Government risks missing clean energy targets, NAO report warns

With attention focused on the recent energy crisis, the recently created Department for Energy Security and Net Zero (DESNZ) has made little progress with a long-term delivery plan for all electricity to be generated through clean energy sources, the report said.

DESNZ has taken on the responsibilities for energy security and net zero that were previously held by the Department for Business, Energy and Industrial Strategy. As BEIS, it had internally planned to have established a route to decarbonisation by 2035. However, because it was focusing attention on responses to high energy bills, the department scaled back its work on coordinating long-term power sector decarbonisation.

According to NAO, the lack of a delivery plan risks diminishing the confidence of industry stakeholders, who are said to be concerned about how the change and investment required across the energy sector will be brought together without a strategic vision. Similarly, the absence of a clear plan and the perception that there could be changes in government policies could deter external investors from providing funds for new infrastructure or lead them to increase the rates of return they require.

In a statement, Gareth Davies, head of the NAO, said: “It is understandable that DESNZ and its predecessor BEIS has focused on dealing with the immediate energy crisis over the past 12 months. But one consequence of this is that it lacks a delivery plan for decarbonising power by 2035, which is the backbone of its broader net zero ambition.

“The longer DESNZ goes without a critical path that brings together different aspects of power decarbonisation, the higher the risk that it does not achieve its ambitions, or it does so at a greater than necessary cost to taxpayers and consumers.”

Emissions from UK power generation have decreased by 73 per cent since 1990, but 41 per cent of UK electricity is still produced from natural gas and greenhouse gas emissions from electricity generation made up 13 per cent of total UK emissions in 2021.

The NAO report sets out the challenges of achieving the remaining emission reductions, highlighting that the government’s ambitions for the expansion of offshore wind, solar and nuclear power will require much faster deployment rates than have been achieved before. For the government to meet its goal of achieving 50GW of offshore wind by 2030, DESNZ will need to oversee the deployment of nearly three times as much offshore wind capacity in eight years as it has in the last two decades.

The NAO recommends that DESNZ needs to set clear measures of overall progress with interim milestones and that these should be reported annually to parliament, along with an explanation of how this performance information has been used to determine any significant changes to its overall plan.

Commenting on the announcement, Christophe Junillon, managing director – Nuclear & Power, Atkins, said: “Decarbonising our energy system is the biggest infrastructure programme the UK has ever seen, and the scale of the engineering challenge to deliver it by 2035 can’t be under-estimated: we need to build new generation at five times the current rate, double the size of our energy system and install six times the amount of network infrastructure, all in parallel.

“A major infrastructure programme needs a detailed delivery plan behind it: as the NAO asserts, we need to urgently accelerate new nuclear; streamline the development of offshore wind and the network and storage infrastructure to support it; and put in place a delivery plan to coordinate a whole system approach to decarbonising power in the most cost-effective and efficient way.”

Junillon continued: “It is also fundamentally important that this plan is created by a body that can oversee its implementation and adapt it where necessary. This plan, along with tangible targets and measurement to ensure progress remains on track, is vital to ensure the UK achieves net zero ambitions and long overdue.”