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Published May 12, 2023
The UK must install around 200GW of low carbon energy infrastructure in the next 12 years if the country is to decarbonise the power used by heavy industry in line with the government’s net zero commitments.
It is feared that many energy-intensive companies in sectors such as glass, steel, chemicals and cement may relocate to regions where there is less onerous carbon reduction legislation if they are not able to access cheap, low carbon energy in the UK.
According to a new report, access to such low cost, clean energy will depend on a raft of policy measures. These will be needed to decarbonise the power sector by 2035, accelerate the electrification of heavy industries and support the competitiveness of those same industries.
The report, published by the Aldersgate Group and University College London, calls for the grid connection process to be reformed to reduce waiting times; the fast tracking of low-carbon infrastructure projects; and adjustments to the Contracts for Difference scheme to allow more locations to participate.
The report calls for a ‘Green Power Pool’ to provide companies with direct access to renewable power. It also calls for the growth of a standardised zero carbon Power Purchase Agreement market to facilitate contracts between heavy industries and renewable generators.
The report argues that a funding package is needed to stimulate private investment in decarbonisation for industries. The report also points out the need to introduce mandatory product standards to grow demand for low carbon industrial products. Finally, green public procurement rules and a carbon border adjustment mechanism would provide a more level playing field for domestic low carbon industries.