Richard Burrell, CEO at AMP Clean Energy
The huge increases in household and business bills, driven in large part by the terrible events in Ukraine, mean that energy has never been far from the headlines in recent weeks. The desire to end Russian oil and gas imports has led to a renewed focus on energy security not just in the UK, but across Western Europe.
Today, the Government published its long-awaited Energy Security Strategy which lays out the changes the Government wants to make in our energy mix in response to both these issues, but long before this reached the very top of the political agenda, change was coming for British businesses.
What is annoying for all concerned is that it has taken so long for the UK Government to address this fundamental issue. The solution to ramp up wind generation and increase our nuclear capability are sensible long-term strategies but they do not deal with the short and medium term challenges that we all face. Like it or not, the UK will need to burn gas and we will need flexible generation assets (peakers and storage) to deal with the intermittency problem when the wind doesn’t blow, and the sun doesn’t shine. At the same time, we need a greater short term focus on the decarbonisation of heat which definitely cannot be done by heat pumps alone.
Over the next few years, companies will have to engage with a swathe of new regulations designed to reduce consumption of fossil fuels and to increase uptake of alternatives. With industrial processes accounting for 16% of UK emissions, business as usual is simply not compatible with progress to net zero.
It is impossible to reduce the hundreds, if not thousands, of pages of energy policy documents published in the last year to a few paragraphs. However, the key message is simple: it will become increasingly expensive for business to ignore the net zero transition.
Government is also increasingly conscious of the need for it to support businesses to do ‘the right thing’, with new funding streams for hydrogen and CCUS.
In parallel, monitoring and reporting on emissions and wider environmental impacts will be stepped up, measures which will allow investors and consumers to compare similar companies and make informed choices about where they invest or spend their money.
As we approach the ‘business end’ of the energy transition, there are real opportunities for forward-looking companies who are willing to act now and to lead the charge, and fewer and fewer hiding places for businesses that refuse to embrace change.
But whether companies wish to lead or simply comply, we understand there are two very real and fundamental challenges to all companies and organisations from the scale of change coming over the years ahead: firstly, the need to make difficult choices about where to invest, and secondly, the difficulty of navigating the ever-changing policy landscape.
This week, AMP Clean Energy is launching its Energy Policy Insights Briefing Papers, designed to help businesses actively engage with environmental policy and regulation, and to build decarbonisation strategies which prepare for the challenges ahead. Now is the time for businesses to get ahead of the curve and reap the reputational and financial rewards presented by the transition to net zero.
To find out how we can support your net zero journey please get in touch.