Panel debates delivering net zero at energy sector conference

One of the highlights of the energy sector conference was a panel debate featuring guest speakers on delivering net zero.

To coincide with the energy sector conference in Birmingham, Prospect launched an important new policy paper ‘Delivering clean power – a mission for the energy system.’

This document also provided the basis for the conference panel debate on delivering net zero, which featured three guest speakers.

The panellists were:

• Matt Staley, director, onshore delivery (strategic infrastructure), National Grid
• Kirsty Townsend, head of strategy, partners and bid support, Orsted
• Paul McNamee, director of Labour’s Climate and Environment Forum

For the debate, which was chaired by sector vice-president (and incoming president) Audrey Uppington, each of the panellists gave opening remarks in response to Prospect’s new policy paper.

Their remarks here have been edited for length and clarity.

Matt Staley, director, onshore delivery (strategic infrastructure), National Grid

Matt Staley

In terms of the report, from a National Grid perspective, we are aware of many of the recommendations and I think we should recognise that an awful lot of work has happened already to transform the energy system.

But I think one thing the report really recognises, which we’re aligned with, is the scale and the pace of what we face ahead of us is far greater than anything we’ve seen historically. It is a transformational change that is needed across everything we do.

You may have seen recently we announced our largest upgrade and transformation of the grid in a generation, the great grid upgrade, which is about enabling renewable energy to be moved to where it’s needed.

One of the things in the report specifically, is the fair and just transition for workers and being fair to the communities and people impacted by our work as well. I’m very aware of that and we really need to see a framework that allows for better consultation and engagement with communities so people really understand the need for change.

Also, we absolutely see the need for market reforms to be accelerated, especially around demand flexibility. We see that as a critical thing that needs to happen ahead of this winter to address what is going to be another challenging winter from a generation point of view. Social tariffs are something else we’re aligned with, in order to protect the most vulnerable in society.

There are lots of challenges on connections. We’re advocating and working across industry to drive change in the connection process, which is an outdated process that was put in place for a different time. We’ve seen a quadrupling of connection applications in the last four years and over 60% connect within a year. Obviously, that’s still a large number of delays and we’re very aware of that.

In summary, we’re very aligned with many of your recommendations and I think events like this are important as we move forward because what needs to be done is massive, and it can’t be done in isolation. We need to involve all parties to enable it.

Kirsty Townsend, head of strategy, partners and bid support, Ørsted

I work for Ørsted, a world leader in offshore wind. The UK is our biggest market, we’ve got 14 operational wind farms in the UK including Hornsey 2, the world’s largest, and our pipeline of projects includes Hornsey 3, Hornsey 4 and some very cool floating projects in Scotland and the Celtic Sea.

Kirsty Townsend

That’s £14bn we’ve invested so far in the UK’s construction of offshore wind and plan to do another £16bn in the next five to six years, which I think makes us one of the largest investors of infrastructure in the UK, and that doesn’t include supply chain investments and other infrastructure investments.

This is a well-timed report for us and I would say that all ‘five pillars working together’ are critical to achieve the Net Zero targets that the UK has. I’m going to focus a bit more on jobs and skills and on renewables.

There’s a stat that says 100,000 UK jobs will be needed in the offshore wind sector alone by 2030, which is huge. The transition from black to green energy, which is something Ørsted has done previously, is not easy but it is possible to transition workers from one sector to another.

There are challenges but there are also real opportunities. We need skills programmes that are tailored to workers and to local communities. We’ve had some experience in doing this but there’s only so much that one company can do and something that is touched upon in this report is that it has to be done across the whole industry.

One other thing I want to touch on is on the supply chain side. It may not come as a surprise to you  that we’re supportive of getting rid of red tape, improving planning and permits for renewables, which will funnel investment into the sector. One of our wind farms took 12 years to connect.

For context, I give you a comparison of what some other European countries are doing. In Germany they’re auctioning off 7GW of offshore wind and they had a requirement to deliver that before 2030.

In the Netherlands they’ve got another 4GW, two of which is super complicated, integrated with hydrogen, and the requirement is five years to delivery from award.

The gap between what the UK is facilitating in terms of grid infrastructure, investment and supply chain, and our neighbours in Europe and other competitors is widening.

We care about that because of our commitment to the UK and also for the potential of jobs that we’re missing out on if we don’t continue to take our first mover advantage.

There are a lot of really good, strong recommendations in the report about investment in the supply chain, and I think if that can put investment into both new technologies and in the supply chain that could be something quite powerful. It’s that we need to do in order to compete with the US and the EU’s green industrial plan, which also has a strong element of local supply chain commitments.

We really support the report’s recommendation for the UK to be bold, be ambitious and really get that supply chain investment moving. It would help us in renewables, it would help the national grid, it would help nuclear and the wider energy mix.

Paul McNamee, director of Labour’s Climate and Environment Forum

We launched five months ago as an independent, not-for-profit organisation that is aimed at building ambition on climate and environment across the entire labour movement. We’re not a part of the Labour Party, we’re not officially affiliated with the Labour Party, but we do want to work with the entire labour movement, including unions, socialist societies, individuals, local authorities and the Party itself.

Paul McNamee

As well as wanting to build understanding and knowledge across what can be very complex issues, is to embed the idea that climate and environmental action is an issue of social justice. It’s an issue of jobs and skills, it’s an issue of economic prosperity and, as such, should sit very comfortably as a core labour value.

I think many in the movement now get that but there are some that still don’t, and our job is to engage with them and build that narrative.

In terms of your Clean Energy report, like my fellow panellists have said, I think there isn’t much in there to disagree with. It’s really robust on the specific issues that need to be addressed. I want to just take a look at some of the political issues that may arise.

Taking absolutely nothing for granted at the next general election, but should Labour win and become the next government, what will that be like?

We know that we’ll most likely be in a worse economic situation and very likely to have a colder and worse winter than the last one, making the cost-of-living crisis even worse. We’ll see food inflation continuing to be an issue; we’ll still have the long-term issues of stagnating growth, and I think the increased cynicism around politics, leading to distrust of developments.

What are the things we can do to start addressing those issues?

One is reframing the issue of investment. There are lots of recommendations about investment in renewables and investments in other places. I think turning that into a public debate about investment for long-term gains, into investment for a growth engine, will make it more relevant to people’s lives.

Second, is using the momentum and learning the lessons from the US Inflation Reduction Act, which I think has caused a lot of excitement in policy circles and I think its approach was particularly interesting. Obviously, matching an industrial strategy with climate ambition is a new way of doing things and then that gets people excited.

What they did was bring trade unions in earlier and worked with them to shape what the IRA would look like. I really liked the fact that they targeted the areas that have suffered the most through industrialisation and gave them more tax credits and more tax cuts. On top of that, they also built social justice and racial justice aspects into it as well. It wasn’t just about investing in the industry itself, but in the communities and the people.

Then, the final thing is, how do you start to build a bit more trust in in the vast amounts of infrastructure and development that will be needed if we want to meet Labour’s target of a fully renewable grid by 2030?

I think devolving a lot more powers and funding to the local or regional levels to allow them to actually get stuff done. Local authorities are often overlooked in how they can get money out the door very quickly and investing in those areas. Labour talk about a National Wealth Fund. I think we should try and make that into a Regional Wealth Fund.

So that’s some of the issues and ideas that we’re working on and will start to develop in the next 18 months in the run-up to the next election. As a sector, we’re not short of ideas and this Prospect report is great, but we have to land it with the political parties and policy-makers and also make sure the general public are on board as well.