Getting to net zero – how to decarbonise transport and heat

With COP 26 in Glasgow later this year, all eyes will be on Britain and its Net Zero by 2050 pledge (2045 for Scotland).

Although the UK has done a stellar job in decarbonising its electricity supply, we now need to turn our eyes to the hard yards of the big emitters – transport and heating our homes.

Having green electricity is easy for us all – and most of us have not had to do a thing.

Now we need to look at some really tough choices.

How do we householders change our addiction to gas heating?

And how do we decarbonise transport – now our largest source of CO2?

On present trajectories we are not going nearly fast enough.

And despite the rhetoric around a long term, where green hydrogen will save us all, the tough truth (according to the UK Parliament’s influential Public Accounts Committee) is that the UK does not have a plan.

Doing stuff with new technology ‘in the future’ sounds great. But it doesn’t get us where we need to be.

To get to net zero we need to do things right now – i.e. between now and 2030.

And the uncomfortable reality is, we are all going to have to get use to change.

Changes to how we travel, changes to how we live.

The bad news is many of us don’t like change.

But change can be good – it brings opportunity for business, and if we do it right, it can make our homes, towns and cities nicer places to be.

BUSINESS GOES GREEN

Amid the Brexit and Covid gloom, you may have missed the other seismic shift in the global economy – the drive to low carbon.

Not a day goes by without another major organisation announcing a full-scale pivot towards a low carbon world.

This is not just corporate greenwash.

There cannot now be any FTSE100 firm that does not have decarbonisation on its corporate scorecard – with an ambition at least to ‘go olive’ in the medium term.

Already Amazon has become the world’s largest purchaser of green energy – with a goal to use 100 percent renewables by 2025 and investor sentiment is following suit.

Witness Total and BP, among others, stumping up £879 million per annum in option fees to the Crown Estate just to get a toehold in the UK’s burgeoning offshore wind market.

According to Mark Carney, former Governor of the Bank of England, around a fifth of the world’s capital is looking for a home, and today many of the world’s largest insurers, pension funds and asset owners, with over $5 trillion in assets under management, have committed to manage down the carbon footprints of their investments by up to 29 per cent, preferably on a scope-three basis (including all indirect greenhouse gas emissions) by 2025 and to be at net zero by 2050.

So far, so business. It looks like they have a plan. Or at least they are talking a good game.

But what about you and me? What do we need to do?

Our governments have committed to having a net zero economy by 2050 (UK) and 2045 (Scotland).

To date, we have done pretty well – our CO2 emissions have gone down significantly since 1990. But most of us (self included) have not had to lift a finger. Flick the switch and the lights still come on.

Now – as we tackle the tough, big-emitting sectors of transport, heating our homes, aviation and agriculture – change is gonna come.

THE STORY SO FAR: TALKING ‘BOUT MY GENERATION

In the last six months we have seen a slew of publications from the UK and Scottish Governments – ranging from the PM’s Ten Point Plan for a Green Industrial Revolution to the Scottish Government’s Hydrogen Policy Statement – each underlining a commitment, on paper at least, for the UK to be world leaders in low carbon.

To some extent we already are – the UK has more offshore wind generation than any nation and Scotland, with over 90 per cent of gross electricty consumption coming from renewables; has perhaps the greenest electricity supply in the world.

Making low carbon electricity is – in the UK – relatively easy. As well as being blessed with hydrocarbons, our isles have more than their fair share of wind (and sun) and together they have powered an incredible upsurge in green electricity.

Last year, for the first time – renewables overtook fossil fuels in the UK energy mix, accounting for 42 percent of our annual generation.

This is tremendous. Coal generation is history. But we are not there yet – across the UK – nearly 40 percent of electricity still comes from fossil fuels.

If we are to get to net zero – we need to switch off gas generation and get more renewables – a lot more.

I am an optimist – just recently Drax signalled it will pull out from plans to build Europe’s biggest gas fired power station, whilst the UK Government’s huge ambition to quadruple the our offshore wind supply to 40GW by 2030.

Add this Scottish and Southern Energy Network’s recently published 2050 energy scenarios – with around 11GW of onshore and offshore wind in the north of Scotland, plus around 2GW of pumped storage hydro – and the future for renewable electricity generation looks rosy.

The big lesson here is that policy works.

If government put in place clear, long-term policies, that don’t chop and change, it gives industries the opportunity to invest.

Witness offshore wind – where the CfD auction system has been phenomenally successful in delivering ever greater and ever cheaper quantities of green energy. Or look back to onshore wind and solar, where ROCs and FITs lit the touchpaper on these two industries.

And for most of us, the great news is that most of us we have not had to lift a finger. Flick the switch and the lights still come on.

So far, so good.

THE HARD YARDS – 2020-2030

The next decade needs a fundamental change in how we live.

