We can only deliver net-zero energy on time with a shared strategic plan

Inge Hansen, Director of Group & Markets Regulation at SSE, share her thoughts on why we need a shared strategic plan to deliver net-zero energy on time.

The new UK Government has a laudable ambition to deliver ‘clean power’ by 2030. Indeed, it is one of the Government’s core ‘missions’ by the Department for Energy Security and Net Zero . A Clean Power Plan for 2030 is currently being developed as a national priority to achieve this goal.

The benefits of a net-zero energy system are well known. The ambition is to build our own secure homegrown clean energy generation. This will help protect consumers and businesses from the volatility of expensive imported gas. And create and support thousands of good jobs in communities across the country.

Everyone recognises it is ambitious to bring forward this goal. The UK is already halfway there. But cutting emissions by 50% took over 15 years.? 2030 is fewer than 2,000 days away.

So, how do we make this mission possible?

We need a plan.

A Clean Power Plan for 2030

The first priority should be to speed up investment. The GB energy market needs to attract public and private investment of ￡280–￡400bn in generation capacity and flexible assets.[1] And well over ￡50bn is required out to 2050 to upgrade, and reinforce the GB electricity networks.[2] Our networks will function as the backbone of this energy transition.

These are big numbers. We know that the way to attract investors into energy infrastructure is to provide policy certainty.

This means being very clear about the market they are investing in.

Which renewable assets will be developed and where?? How quickly will they get connections to the electricity grid? And what technologies will back up an increasingly renewables-led (and therefore intermittent) system?

Fortunately, the National Energy Systems Operator (NESO), a new publicly owned body built on the current Electricity Systems Operator, has now been tasked with developing a Clean Power Plan for 2030.

This is a crucial opportunity to turbo charge delivery of net zero by providing a strategic plan for our energy system. The plan would give clear direction to policy and regulation. To do so, a Clean Power Plan must include some spatial planning. It must sit renewable generation, energy storage facilities and low-carbon generation relative to each other.

We need to reform policy and regulation that reflects our legacy fuel-based energy system. Starting from a Clean Power Plan for 2030, coherent reform of policy and regulation could follow swiftly. Chiefly, reform of the current connections policy. It is unable to pick the generation and storage assets most needed to deliver net zero on time.

Avoiding a ‘2030 cliff-edge’ on our investment horizon

In parallel with the NESO drawing up a Clean Power Plan for 2030, the Government should commission the NESO to produce a Strategic Spatial Energy Plan. It should set out the possible options for delivery of energy infrastructure beyond 2030 towards 2050. We want to avoid a ‘2030 cliff-edge’ on our investment horizon.

We need to speed up delivery of upgrades to electricity networks. This could be done by planning across generation and network infrastructure, and multiple energy vectors. This was Nick Winser recommendation as Electricity Networks Commissioner in 2023. His report was adopted but not delivered by the previous Government. A Strategic Spatial Energy Plan will also enable the NESO to develop a network design that facilitates these clean energy goals through a Centralised Strategic Network Plan.

Working with a range of stakeholders such as the The Crown Estate and Crown Estate Scotland , the Strategic Spatial Energy Plan will:

"assess the optimal locations, quantities and types of energy infrastructure required across Great Britain to meet forecast energy supply and demand." [3]

It will have an unprecedented role in being able to deliver a whole system plan at both regional and national levels and across energy vectors to:

• site generation and network assets in the correct relative locations to remain on track
• link national and local networks to deliver a grid system that is fit for net zero
• create a unified plan that all interrelated policy areas can deliver to

As the wider economy seeks to decarbonise, there is an expected growth in electricity demand towards 2050. The Strategic Spatial Energy Plan has a longer time horizon. This will offer Government options for delivering the electricity generation and network infrastructure that will be needed. Following a political decision on the option to pursue, the NESO can lead a Strategic Environmental Assessment on the plan as a whole. This would significantly speed up planning approvals for delivery of investments in renewable generation, energy storage and electricity network to deliver the plan.

Creating certainty to deliver clean energy

The ability to remove these barriers will let industry “get on with it” at pace to deliver benefits. The concise, sharp, direction provided by the output of a strategic spatial plan for energy will create certainty. It will allow progress to begin on nationally significant projects by network operators, low carbon generators and flexibility providers. Get this right and the benefits will be significant:

• attracting investment rather than seeing it head overseas
• lowering costs of developing mission-critical infrastructure
• protecting consumers from high and volatile energy prices
• benefitting communities with investment and jobs

Currently, there is maximum uncertainty being created by the ongoing Review of Electricity Market Arrangements (REMA). The charge generators pay for access to the transmission network needs reform. And we need to resolve the gargantuan connections queue that has built up through lack of timely reform. This uncertainty increases the cost of investment in clean power rather than encourage investment. The opposite of what we desire.

The transformative potential of a single strategic spatial for GB’s energy system – a Clean Power Plan for 2030 followed by a Spatial Strategic Energy Plan towards 2050 – is clear to industry and should be to policy makers and regulators too. We can get on with policy and regulatory reform according to a strategic spatial plan for clean power. We must realise the incongruence of market reform that seeks to rely on geographically differentiated pricing as the locational investment signal with a centrally coordinated spatial plan for the transformation of our energy system to deliver net-zero on time.

Decisions made in the next 12 months will be critical in determining whether we can hand over a net-zero power system to the next generation.

[1] Net Zero Strategy: Build Back Greener, UK Gov, October 2021

[2] See for example Beyond 2030, National Grid ESO, March 2024

[3] Independent System Operator and Planner Licence Conditions, Ofgem, March 2024