The Government released their 10 Point Plan for a Green Industrial Revolution in November 2020. This builds on announcements around a green recovery and to deliver the ambition for the UK to achieve net zero carbon emissions by 2050. This plan also pulls together all the wider policy and strategy that we expect to see in 2021 – the environment is now seen as central to Government policy going forward.
The headline is £12bn investment, however this is closer to £4bn in new announcements. Although the plan may only help reduce UK emissions by 5% between 2023 and 2032 (see Utility Week article) there are elements that will support the Water UK Routemap to net zero by 2030 and the sector's ambitions on natural capital.
In this blog post I've highlighted some of the key areas that will have implications for the water sector. There will be wider implications as the range of supporting policies and strategies are consulted on in 2021 (see the summary image at the end of this post).
Implications for the water sector
Hydrogen – “Working with industry aiming to generate 5GW of low carbon hydrogen production capacity by 2030 for industry, transport, power and homes, and aiming to develop the first town heated entirely by hydrogen by the end of the decade”
A move to hydrogen for transport will support the green vehicle fleet ambitions in Carbon Reduction Strategies and the commitment to net zero operational carbon emissions by 2030. Larger vehicles (e.g. HGVs) don’t currently have feasible electric alternatives. A Hydrogen Strategy will be consulted on in 2021 and it will be important that this considers the demand side strategy (e.g. filling networks) in addition to production, so that the water sector and other users of HGVs can have access to alternative fuels to enable our net zero ambitions. There will also be a need to consider the water demand impacts of new hydrogen infrastructure.
Electric Vehicles – “Backing our world-leading car manufacturing bases including in the West Midlands, North East and North Wales to accelerate the transition to electric vehicles, and transforming our national infrastructure to better support electric vehicles.”
The new 2030 phase out date for petrol/ diesel cars and vans supports the timing needed to meet the 2030 net zero routemap ambitions. The grants for charging infrastructure and for electric vehicles may help this transition. The £1.3bn for wider public charging infrastructure may also support delivery of EV strategy and support flexibility of operations with EVs.
The range of challenges for developing EV programmes within a water company have been outlined by SES Water and this announcement from Government will help address charging and whole life costs. Additionally, by making EVs mainstream and the positive support from Government and the media it can support employee use and uptake/ acceptability.
Homes and buildings – “Making our homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 600,000 heat pumps every year by 2028.”
The energy efficiency announcements focus on space heating and a move to lower carbon sources such as heat pumps. Heating hot water in the home is the largest source of emissions after space heating (CCC, 2019). There is a need to join-up water and energy efficiency programmes to provide more cost-effective energy efficiency through water efficiency, provide green jobs and reduce the issue of homes needing to be visited twice. Joint programmes will also support PCC reduction targets and deliver public value through green jobs. There is also a need to understand how to account for carbon emissions from hot water through any partnership programmes delivering water efficiency.
The Water UK 2030 Routemap to Net Zero highlights the need for Government to support to reduce water and energy use:
- Introduce a mandatory labelling scheme for water-using appliances like washing machines and dishwashers, backed by minimum performance standards
- Change Part G of Building Regulations to stop the constantly-increasing stock of water inefficient homes
Nature – “Protecting and restoring our natural environment, planting 30,000 hectares of trees every year, whilst creating and retaining thousands of jobs.”
A £40m second round Green Recovery Challenge Fund may support the sector's ambitions to bring forward investment for the green recovery. There is a need to engage with the new National Parks, AONB designations and Landscape Recovery projects that will protect up to an additional 1.5% of natural land in England.
A Nature Strategy and a Tree Strategy will be consulted on in 2021 and these will have implications for delivering natural capital and environmental net gain. Water sector catchment programmes will also need to engage with new Environmental Land Management pilots as we move away from the Common Agricultural Policy, alongside Productivity Grants for farmers.
What next?
Actions that water companies and the sector can take to engage with the 10 point plan include:
- Identify opportunities from the Green Recovery Challenge, Nature Climate Fund, landscape recovery and ELM pilots to support natural capital ambitions.
- Develop partnerships to utilise these funds.
- Establish sector positions on consultations to support responses in 2021.
- Respond to the Hydrogen Strategy in 2021 to support our HGV transition to net zero
- Respond to consultations on energy efficiency in homes in 2021
- Respond to the England Tree Strategy and the Nature Strategy in 2021
The long-term targets in the Environment Bill will be consulted on in 2021/22 and will also support the water sector's ambitions. Ofwat have also now launched the PR24 and beyond publication, which sets out a range of environmental and resilience ambitions with 12 key questions that they are engaging on through a Future Ideas Lab.