And let’s face it, that means you.

Climate change is a western issue. The richer we are the more carbon we emit.

In aviation, just one percent of a super-emitters account for over 50 per cent of aircraft emissions and more than double the emissions of the poorest three billion on the planet.

US climate envoy John Kerry has highlighted that just 20 countries contribute over 80 percent of all emissions,

(that’s us), whilst the richest ten percent contribute over 50 of all emissions (that’s us too).

And whilst rich nations are doing a great job in driving down the carbon intensity of electricity, we now need to tackle the big polluters of transport (which last year overtook energy supply as the UK’s biggest emitter), industry, heating our buildings, and agriculture.

For the purposes of this paper – we’ll just look at the things that will affect most of us the most – heating our homes and transport.

For these – so far – we have been hugely reliant on hydrocarbons – gas to heat our homes, and oil and all its derivates to power our cars, our flights, and commercial transport.

The simplest solution – in the words of Scottish Power CEO Keith Anderson – to ‘electrify the hell out of everything’.

Electric cars, electric heating, electric everything. As long as it comes from renewables, it is one of the most straightforward routes to decarbonisation.

I think he is right – we can build more and more renewable capacity, we can make electric cars, and heat our homes with heat pumps, and generate green hydrogen. But this will all take time – and time is in short supply.

If we are to fully electrify everything, we need to double our already ambitious renewables plans and this just cannot be done this decade.

In parallel – we need to change how we live. The cheapest way to reduce CO2 is just to use less. Drive less, fly less, super-insulate our homes, eat less dairy. But these all entail very uncomfortable policy decisions right now.

Decisions that mean the era of two foreign trips are year are history. Decisions that mean closing of city streets to cars and opening them up to pedestrians and e-bikes. Decisions to retrofit our homes and rip out gas boilers.

So if we want the kinds of towns and cities people say we want to live in, some of are going to have to take the bus. And more than likely pay more for the carbon we use. Thus far the policy decisions taken have been piecemeal and stop-start.

There is hope, however.

If Covid showed us one thing – it is we don’t need to travel so much. Countless flights to London to sit in the same room may become a thing of the past.

Instead we can wear our joggers, put on a smart shirt and Zoom from home. Which brings us neatly to:

HEATING OUR HOMES – ADDICTED TO GAS

The majority of homes in the UK are warmed by mains gas, and according to the Committee for Climate Change there is minimal room for delay if UK buildings are to reach zero emissions by 2050, given the need to scale up low-carbon solutions in the 2020s.

Across the UK – heat for homes accounts for 15 percent of the county’s greenhouse gas emissions[1]. In Scotland, heat accounts for over 50 percent of energy demand[2]

Hydrogen gas and heat pumps are two proposed solutions.

Heat pumps are a technology which have been around for more than a century and offer a simple route for many homes to switch off the gas. Ideally suited to well-insulated new-builds they should be mandated for new houses and made more attractive as retrofits to existing homes.

The big challenge around heat pumps is they are not so well suited to older, poorly insulated homes – which make up a large proportion of the UK housing stock.

Since 2008 considerable national effort has gone into cavity wall and loft insulation – where this can be done.

The focus, however, has very much been on the easy stuff – which still leaves more than six million pre-war UK homes with solid walls and no easy route to low carbon heating – and in the absence of significant grants, little incentive for owners to do anything about it.

It’s a gas

Of course if you have read the news at all, hydrogen is also part of the future scenario – but despite the hype it is only going to be a small part – at least this decade.

Even ambitious heat targets set by for example the Scottish Government[3], envisage only a 20 percent mix into the UK gas grid by 2030. And a full switch to green hydrogen would require a doubling of current wind development scenarios – which cannot be achieved until well into the next decade.

These challenges have been recognised by the UK Committee for Climate Change and have been reported by the BBC and Bloomberg. Plus green hydrogen will be pricey, which equals higher bills.

Add to the mix more than 1.2 million UK homes are not connected to the GB gas grid[4] (167,000 in Scotland) – and typically these can be hard to heat older homes reliant on fuel oil or LPG.

BEIS figures[5] suggest 65 percent of these homes currently fall into the lowest energy efficiency bands EPC E-G², with the cost to upgrade a Band E home to an acceptable Band C estimated to be on average £12,300, and from Bands F and G, £18,900³.

So again, no easy or cheap solutions.

In short, we have a poorly insulated, hard to heat housing stock which is not readily suited to heat pumps, with many homes off the gas grid and hydrogen a long way off.

So what else?

Other technologies which could have a role include local heat networks – where hot water is heated centrally and distributed in a metered way and domestic heat batteries – which can soak up cheap off-peak electricity and help balance our overloaded grid.

The introduction of half-hourly tariffs by energy upstarts such as Octopus energy – allied to smart meters and the internet of things – also opens vistas for smart homes using (or storing) electricity when it’s cheap.

