways to help consumers reduce their bills, especially when fossil fuel prices are high.

In addition, the report finds that concerns of an investment 'gap' are overstated; there is no shortage of capital but changes to policy frameworks, market structures and business models may be required to attract that capital to the UK power sector. The Competition and Markets Authority inquiry into the 'Big 6' utilities is an important opportunity to consider the need for further market reforms.

"Raising the billions of pounds needed to fund the UK's transition to a low-carbon economy will be challenging, but is achievable," says Dr Rob Gross, Director of the Centre for Energy Policy and Technology at Imperial College London and a co-author of the report.

"Most low-carbon projects rely heavily on existing utility companies for funding but these companies are facing multiple pressures on balance sheets and a key challenge for policymakers is to create the conditions that either allow utilities to raise the finance needed by themselves or permit new forms of project finance, in order to attract sources of international capital into the sector," he adds.

Much broader engagement with the public will also be essential. Rather than seeking to persuade people to accept particular pre-determined technologies, engagement should involve the public in decisions about what combinations of technologies should be prioritised.

The report concludes that more attention should be paid to public concerns about the structure of the energy market, and who should pay for new investments that need to be made. This could persuade the public to accept less desirable aspects of system change (e.g. some continued fossil fuel use) if there is confidence that the full range of concerns are being considered, and there is a clear long-term vision for change.

More information:
UK Energy Research Centre
58 Prince's Gate
Exhibition Road
London SW7 2PG
+44 (0) 207 594 1573
www.ukerc.ac.uk

1. To interview Prof Jim Watson or Dr Rob Gross, please contact Dr Matthew Aylott, Communications Officer (email: m.aylott@ukerc.ac.uk /tel: +44 (0) 207 594 1573) at the UK Energy Research Centre.

2. The full report “UK Energy Strategies Under Uncertainty” can be downloaded from the UKERC website: www.ukerc.ac.uk/support/tiki-d … file.php?fileId=3620.

About the UK Energy Research Centre (UKERC)

The UK Energy Research Centre carries out world-class research into sustainable future energy systems. It is the hub of UK energy research and the gateway between the UK and the international energy research communities. Our interdisciplinary, whole systems research informs UK policy development and research strategy.

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