UK Government publishes Clean Power 2030 Action Plan

The UK Government has published its Clean Power 2030 Action Plan. Building upon a key Labour Party Manifesto commitment, the Action Plan sets out a wide ranging and ambitious suite of measures aimed at ensuring that electricity will, by 2030, be generated entirely from “clean” sources. 

The plan is described as an “urgent priority”, a “once in a generation upgrade of our energy infrastructure”, and a “sprint” towards a secure and affordable energy supply for the UK. It sees the creation of essential new energy industries and infrastructure through an estimated £40 billion of annual investment over the coming 5 years, and the meeting of key objectives on the reduction of greenhouse gas emissions.

In his foreword, the Secretary of State, Ed Miliband, places particular emphasis on energy security and on ensuring the UK’s independence from volatile fossil fuel markets. He cites the cost of living crisis that followed Russia’s invasion of Ukraine as evidence of the UK’s deep vulnerability in an increasingly unstable world.

Key points

The Action Plan covers many areas that each influence energy generation and distribution. The key points covered include:

• Electricity grid connections: reforming the grid connections process and reducing “the queue” which has grown tenfold in the past 5 years to provide a framework that prioritises projects needed for 2030 (replacing the current “first come, first served” system)
  
  
• Planning and consenting: upgrading the planning system, which will include workforce and resourcing reforms, so that it can manage an increased caseload, and ensuring that the system can prioritise 2030 projects (NSIPS, as well as energy infrastructure below the NSIP threshold). The plan builds on the ambition for legislative reform seen in the Planning and Infrastructure Bill and updates to national planning policies.
  
  
• Renewable and nuclear generating assets: a recognition that with the phasing out of the last gas-fired generating assets, generating capacity will substantially be delivered by nuclear (including Hinkley C, expected to come online in 2029/2031) and renewable assets, most obviously wind (onshore and offshore) and solar. The plan addresses specific issues relating to the delivery of renewable and nuclear projects (for example, by changing the information the Secretary of State can use to inform the final budget for fixed-bottom offshore wind projects), expanding the renewable auction / CfD process so that projects can secure financing before their planning permission has been finalised, and supporting local and community-led renewable capacity initiatives. Whilst emerging renewable technologies, like floating offshore wind and tidal stream, are expected to play a more limited role, the plan indicates that the ability to deploy them at scale could be important to the UK’s achievement of longer-term decarbonisation objectives.
  
  
• Still a role for gas?: the plan accepts one of NESO’s recommendations that, for reasons of pragmatism, maintaining access to gas power stations is recommended - provided their use forms no more than 5% of total generation.
  
  
• Short-duration energy storage and flexibility: introducing new market reforms to provide batteries and consumer-led flexibility with appropriate and fair access to, and use within, relevant markets. This would include new financing options for retrofit works (including batteries) in the Warm Homes Plan, a consultation on consumer engagement, consideration of reform on the maximum resale price and introduction of new guaranteed standards of performance relating to smart metering in 2025. The plan also promises a consultation on how grid-scale batteries could be referenced in future planning reforms.
  
  
• Long-duration flexibility: increasing low carbon long-duration capacity through projects like Net Zero Teesside (said to be the world’s first at scale gas power plant with carbon capture), the development of a Hydrogen to Power business model which will de-risk investment and bring forward capacity, and scaling up deployment of pump storage hydropower.
  
  
• Electricity market reform: ensuring the market works in tandem with support schemes to deliver the right investment signals and that any sector-specific barriers to deployment are addressed to enable the huge volume of deployment that will underpin the Action Plan. The plan foresees increased short-duration flexibility across battery storage, consumer-led flexibility and interconnection capacity reducing the amount of more costly generation and network infrastructure that needs to be built. It includes reform of the capacity market and the acceleration of reforms to balancing markets and network charging arrangements. The Clean Power 2030 unit will coordinate reforming work across Government and industry.
  
  
• Transmission infrastructure: the Action Plan recognises that, in order to achieve the 2030 ambition, around twice as much transmission network infrastructure will be required by 2030 as has been built in the past decade. Regard is had to the Winser recommendations, and the crucial role of OFGEM, NESO and the transmission network companies. This will encourage those interested in the development of the CATO mode.
  
  
• Supply chains and workforce: skills and workforce gaps are recognised as potential blockers to achieving Clean Power 2030. The Action Plan envisages a sector plan for clean energy industries, convening a workforce industry forum to develop a deep understanding of system-level supply chain and workforce planning needs for Clean Power 2030’s delivery, and implementing targeted interventions to reskill and upskill workers across the economy. It highlights the Office for Clean Energy Jobs’ role in working with the sector, trade unions and the devolved Governments to support regions transitioning from carbon-intensive industries to clean energy sectors to ensure that jobs have good working conditions, are high quality and fairly paid.
  
  
• Funding: the scale of the Action Plan is ambitious and there are many statements for future actions and “we will”. To facilitate this the plan refers to a need for an investment from the UK Governments combined (UK, Scotland and Wales) and the private sector of £40bn per annum for the next 6 years, being circa £30bn for generation assets and £10bn for transmission assets. As regards Government investment, there will be roles for both Great British Energy and the National Wealth Fund (formerly the UK Infrastructure Bank). There's little detail behind these figures, save that they're said to broadly align with NESO’s investment estimate. We would assess the opportunities for private sector investment and financing as very significant.
  
  
• Nature: the Action Plan recognises the need to align the clean energy goals with the Government’s commitments to nature restoration and the natural environment. Protecting and enhancing habitats is to occur in parallel to cutting carbon emissions.

The need for speed

Whilst the market will need time to digest the Action Plan’s contents, the message from the Government is clear: “we need to move fast and build things to deliver the once-in-a-generation upgrade of our energy infrastructure Britain needs”. 

The Action Plan is described as “our first major step towards 2030” and provides that the coming months and years will see programmes of activity, and, we expect, targeted delivery and policy initiatives. 

The Action Plan relies heavily on both public and private investment, expertise and coordination. With so many swift and sweeping changes to implement there are significant opportunities and challenges for all stakeholders in the clean energy sector.

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