Has Covid-19 impacted he UK’s transition to net zero greenhouse gas emissions by 2050?

Net zero by 2050 means achieving a balance between the amount of greenhouse gases (GHG) emitted and taken out of the atmosphere. Before 2020, the UK still had a long way to go to meet this target, but good progress had been made. Now, in the shadow of a global pandemic, Market Infra has spoken to three leaders in electricity transmission and distribution to find out whether net zero by 2050 is still within reach.

In 2019, the UK Government became the first major economy in the world to commit to a legally binding target of net zero GHG emissions by 2050. Passing this legislation at the time, the Energy and Clean Growth Minister Chris Skidmore was optimistic about the UK’s chances stating:

To facilitate this transition, National Grid Electricity System Operator (ESO), Scottish & Southern Electricity Networks and the System Operator for Northern Ireland have announced their commitment to prepare for the UK’s electricity system to be able to run on purely zero-carbon electricity. The electricity transmission and distribution network must be able to accommodate various renewable energy sources (on/offshore wind, nuclear, solar, etc.) and be able to support a greater demand on the grid from an increasingly electrified transport sector.

However, almost a year on, the emergence of COVID-19 has resulted in unforeseen impacts on the UK’s sustainability ambitions. Decarbonisation projects across the country have experienced delays due to the restrictive lockdown measures. The United Nation’s Climate Change Conference (COP26) has also now been delayed until November 2021, the most significant climate conference since COP21, where the Paris Agreement was signed. This was the opportunity to review nations’ progress against the 2020 targets set out in the Paris Agreement and fortify their ambitions towards 2030.

To find out just how far-reaching the effects of COVID-19 have been so far, Market Infra has spoken to a selection of industry leaders from the electricity transmission and distribution (T&D) sector and has posed the question: has COVID-19 impacted the T&D sector’s ability to facilitate the UK’s transition to net zero greenhouse gas emissions by 2050?

What progress has the UK already made?

Prior to being put into lockdown on 23rd March, the UK’s drive towards achieving net zero had made steady progress. According to the Department for Business, Energy & Industrial Strategy (BEIS), the UK had managed to reduce its greenhouse gas emissions by approximately 45% (since the 1990 baseline). Alongside this, National Grid ESO had managed to achieve a reduction in the average carbon intensity of the electricity system by 53%.

Optimism was also growing amongst our industry leaders at SSE Enterprise (SSEE) Contracting, Wood Group and Burns & McDonnell in T&D.

Speaking to John Farrell, Director of Operations UK & Ireland at SSEE Contracting, he was ‘happy with the good progress’ made by the energy giant. In 2018/19, SSE reported its highest-ever year of electricity generation from renewable sources, with 11.4TWh of output compared to 10.4TWh.

Paul Killilea, Engineering and Programme Operations Director at Wood, was ‘impressed’ at the amount of renewable energy currently on the grid. ‘The Carbon difference is huge compared to when I first started out in the industry’, he told us. 

At Burns & McDonnell the sentiment was no different. Despite being relatively new entrants into the UK market, Jonathan Chapman, Managing Director UK, was positive about the business’s prospects at supporting the transition to net zero. ‘We had set very clear expectations of our supply chain and the right message was coming down from our clients. We recently entered into a consortium of several companies to develop a concept to help decarbonise South Wales, which National Grid are now looking at taking to other parts of the UK.’

There was still a long way to go to reach net zero by 2050, but the mood within T&D prior to lockdown was positive.

How far has COVID-19 set the UK back?

The COVID-19 pandemic has undoubtedly had an impact on the UK’s plan to reduce GHG emissions, with major renewable generation projects experiencing delays. On 1st July 2020, the statutory deadline for decisions on the Development Consent Order of both the Hornsea Project Three and Vattenfall’s Norfolk Vanguard offshore wind farms was delayed until 31st December. With the combined potential to power approximately 5.9 million of the 27.8 million homes, this is a blow to the UK’s net zero ambitions.

T&D has not managed to escape the spread of delays, either. Work on several T&D infrastructure projects has only recently started to re-commence.

As expected, the pandemic has disrupted project delivery and productivity on site. Paul Killilea described the situation at Wood: ‘Our projects slowed down because of COVID-19. Our site-based employees, who traditionally travel away from home, couldn’t get the necessary accommodation.’

SSEE Contracting’s John Farrell spoke about his experiences managing the impacts of the pandemic. ‘Of course, COVID-19 has had an affect’ he said. SSEE Contracting had experienced delays, but John’s chief concern was its effect on the supply chain. ‘As we move through this, we have seen certain areas of supply chain specialism impacted.’ The loss of ‘key experience and resource skill sets’ within the industry has caused a noticeable disruption in the marketplace and the loss of stability within the supply chain has slowed down decarbonisation progress. The pandemic has also shifted priorities in the supply chain away from sustainability to survival.