Many of us of a certain vintage can recall white meter storage heaters which heated up overnight – and this concept has now been rebooted, with companies like Caldera piloting super-efficient domestic heat batteries.

The idea has definite appeal. Just think – if Britain had millions of homes each able to store 100kWh of heat energy, that would give the country gigawatts of energy storage to soak up overnight renewable generation.

But as things stand – on our current trajectory – we have a long, long way to go.

In this decade we need to move decisively and fast.

TRANSPORT

For you and I – transport is the other area where we need to see some change – and fast.

As recent figures show UK transport is now our largest source of CO2 – yet despite more efficient engines, and soaring uptake of electrical vehicles – the UK’s transport emissions have flatlined.

Why? – bigger SUVs (with more emissions per vehicle), more cars and more journeys mean yet more congested roads.

There has to be a better way.

Electric cars of course are key, but a car is only as green as the electricity that powers it. Take a Nissan Leaf in Tokyo. Pretty green? Not so.

Post-Fukishima, Japan’s electricity generation is over 80 percent fossil fuels, so in actual fact the main power source of that Leaf is oil and coal ….

The UK is much better – with only 40 percent of our supply coming from fossil fuels. We can charge our batteries overnight on green electricity. But let’s not kid ourselves that that Tesla S class is carbon free. Even with 100 percent green electricity, big cars with big batteries have high embodied carbon.

And for larger vehicles – trucks and construction equipment, batteries can’t deliver the power they need.

Plus those flights to Mallorca? (Literally), let’s not go there…

Magical hydrogen is again part of the solution. But as we already know we are not going to be able to produce green hydrogen – in any meaningful quantity – for a decade at least. And if it is to contribute to domestic heating as well and transport – we will need to double our already ambitious generation targets again.

So in reality, hydrogen is a long way off. There have to be parallel pathways.

One thing the Covid outbreak demonstrated – in its early days – was what car-free cities looked like – and for many people this was appealing. So, policy makers need to think a bit beyond a £2500 grant to (already wealthy) Tesla buyers and think hard on how to get emissions down.

We need less cars, we need smaller cars and we need less journeys.

Take Edinburgh – even if all cars were electric, it would still be the most congested city in the UK – wasting hours of peoples’ time.

We need to make our towns and cities places where people feel safe to travel by other means.

This will require concerted effort at the national and city level and will bring about a whole world of pain.

Caption – a future Edinburgh, with electric vehicles?

Although people think Amsterdam, for example, has always been cycle friendly, in fact this was only achieved through fierce activism from the 1950s onwards.

Britain needs a radical rethink on what our towns, cities and neighbourhoods are for – and redesign them better. Starting a debate about, for example, 20-minute neighbourhoods would be a start.

And better surely to give grants for electric bikes rather than ones for electric cars?

One thing that may mitigate the move to less cars is tax. Electric cars don’t pay fuel duty – and increased electrification will leave a gaping hole in Treasury coffers.

Is it time to start to talk seriously about road pricing?

Every car (indeed every iphone) has the data needed to figure how much we use the roads – and if this is tied in to distance travelled and axle weights – we can nudge people to travel less and use smaller vehicles.

We don’t need to travel into cities in the same way.

But on current trends, we are travelling the wrong way.

TEN IDEAS FOR CHANGE

For this paper I have looked at the two low carbon challenges which most of us will most closely identify – our homes and our cars.

And from the foregoing, I hope you recognise that – if we are to get anything close to our zero-carbon ambition, we are going to have to change our lives much faster and much more radically than we see today.

There are no simple, pain free solutions.

A lot of political rhetoric is aimed at the sunlit uplands of ‘the future’ – a post-2030 wonderland where hydrogen will solve all of our ills (and today’s politicians will have retired ).

But to bring this balloon back to ground – we need to do some things radically, this decade, if net zero is to be more than a dream.

We need to look hard at aviation, agriculture, industry and of course transport and our homes.

I am not alone. With COP 26 only a few months away, the UK Parliament’s influential Public Accounts Committee has pointed out the UK does not have a plan.

If we are to get to where we want to be – we need to rethink our lives.

This will involve change – but if we make it the right kind of change, it could be something we all support.

As a starting point, we need to radically rethink our towns and cities and reframe them to be places that are pleasant to live.

If we had asked most people a decade ago: “Would you like to see 30 percent more traffic near you home?” I am sure very few people would have said yes.”

Today more and more of us can work from home and be free from the pain of commuting.

We need to make our homes super connected, fantastically warm and easy to heat.

And we need to reframe our towns around neighbourhoods, to make car use the exception not the norm and make our streets cleaner, safer and more pleasant places to be.

