Energy and Utilities

The Energy Transition | BEIS publishes independent review of net zero

Published on 23rd Jan 2023

Welcome to our top picks of the latest energy regulatory and market developments in the UK's transition to net zero.

Electric charging points for cars

This week we look at Chris Skidmore's independent review of net zero, the UK government's launch of an action plan to deliver energy flexibility from electric vehicle charging, National Grid's successful 10 week trial of a hydrogen powered generator, and the latest round of the government's red diesel competition.

Chris Skidmore publishes net zero review

Mission Zero, ex-energy minister Chris Skidmore's review of net zero, was published on 13 January 2023. The review was commissioned in September 2022 to assess how the UK could better meet its net zero commitments. It looks at barriers to decarbonisation, but expresses a clear view throughout that the UK's net zero commitment creates a number of opportunities for businesses.

The report sets out recommendations for the government about how it can best reach its net zero targets. This includes a full-scale deployment of solar, including rooftop farms, as well as increased onshore wind deployment. The review also sets out the need for a clear plan for the decarbonisation of industry, which can be achieved through carbon capture, use and storage, and hydrogen technologies. By the end of the year, the review recommends there should be an ambitious 10 year delivery roadmap for scaling up hydrogen production. This would include delivering the hydrogen business model and confirming the funding envelope available for hydrogen revenue support. The relationship between local and central government must also be improved in order to unlock the planning system and increase the power given to local authorities and communities looking to act on net zero.

Policy suggestions include promoting cleaner, greener homes, including the introduction of legislation by 2033 which would require that all homes are sold with an EPC rating of C or above. Another suggestion is the implementation of a zero-emission vehicle mandate to apply from 2024, which will require manufacturers to sell a growing number of electric vehicles in the run up to 2035. It is also suggested that by 2024, the UK Emissions Trading Scheme (ETS) Authority should develop a pathway for a UK emissions trading scheme until 2040. The ETS allowances cap currently runs until 2030, but the Authority has now committed to making the cap net zero aligned.

The review identifies delay as being a key risk factor for net zero, which is exacerbated by weaknesses in the UK's investment environment such as skills shortages and inconsistent policy. Although there was an estimated £24 billion of investment into low carbon technologies in 2021, in order to facilitate further investment in research and development, the review recommends an overarching governmental financing strategy by the end of 2023, as well as a review of investment incentives and the faster delivery of the Green Jobs Taskforce. It also recommends that there is a robust approach to disclosure, standard setting and increasing green finance in order to make the UK a leading international green finance centre.

UK government launches action plan to deliver energy flexibility from EV charging

The UK government has launched an action plan to kick start the smart electric vehicle (EV) charging market, which focuses on three main actions:

  • Making smart charging affordable and convenient for consumers by working with industry to provide more information on smart chargers as well as producing a code of best practice in 2024.
  • Providing regulation and standards for ensuring safe goods in the smart charging market, including ensuring that charging points are secure and investigating any barriers to wide scale deployment.
  • Ensuring the energy system is ready to accommodate smart charging by looking into the costs and benefits of providing public smart chargers. This will include working with Distribution Network Operators to provide an efficient connection process.

Smart chargers offer consumers the opportunity to charge their EVs at times of the day when demand is lower (between the hours between 10pm and 8am). In doing so, consumers benefit from paying lower charging costs Often EV owners charge their vehicles overnight, so the government is hoping that it can encourage those owners to utilise the smart charging network.

The action plan sets out how charging infrastructure will be integrated into the energy system to ensure that generation and network assets are used in the most efficient way.

National Grid completes 10 week trial of hydrogen-powered generator

National Grid has completed a 10 week trial of a hydrogen-powered generator at its Deeside Centre for Innovation (DCI). The trial involved a GeoPura 250kw hydrogen power unit (HPU) which was installed at DCI. The generator was used to power low-voltage equipment for National Grid's innovation testing projects and site operations.

The HPU is able to produce up to 100kw in continuous operation mode and up to 250kw for 45 minutes using only green hydrogen.

At present diesel generators and batteries are used as a backup power source for cooling fans, pumps and lighting at DCI. These generators and batteries are rarely used (having a 1% chance of being used each year), however, on the occasions that they are, it is hoped that low carbon options could be a solution to reducing emissions. It is thought that using systems such as HPUs could prevent 500,000kg of carbon emissions.

Prem Ranjan, Test Engineer at DCI stated that “[t]he HPU has been tested for different load profiles including typical critical substation equipment. The trial results for electrical performance and environmental aspects along with hydrogen management at our substations will now be examined as viable zero-emission alternatives to diesel backup generators.

Government launches £32.5 million funding package to cut reliance on red diesel

The government has announced the launch of Phase 2 of the Red Diesel Replacement Competition to support greener alternatives to red diesel such as electrification and green hydrogen. Red diesel is type of a fossil fuel commonly used for off-road, heavy-duty vehicles and machinery, such as bulldozers and cranes. The competition aims to support industrial sectors such as construction, mining and quarrying with moving away from red diesel. 

Phase 1 of the competition provided £6.7 million of funding for feasibility and trials to 17 projects over 11 months. The recently announced £32.5 million funding package will support three to five demonstration projects up until March 2025. The government has provided examples of previous winners from Phase 1, including:

  • MAHLE Powertrain Ltd (Northampton), which, in partnership with the University of Nottingham and Clean Air Power, received £425,072 to build two prototype engines capable of running on ammonia and hydrogen, with the aim of providing a pathway for the sustainable use of heavy-duty engines.
  • CATAGEN Ltd (Belfast), which received £787,700 for two projects: an e-fuel generator to develop e-diesel, and a novel hydrogen compressor.
  • ULEMCo Ltd, (Liverpool) which, in partnership with Skanska and the Building Research Establishment, received £418,613 to develop and deploy a H2ICED combustion engine for onsite construction equipment - a world first in converting a piling machine (used in the construction industry) to run on hydrogen fuel.
  • Steamology Motion Ltd (Salisbury), which received £364,717 to build a prototype demonstrator of their high power, zero-emission steam turbine drivetrain, proving a viable red diesel engine replacement technology.

This article was written with the assistance of Saskia Zant-Boer and Hannah Wooderson, Trainee Solicitors.



* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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