Energy Transition: UK gears up for Green Industrial Revolution
Last week, the Prime Minister unveiled plans to start the Green Industrial Revolution in the UK, which encompasses clean energy, transport, nature and innovative technologies. According to the official announcement, the initiative “will mobilise £12 billion of government investment to create and support up to 250,000 highly-skilled green jobs in the UK, and spur over three times as much private sector investment by 2030.”
This is an ambitious and encouraging plan, showing the government’s commitment to sustainable growth and the transition into a green economy. The next decades will see flourishing activity in various sectors, as well as diversification of the economy.
The move into renewables has already started, as data from analysts EnAppSys showed that between January and March 2020, 45 percent of electricity generation in the UK came from renewable sources.
On top of governments’ commitments to carbon neutrality, it is important that the private sector joins the movement towards low-carbon industries, says Mark Carney, the UN special envoy for climate action and finance.
In an upcoming special #FinancialFox episode this week, we will be talking about the Green Industrial Revolution. An expert from award-winning energy consulting firm Cornwall Insight and a city analyst will discuss the energy transition, low-carbon targets in the oil & gas industry and what to expect from the green economy.
Oil & Gas sector pledges lower carbon footprint
A key part of the transition into the green economy is to reduce — and eventually abolish — reliance on fossil fuels such as oil and natural gas. However, this move cannot happen overnight.
The need for lower greenhouse emissions has called for a restructuring of the oil & gas industry. In recent developments, Oil & Gas UK, the UK’s upstream industry body announced its commitment to halving the sector’s greenhouse gas emissions by 2030, and to a further 90% by 2040.
Currently, the UK imports part of its oil usage, mainly from Norway. During the first months of 2020, more than 7 percent of power in the UK came from abroad. Locally sourced and produced oil can significantly reduce the industry’s carbon emissions by cutting transport and decreasing the need for imported energy sources.
Onshore assets are pivotal in this transition, as it is estimated that power generated at offshore platforms can be four to five times more CO2-intensive than energy from the national grid, accounting for 60 percent of the sector’s total carbon emissions.
Increase in new energy sources
One of the main points in the plan to decarbonise the economy concerns the diversification of UK power sources, specifically targeting three industries: wind, hydrogen and nuclear.
The UK is already a leading global player in the wind energy market. With the new plans, production of wind-powered energy is expected to quadruple in ten years, aiming to produce enough offshore wind to power every home in the country.
Hydrogen is also mentioned in the proposal. The aim is to produce 5GW of low-carbon hydrogen production capacity by 2030 for industry, transport, power and homes. To make this happen, the government is promising an investment of up to £500 million, including trialling the use of hydrogen for heating and cooking in homes. Of this funding, £240 million will go into new hydrogen production facilities.
Another source in this energy mix is nuclear. The plan sees a £525 million-investment to help develop large and smaller-scale nuclear plants, as well as advancing research into modular reactors.
Keep an eye out for our upcoming episode on #FinancialFox.
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