Tom Glover, RWE’s UK Country Chair, gave evidence last week as part of the Environmental Audit Committee (EAC) inquiry on enabling sustainable electrification. Here he outlines his key takeaways to ensure the successful roll out of low-carbon technologies that help achieve sustainable electrification of the UK economy.

Last week, I had the privilege of giving evidence as part of an inquiry by the EAC – parliament’s select committee looking at the extent to which government policy is contributing to environmental protection and sustainability objectives – examining the challenges and opportunities arising from the increasing use of electricity to power Net Zero Britain.

As the leading power generator in the UK, supplying around 15% of the country’s electricity, RWE relies heavily on an efficient and sustainable grid infrastructure to decarbonise the power sector while securing our long-term investment in the UK.

While the Government set out some firm – and welcome – commitments in this area last year, there is clearly more to do this year to ensure delivery. Giving evidence to the committee I focused on three key challenges that we need to get right to achieve sustainable electrification:

1. Addressing grid and planning challenges

At RWE we've spoken at length about the impact of grid connections and planning challenges as the key blockers to new energy infrastructure being delivered. We welcome the increasing recognition of this by Government and other UK policymakers, and the long-overdue commitment to delivering an improved grid connections system.

As I told the Committee, recent reforms – such as those set out in the Transmission Acceleration Action Plan – have the potential to create a more efficient and reliable process for connecting energy projects to the grid, aligning with the UK's ambition for renewable energy and net zero goals. We welcome the approach the Government has taken in responding to the Winser Review but it’s now critical that we see implementation at pace.   Indeed, so far we have seen none of our grid connection offers move forward, indeed the reverse, and therefore whilst we need to allow time for these reforms to have an effect its critical that they actually do result in an impact or more will need to be done.

We welcome the recommendations in the recent publication of new National Policy Statements alongside the Autumn Budget – they should be a crucial consideration in local planning to mitigate the delays caused by shortages of planning and consenting experts in both public and private sectors, as well as providing greater resources to local councils to enable quick consenting decisions.

2. Maintaining the right frameworks to drive adoption of renewables

Renewables will rightly be at the heart of the UK’s approach to generate sufficient power for a future economy more reliant on electrification. I’m excited that RWE will play a critical role in delivering this vision across all relevant renewable technologies. Our acquisition of the JBM solar business in early 2023 and the Norfolk Offshore Wind Zone, announced at the end of the year and set to be completed in due course, is a reflection of this commitment. But to meet the UK’s ambitious targets for renewables, having the right frameworks and policies in place will be essential. This year will be defining in getting this right.

Inflation – combined with fragile supply chains caused by a surge in global demand for renewables – is causing extreme challenges for the renewables sector, with costs increasing by between 20 – 40% for key components. This is making new investments increasingly difficult across the industry. The UK’s AR5 CfD auction in 2023 highlighted this, with no offshore wind projects bidding in the auction round.

With increasing costs, the CfD mechanism that government has in place to drive adoption of renewables needs to keep pace, and the Government has recognised this. We welcomed the updated parameters – which better reflect the realities of development costs – that Government has already announced for AR6, but it will now be critical that they back the auction round with sufficient budget.

We also need the right market and regulatory processes in place to drive investor confidence. We remain concerned over the potential impact of Local Marginal Pricing (LMP) and market splitting. These would be radical interventions to reform how the electricity market operates and could negatively impact investment decisions, where an evolution of current market arrangements would drive low carbon investment.

3. System resilience and the continued role of abated gas to balance the grid

As we move to a more renewables-intense grid, we need to ensure we’re confident in the resilience of the UK’s energy system. This means a continued, critical role for firm, flexible generation, through gas-fired power stations, fired on low carbon hydrogen or retrofitted with carbon capture technology.

While the vast majority of this would be abated via CCUS, even the Committee on Climate Change acknowledges there a certain amount of unabated gas will be required in a decarbonised power system, offset by negative emissions elsewhere in the economy. We need a system with multiple technologies that will increase our resilience but also deliver the lowest cost for the consumer.

At RWE we’ve set out our commitment to significant investments in CCUS, with the goal of converting our first power station to abated generation by 2030.

There is an overwhelming need for collaboration among industry, local authorities, and planning authorities for the success of decarbonisation of the UK’s gas fleet. We cannot ignore the role of firm, dispatchable, decarbonised power generation in ensuring security of supply in a decarbonised power system, with gas remaining essential through the 2030s and beyond.

Government has signaled its policy intent to grapple with these issues. Industry will continue to work in lockstep, but we now need to shift to delivery. In doing so, we can meet our shared goals of a decarbonised power system in the UK.