Bryt Insight August 2023

Bryt Energy
| 11th August 2023 | Bryt Insight
Businesses benefit from net zero Government funding
UK Government awarding new oil and gas licenses
Net zero transition more cost effective than relying on gas, says OBR
Resource efficiency key to ‘clean energy’ transition
UK nature’s recovery campaign
Spotlight on renewables

This summer, the impacts of climate change have been clear for us all to see. Southern Europe, China and the US have all experienced extreme heat waves, devastating wildfires have broken out across several countries, and record-breaking global temperatures have resulted in the hottest July on record1. In our oceans, the average global temperature record has been beaten for each of the last three months, and Antarctic sea ice is at a record low. Scientists have warned of the impacts the scale and pace of these changes could have on wildlife, food production, homes and health.

The unprecedented intensity of these events highlight the need for more urgent action. With the world’s media focused on the consequences of climate change, it’s time to use this attention to drive solutions forward. This month we take a look at some of the more encouraging news for business and beyond, in the world of energy and sustainability. Here’s what you need to know:

Businesses benefit from net zero Government funding

In the last month, the UK Government has awarded £80 million in funding for businesses to help them decarbonise and switch to low-carbon energy sources2. The funding supports projects across a range of industries, including food and drink, manufacturing and energy. It will see exciting innovations receive backing, including a hydrogen-heated cereal production process, thermal energy storage for low-carbon whisky distillation and renewable electricity-powered biscuit manufacturing.

Awards were given from across three separate schemes from the Government’s Net Zero Innovation Portfolio (NZIP). Set up in 2021, NZIP is a £1 billion fund with 10 pots of funding for Government priority areas, including offshore wind and new technologies, which will help the UK accelerate its journey towards net zero.

In the latest funding to be announced from the NZIP projects:

  • 13 businesses in heavy-industry sectors have received a total of £52.5 million from the Industrial Fuel Switching competition. This will support development of solutions to replace fossil fuel use with alternatives such as hydrogen or biofuels.
  • Five firms have been awarded a total of £21.2 million during phase 2 of the Hydrogen BECCS (bioenergy with carbon capture and storage) Innovation Programme. The projects selected help produce hydrogen from biomass and waste, such as sewage, with carbon capture.
  • 11 projects were given a total of £9.2 million through the Carbon Capture, Usage and Storage (CCUS) Innovation 2.0 competition, with proposals such as recycling carbon for fertiliser production.

Over the coming years, NZIP projects are set to move from concept stages to prototypes of winning projects and technologies. To find a list of NZIP schemes, including funding your business may be able to apply for, click here.

The good news continues, with UK energy regulator Ofgem approving £95.3 million funding for 10 energy network projects3 as part of its Strategic Innovation Fund. The programme has been set up to find and support innovative technologies which could accelerate the low-carbon transformation of gas and electricity networks.

Ofgem says the latest initiatives to receive backing have the “potential to be widely adopted” and cover:

  • Energy system integration, from flexibility services to better management of offshore wind generation
  • AI (artificial intelligence), which will help predict and prevent risks and faults in energy networks.

To find out more about the projects, click here.

The funding comes as 86% of organisations globally have said they plan to boost their investments in sustainability initiatives within the next year4. Honeywell’s Environmental Sustainability Index (ESI) also shows nearly three-quarters of respondents cited sustainability as their top priority – an encouraging sign, with so many businesses taking action to cut their emissions. You can download the report here.

UK Government awarding new oil and gas licenses

Another key story this month was the announcement that the UK Government will be awarding more than 100 new oil and gas licenses. Despite this being a push for energy independence, the United Nations, the International Energy Agency, and the Government’s own climate advisors (CCC)5 argue that investing in new oil and gas is incompatible with reaching net zero emissions.

For more commentary on this development, visit here.

Net zero transition more cost effective than relying on gas, says OBR

Completing the transition to net zero would be cheaper in the long run for the UK than continuing its dependence on gas at the current level, according to the Office for Budget Responsibility (OBR)6.

The OBR, which provides independent economic forecasts and analysis of public finances to the UK Government, says the UK is more exposed to sudden changes in global gas prices because it’s one of the most gas-dependent economies in Europe. Its latest Fiscal Risks and Sustainability report estimates that if reliance on gas remains unchanged, it could cost the UK between 2–3% of GDP annually. This would add 13% of GDP to public debt by 2050, over double the cost of completing the net zero transition by that year.

The report should help address concerns over the financial impact of the UK’s net zero policies. On top of this, the transition to renewables will also bring benefits such as improved air quality and fewer emissions compared to remaining reliant on gas.

Click here to read the full OBR report.

Resource efficiency key to ‘clean energy’ transition

The Energy Transitions Commission (ETC) has published a new report on the natural resources and materials needed to meet the needs of the energy transition7.

Findings show that, under a new net zero energy system, the water needed would account for only about 2% of total global annual water consumption. For context, the figure is similar for fossil fuel extraction and power generation, and far lower than the 70% currently used for agriculture.