Ten ideas

First off, Government needs to pick some winners and spend some cash – in fact a lot of cash. A lot of things that need to happen are not rocket science – they just involve making decisions. Overall, we need less consultation and more action.
Use less. The most cost-effective way to reduce CO2 emissions is to not use it in the first place – so we need to have much more focus on using less – less flights, less car journeys, less heat needed for our homes.
A nationwide programme of retrofitting home insulation – with 100 per cent grants (or even 110 percent grants!) to make it worth people’s while. At present millions of people (myself included) live in hard to heat homes, with zero desire to spend the £10s of thousands (plus the disruption) it would take to make their home even half-way efficient. If government wants this to happen, government has to really push it, and make it pay.
Mandate all new homes must be built to the very highest standards. Not British standards. Look at say Denmark or Norway and do what they are doing. With heat pumps or district heat plus super-fast broadband. This will not cost the new homeowner, or the developer. A £250,000 starter home will still be a £250,000 starter home. The developer will just pass the cost down the chain, where the landowner will take the hit. Don’t let anyone tell you different.
Tax gas. Despite what you read, gas and electricity costs in the UK are around the EU average. And at present gas is cheap and electricity is not. We need – somehow – to turn this around and make natural gas a less attractive option. We need to start paying more for gas – but what politician is going to advocate that? But the tough truth is that green hydrogen will not be cheap. The best recent prediction is that green hydrogen will be more than three times the cost of our current gas supply. So we either face up to expensive H2 for domestic heat – or:
Put in place proper domestic renewables incentives to electrify heat. Witness the massive rollout of rooftop solar a decade ago. Why? Because homeowners could do the sums and it was worth their while. At present an interest free loan and the RHI to get a heat pump just doesn’t cut it. We need innovative incentives and low carbon tariffs that really make it a ‘no brainer’. If we can shift demand to the off-peak, using batteries and heat batteries, there could be scope.
Less car journeys. Yes electric cars are exciting – but they still clog up our streets and are only as low-carbon as the electricity they use. Of course we need electric cars, but at present transport emissions have flatlined for the last decade. We need less car journeys – particularly diesel and petrol cars. Government needs to ramp up fuel excise duty year on year to make drivers really think. Plus we all need to cut back on flights. At the same time we need to:
Introduce road pricing. As we shift awayfrom hydrocarbons as fuel, government will need new revenue streams and the most logical is road pricing – you pay for what you use. The technology is already here and could be easily modified to meet local needs and damp demand at peak times. Choose to drive into town at 0830 and you’ll have to pay.
In parallel, we need to build our homes, towns and cities around the 20-minute neighbourhood. Start to ditch on-street parking and reclaim the streets, Amsterdam style. This will be controversial and involve conflict – but surely better that our kids feel safe to bike to school than sit in mum’s SUV. The current rate of change is glacial – witness Edinburgh, where it is quicker to build a £1billion tram project than an £11.5 million east-west cycle route. Five years in planning and counting and held up by local traders who state it will ‘increase pollution’ (really). And this in a city pledging to be net zero by 2030. We really do need less consultation, more action.
Presumption against new road build spending in favour of low carbon infrastructure. Governments love road spending – witness every budget. Now we need to challenge every single £1 spent on roads through a low carbon lens. Could that £1 be spent on local transport infrastructure, cycle ways or super-fast broadband – each of which shows more bang for buck in economic benefit.

As we said at the outset, Great Britain has done a stellar job in decarbonising our electricity supply.

But if we are really serious about Net Zero, a lot of change needs to happen, and fast.

PICKING WINNERS

With any transformation of the economy, there will be winners and losers. Witness the major transformations of the 80s and 90s where Britain weaned itself off homegrown coal and steel, and yet today, a generation later many communities affected still bear the scars in terms of lowered life opportunities.

This time round, governments say, there will be a just transition, where no one gets left behind. So, let’s not say ‘losers’ – let’s say sectors which need to adapt, and fast.

For the UK there will be plenty of sectors which thrive – and if we are to look at the example of wind, or rooftop solar, what really works are clear and consistent policies with clear glidepaths to give business and individuals the confidence to invest.

GENERATION

The decade will see vast amounts of new generation – onshore and offshore wind plus the first UK hydrogen projects. Winners will include:

Electricity generators
Grid operators
Supply chain companies
Energy storage schemes – pumped storage, gravity, batteries and heat batteries
Early hydrogen projects
Electrolysers

HOMES

We need to do something about our homes and fast. A lot of this is not rocket science – it just needs political will, a plan, and a lot of cash. Winners will be:

Retrofitters
Heat pump manufacturers and installers
Solar installers
Domestic heat batteries
Hydrogen economy (post-2030)

TRANSPORT

If we just think electric cars and post-2030 hydrogen – we are not going to arrive at our net zero destination nearly fast enough. If we go for a massive shift in the way we live the winners will include: