From the decidedly pro-environment UK Conservative government of Boris Johnson, current Prime Minister Rishi Sunak has made Net Zero one of his targets of attack, alongside “small boats” immigration. But his stance of rolling back previously bullish British decarbonization plans because they are “too expensive for cash-strapped families” is a false opposition. As the energy company E.ON explained to me recently, saving money now could mean higher costs for everyone going forward, and a weaker economy.
There is currently higher short-term expenditure for green technology. This should not be denied. Insulating your house or replacing your gas boiler with a heat pump costs money. EVs are expensive, too. But after the initial capital expense, all these technologies provide savings and will continue to do so from then onwards. “The long-term benefits of, for example, insulation can make a huge and enduring difference to a family’s energy bills,” says Scott Somerville, Chief Marketing Officer, E.ON UK. “Poor heating can also cause health problems.” By lowering the cost of heating, low-income families can afford to keep their homes at higher temperatures during winter, improving their health, although the initial expense is higher. “It’s a case of short-term gains versus ones that take a bit longer to be realized.”
The rolling back of the 2030 ban on fossil-fueled cars was the first big headline from Sunak’s attack on Net Zero. But even that is a bit of a red herring, because it doesn’t mean manufacturers can keep selling as many internal combustion engine (ICE) vehicles as they want until 2035. “A percentage of cars must still be EVs by 2030 or there will be a fine,” says Somerville. In fact, manufacturers still have to produce 80% zero emission cars and 70% zero emission vans by 2030. There are even requirements for next year (2024) of 22% for cars and 10% for vans.
In reality, vehicle sales could have flipped by 2030 anyway. Over 20% of UK cars sold were battery electric vehicles (BEVs) in August this year, and Norway has surpassed 80% all-electric car sales already. With Peugeot launching a BEV with 435 miles of range next year, which may cost as little as £45,000, there are signs that all-electric will reach cost parity with ICE in a couple of years, and then the only incentives not to buy a new BEV instead of ICE will be fear of change. With many manufacturers already committed to ending ICE sales by 2030 anyway, Sunak’s moving back of the 2030 ban to 2035 appears to be pure optics. After all, he also claims the UK is “a nation of motorists”, and BEVs are cars too. For those lucky enough to have a home charger, after the initial purchase, BEVs are already as much as ten times a mile cheaper to run than ICE, so this a purchase that can have long-term cost saving potential – and greater convenience if you only ever charge at home.
Beyond the benefits for the consumer, investment in green technology means employment in the industries of the future. “It’s not just about emissions,” says Somerville. “It’s about jobs and skills.” Sunak’s granting of new oil and gas oil licenses might mean a continuation of jobs now, but the writing is on the wall for the fossil fuel industry and those jobs have no long-term potential. That’s aside from the fact that North Sea oil and gas will be sold on an international market to profit private companies, rather than providing the claimed energy security for Britain. In contrast, renewable energy projects provide jobs in an industry with a future, and cheap local power that delivers real energy security for the host area.
E.ON’s partnership with Coventry spanning 15 years is a case in point. This includes assistance in building a 30MW solar farm on public land to help reduce the energy costs for the city, adding solar power to schools, and decarbonizing Coventry Council vehicles and depots. There are also plans to help homes and businesses improve their energy efficiency, such as offering free cavity wall insulation to eligible households. The initial investment will pay dividends in the future, and Coventry is hoping to make a big dent in its £620 million ($750 million) a year energy costs (2022 figure). The city is aiming to be the greenest ever UK City of Culture, a designation it received in 2021 that runs until 2025.
An energy supplier like E.ON can’t install a grid connection itself, but it does have the expertise required to facilitate the process. This means it can help local authorities to install the public charging their residents need to feel comfortable adopting EVs, and businesses to create the infrastructure they require to electrify their fleets. Similarly, E.ON is working with the Queen’s Medical Centre in Nottingham to convert its gas heating to a more efficient and cheaper-to-run ground source heat pump, alongside energy saving windows in a 15-year efficiency program.
Energy supply companies have a major role in the push towards the benefits of Net Zero. They are seeing themselves transforming beyond being faceless utilities, towards offering a range of services. Energy tariffs are becoming more complex, including features such as cheap overnight EV charging, and compatibility with home solar, battery storage and heat pumps. Some energy suppliers are also offering services to install these home chargers, solar, batteries and heat pumps, alongside offering apps to make managing these devices and their energy usage easier and more transparent.
None of this necessarily means Rishi Sunak is wrong to pull back on Boris Johnson’s green emphasis in the short term, even if the actual substance behind the announcement is minimal and the uncertainty generated potentially very damaging for UK industry. But it must be balanced by renewed focus on sustainability very soon because the economic benefits in the mid- and long-term are undeniable. “Net Zero is an engine for growth, rather than a cost burden we will have to bear,” concludes Somerville. “There is a positive case for charging towards Net Zero rather than running away from it.”
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