The ETC report also covers how the mining of raw materials would look in a future system, saying recycling will be key and will help reduce pressures on supply chains. While the energy transition will increase demand for some critical raw materials, the good news is that there are enough resources available and 95% of the materials needed (steel, aluminium and copper) can be easily recycled. And with advancing technology, recycling rates could reach up to 60% for those materials. It is hoped such innovations will also improve efficiency and ease-of-recycling for other key transition materials. such as lithium and copper.

Find out more by downloading the ETC report here.

UK nature’s recovery campaign

A coalition of 80 UK nature charities has called on all political parties to include a “five-point plan” to restore nature in their general election manifestos8. The report says the UK is one of the most nature-depleted countries in the world and no political party currently has an adequate recovery plan.

Charities leading the Nature 2030 campaign include the National Trust, The Wildlife Trusts, RSPB and the Woodland Trust. The five points call for parties to commit to:

  • Doubling the annual budget for nature-friendly farming and land management to £6 billion a year. Nature-friendly farming uses practices such as conserving water and protecting biodiversity in farming, while still producing food.
  • Introducing a ‘nature recovery obligation‘ for major economic sectors to help finance nature recovery.
  • Fulfilling the UK’s Global Biodiversity Framework 30×30 commitments to protect 30% of Earth’s lands and oceans, coastal areas and inland waters by 2030.
  • Establishing a National Nature Service, offering on-the-job training for “green” skills and investing in nature recovery projects.
  • Making access to a “clean and healthy environment” a human right, as part of an “Environmental Rights Bill”.

You can read the Nature 2030 report here.

Meanwhile, an independent audit shows UK solar farms can have a positive impact on biodiversity9. The assessments revealed 9 out of 10 farms showed positive results. Five of those achieve a biodiversity net gain when compared with the pre-existing habitat, with one recording a 280% improvement. The results show solar farms can have a positive impact on the natural environment when biodiversity is considered throughout the entire project, and comes ahead of changes to UK law. From November 2023, all projects granted planning permission in England must deliver at least 10% biodiversity net gain (BNG).

The findings come after another study from Solar Energy UK, reported in June’s Bryt Insight, found that well-managed solar farms can help address the loss of biodiversity in the UK.

Spotlight on renewables

Proposals for what will be the UK’s second largest offshore wind farm has received the go-ahead from the UK Government10. Once completed, the wind farm off the Yorkshire coast will contain 180 turbines and generate 2.6GW of renewable electricity.

This positive news comes in contrast to that of another major offshore wind project, which has been paused11. The decision regarding the 1.4GW farm off the coast of Norfolk was reportedly down to pressures on supply chains and cost increases facing the offshore wind industry. Previously-announced reform plans of Contracts for Difference (CfD), a Government auction scheme which supports renewable electricity generation, could see factors such as supply chains, skills gaps and grid flexibility become part of the bids. These proposed changes add hope for the continued growth of the sector, as the UK aims to grow offshore wind capacity to 50GW by 2030.

Looking beyond the UK, renewables are expected to exceed one-third of global electricity generation for the first time by 202512. The International Energy Agency (IEA)’s latest Electricity Market Report Update shows renewable energy generation is expected to grow by 11% next year. The report also says this is enough to cover all additional electricity demand, which the IEA expects to be over 3% in 2024. In more good news, the report expects the use of fossil fuels for power generation to decline by 1.2% in the same year. To read the IEA report, click here.

TALK TO OUR TEAM

If you have any questions on how any of the updates might affect your business, our team of experts is on hand to answer them. You can get in touch with us on 01217267575 or at heretohelp@brytenergy.co.uk.

Sources
  1. https://www.theguardian.com/environment/2023/aug/08/july-2023-worlds-hottest-month-climate-crisis-scientists-confirm
  2. https://www.gov.uk/government/news/80-million-boost-to-help-uk-businesses-tackle-carbon-emissions
  3. https://www.ofgem.gov.uk/publications/ten-trailblazing-projects-secure-investment-ofgems-strategic-innovation-fund-sif-part-drive-decarbonise-energy-system-lowest-cost-consumers
  4. https://www.honeywell.com/us/en/company/sustainability/environmental-sustainability-index
  5. https://www.edie.net/rishi-sunak-to-give-the-go-ahead-for-100-north-sea-oil-and-gas-licences/
  6. https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023/
  7. https://www.energy-transitions.org/new-report-scale-up-of-critical-materials-and-resources-required-for-energy-transition/
  8. https://www.wcl.org.uk/nature2030.asp
  9. https://www.wsp.com/en-gb/news/2023/independent-wsp-audit-of-lightsource-bp-solar-farms-shows-biodiversity-boost-around-uk-sites
  10. https://www.gov.uk/government/publications/hornsea-project-four-offshore-wind-farm-development-consent-order-planning-act-2008
  11. https://www.reuters.com/sustainability/vattenfall-halts-project-warns-uk-offshore-wind-targets-doubt-2023-07-20/
  12. https://www.iea.org/reports/electricity-market-report-update-2023

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