At Burns & McDonnell, whilst their live projects have continued, their short-term pipeline of future opportunities had been hit the hardest. Jonathan Chapman told us how it’s currently ‘hard to meet new clients as we can’t get the necessary face time.’ As a result, ‘some of the smaller projects we were expecting have not come through’.  

Jonathan added that the delay to key policy decisions from the Government also slowed things down. ‘The biggest impact to achieving the 2050 targets will be the delay to the regulations coming out of BEIS. The Government need to provide clarity to investors.’

Clearly, COVID-19 has affected businesses and projects within T&D and across other industries. However, the common theme across the conversations with our industry leaders was that, overall, these impacts would do little to hamper any drive towards net zero.

‘These delays can be caught up’, claimed John Farrell. ‘The drive towards net zero remains the same and businesses will pick up the slack.’

‘In hindsight, initial project closures may have resulted from a knee-jerk reaction to the situation’, added Paul Killilea.

‘I think it [COVID-19] will be seen as a small blip on a longer-term journey to net zero’, said Jonathan Chapman.

With that said, we asked our industry leaders whether certain positive outcomes could be drawn from this crisis for the UK’s net zero ambitions? They seemed to think so.

A consensus that COVID-19 has been positive for net zero ambitions

An overriding sentiment present throughout each conversation with our industry leaders was one of positivity about the future. There was real sense that the aftermath of the pandemic would see a greater focus on green initiatives to stimulate an economic recovery.

‘If anything, COVID-19 has reinforced the need for our sustainability strategy and assured us that we are on the right path’, John Farrell told us. He highlighted that, moving forward, the UK needed a ‘green recovery’ and that SSE Renewables was well poised to support this through further investment in their windfarms. ‘The deployment of offshore and onshore windfarms will be fundamental to achieving net zero. In June, we took final investment decisions into the £3bn Seagreen offshore wind farm and the £580m Viking onshore wind farm, which together will deliver clean renewable electricity for around 1.5 million homes.’

Paul Killilea expressed a similar feeling and pointed out that their regulatory obligations were still a key motivator. ‘The targets set by Ofgem for T&D haven’t been relaxed and energy policy continues to push us in that direction.’ With specific reference to his own experience in rail electrification, he said ‘the light is at the end of tunnel. There may have been a 2-3 month hiatus, but there remains a big push to get this all done.’

Paul also believed that the more environmentally friendly changes to working practices that resulted from the pandemic would become permanent. ‘Changes to policies around non-essential travel will remain on’, he said. ‘Wherever possible, Wood has already stopped unnecessary visits to sites and introduced new technologies that enable supervisors to view ongoing works digitally.’

He also pointed to a growth in remote working as a key result of the pandemic. Where before the technology may not have been there, ‘COVID has been helping this along. Companies are starting to question the need for office space when a single ‘serviced’ desk can often cost around £3000 a year. This hasn’t changed people’s minds, it’s brought net zero to the fore. The non-essential stuff has been lost forever.’

Jonathan Chapman shared this view, adding that Burns & McDonnell’s own approach was relaxing. ‘We previously had a rigid policy of 5 days a week in the office, but COVID is proving that productivity can still be maintained outside of this.’

The key to achieving net zero will be ‘investment’ and ‘clear government policy’, Jonathan made clear. ‘There will be no silver bullet, no fairy tale technology that will save us. I am positive that we will meet net zero by 2050. The UK has the best of everybody, but what we need is a clear policy framework to support this.’

A look to the future

So, has COVID-19 impacted the electricity transmission and distribution sector’s ability to facilitate the UK’s transition to net zero greenhouse gas emissions by 2050? The prevailing short answer would be no. Our industry leaders agreed that whilst delays were inevitable, work has been able to continue with no major disruptions to overall sustainability ambitions. In fact, in some cases COVID-19 has seemingly improved environmental practices and provided an opportunity for an increase in investment for green initiatives to stimulate an economic recovery.

However, looking to the future it is crucial is that the appetite for investment in decarbonising infrastructure remains strong if we are to come close to meeting net zero by 2050. A study conducted in 2011 found that efforts to stimulate the economy after the 2008-09 Global Financial Crisis saw emissions rise by 5.4% in 2010, which we cannot afford to let happen in 2021. Whether this pandemic will result in lasting change is still up in the air. Consequently, in a letter addressed to Boris Johnson on 1st June, over 200 business appealed for:

However, Managing Director of the International Monetary Fund, Kristalina Georgieva, makes a crucial point: