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06

Political risk threatening decarbonisation of UK energy sector

Open-access content 5th July 2017

Providing reliable energy in a way that keeps emissions and prices down is ranked as the highest policy priority for the next government by a group of UK energy professionals.

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However, they say that failure to retain existing EU energy and climate laws, close ties to the single energy market, and easy access to skilled workers, put this at risk as Brexit negotiations get under way.

Responding to a survey by Energy Institute (EI), 64% of the experts believe that energy efficiency is key to seizing the economic advantages available in shifting to a low-carbon economy, while they also said it carries the least investment risk.

"The benefits of energy efficiency stack up for emission reduction, energy security, industrial growth and affordability," EI vice president, Steve Holliday, said.

"The potential is there for significant industrial benefit and emission reduction at least cost to consumers and taxpayers. Sound policy making should not be drowned out by Brexit, or other political upheavals."

It was found that the energy professionals are sceptical about the likelihood of the UK meeting its legally binding emissions reduction targets, while nearly eight out of ten believe the country will fall short of meeting the fifth carbon budget.

This requires carbon emissions to be 57% lower than 1990 levels by 2030, with the experts urging the government to develop a clear clean growth plan to meet the budget as it sets out its industrial strategy.

"Ministers need to bring forward a credible clean growth plan to demonstrate how they intend to course-correct the UK's emission reduction efforts," EI president, professor Jim Skea, said.

"On the basis of current policies, the fifth carbon budget is seen by energy professionals as elusive."

The professionals were also asked separately about president Donald Trump pulling the US out of the Paris agreement, with almost a quarter believing it represents a significant threat to keeping global temperature rises below 2°C.

However, the majority of respondents believe that this is surmountable if US action continues at state level, and federal support is reinstated under a future administration.

In addition, they stressed the need for policies to deliver flexible, decentralised, integrated energy systems worldwide, reducing emissions from heat through efficiency improvements, and developing low-carbon heat sources.


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This article appeared in our June 2017 issue of The Actuary.
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