As the UK continues to work towards reaching net zero by 2050, an independent review has been published looking into the opportunities the transition could bring to businesses. In this extended edition of Bryt Insight, we take a look at what the review’s recommendations mean for your business.

The last month has also seen progress towards the UK’s renewable ambitions, as well as a historic first live event for the Demand Flexibility Service. Here’s what you need to know: 

The independent net zero review, Mission Zero, has been published by MP Chris Skidmore, to explore the best ways to maximise business and economic growth whilst working towards the net zero target. 

Commissioned last September, the review involved engaging with businesses, the public and climate experts and resulted in 129 recommendations for the Government¹. 

From this, Mr Skidmore urged ministers to grasp the “historic opportunity” that net zero presents, saying that the UK should be proud of the lead it has taken in tackling climate change. The review however states the importance of the Government supporting businesses, describing them as “critical” to the net zero transition. He adds that “their investment and innovation will bring low carbon technology to the mass market. They will drive many of the benefits we will all experience from net zero, not least economic growth”. 

The review is split into two parts – with the first explaining the opportunity and benefits to business, individuals and the economy as a whole, and the second outlining how this can be achieved. 

The review recommends the Government should consider the following to support businesses: 

• Reviewing business incentives to invest in decarbonisation 

The Government should review how the Treasury incentivises businesses to invest in decarbonisation and improve energy efficiency. This could be through the tax system, business rate reform or capital allowances, helping to remove potential financial barriers to adopting carbon reduction programmes. 

• Providing clarity on the future of the Emissions Trading Scheme (ETS) 

The review recognises that the UK’s Emissions Trading Scheme (ETS) – a cap and trade scheme which caps the total level of greenhouse gas emissions a business can emit – provides a clear incentive for businesses to invest in decarbonisation. The review points out that the cap only runs until 2030, and having no plan for beyond that date is contributing to delays in investments. It says the UK Government should work with the rest of the ETS Authority – which also includes the Scottish and Welsh Governments and Northern Ireland’s Department of Agriculture, Environment and Rural Affairs – to develop a pathway for the scheme to 2040. This would provide clarity and certainty to businesses’ future decarbonisation strategies.  

• Building the skills needed for the net zero transition 

The delivery of previous Government recommendations and commitments set out in the Green Jobs Taskforce and the 2021 Net Zero Strategy should be driven forward, with regular reporting on progress made. These included targets, training and provisions for “green” skills and jobs. 

The report also recommends further support for businesses taking on apprentices, and suggests training courses related to net zero should be accelerated to rapidly upskill and retrain the existing workforce. 

For small and medium-sized businesses, a Help to Grow Green campaign should be launched to offer information resources and vouchers to help them plan and invest in the net zero transition. 

• Recognising businesses’ sustainability efforts 

A “Net zero charter mark” is proposed to recognise the efforts of businesses that are decarbonising their operations and supply chains. Not only would this promote a firm’s carbon credentials, it would also give investors and other stakeholders confidence in how a business is progressing towards net zero.  

• Protecting industrial businesses from environmental undercutting 

Progress should be made on the Government consultation on a range of ‘carbon leakage’ mitigation options. Carbon leakage occurs when operations – and their associated emissions – are transferred across jurisdictions to countries with less ambitious carbon policies, which can lead to a net increase in global emissions. As the UK’s generally more ambitious climate targets and policies can often bring higher carbon prices, the Government is looking at measures such as a carbon border adjustment mechanism which could help level the playing field for British industry against their international counterparts. For energy-intensive businesses, this could reverse the risk that carbon leakage currently poses to growth in the UK, preventing the ‘offshoring’ of production and jobs. 

These are just some of the review’s 129 recommendations, which shows the scale of the opportunity the Government and businesses have. To learn more, you can read the full review here. 

Ian Brothwell, Managing Director at Bryt Energy, said: “This review is a comprehensive action plan for the Government to take notice of. It reflects the fact businesses are absolutely critical in driving the net zero transition and, by working collaboratively with the right support, this goal is firmly within our grasp. We join the report’s authors in urging ministers to grab the ‘historic opportunity’ offered by net zero, and to use the UK’s leading position in tackling climate change to its full potential.” 

Businesses are being given the opportunity to comment on plans to modernise the Capacity Market – a key aspect of the UK’s electricity security – which would see the mechanism strengthened and provide greater alignment with the net zero transition².

Launched in 2014, the Capacity Market is used to ensure the security of electricity supply to meet the country’s demand. By payment through auctions, providers are incentivised to keep capacity resources ready to generate or reduce electricity when needed. The Department for Business, Energy and Industrial Strategy (we discuss their recent disbanding in our ‘News in brief’) has said the Capacity Market now needs reforming to reflect the changes seen in the UK’s energy mix since then, as well as to support future decarbonisation plans. 

Changes would provide greater clarity for investors around the net zero transition, prepare for the adoption of renewable energy technologies and significantly tighten the emissions limits on fossil fuel plants by the middle of the 2030s. 

If you are interested in having your say, you can take part in the consultation, which runs until March 3rd 2023, by clicking here. 

The Electric Vehicle Smart Charging Action Plan has been published by the UK Government and watchdog Ofgem³, which would see a more efficient charging system widely implemented. 

The plan sets out steps being taken to provide more support for smart charging – which intelligently optimises the charging process, for example, to enable users to top-up Electric Vehicles (EVs) when electricity is cheaper or the carbon intensity of the grid is lower. The Government wants to make it the preferred method of long duration charging by 2025, and has also announced £16 million funding from the Net Zero Innovation Portfolio (NZIP) for technologies that harness the potential of smart charging.  

The move has benefits for both businesses and the wider grid, with smart charging favouring renewable electricity. Investing in EV fleets and charging, with a strong EV strategy, is a good way for businesses to optimise their energy usage and support the grid.

Find out more about the new Electric Vehicle Smart Charging Action Plan, here.

National Grid ESO (Electricity System Operator) ran its first live Demand Flexibility Service (DFS) event on January 24th, which involved businesses optimising their usage to support the grid.

The operator outlined some of the benefits businesses have seen so far⁴, with one business having earned £1,726 by taking part in a single event. It also shared the example of a manufacturing business that had reduced its working day to take part and saw no impact on productivity – showing that optimising your energy usage doesn’t have to negatively impact your operations.

The first live event took place after months of successful tests which offer businesses and individual consumers a simple way to get involved with grid optimisation. If your business wants to learn more about optimisation, click here.

*please note Bryt Energy are not currently participating in this scheme.

Here’s what you need to know about UK renewables this month:

• Renewables have generated more electricity than gas in the UK this winter⁵. New analysis from the Energy and Climate Intelligence Unit (ECIU) shows between October 1st 2022 and February 10^th 2023, renewables generated a combined 42TWh of electricity – reducing the need for 85TWh of gas over the same period.
• Leases for six new offshore wind projects, with a potential capacity of 8GW, have been agreed by The Crown Estate⁶. The projects could be up and running and producing electricity by 2030, with enough power to supply more than 7 million homes. The six sites, in the Irish Sea and off Yorkshire and Lincolnshire, would push UK offshore wind leases beyond 40GW – which would achieve the UK’s 2030 offshore wind generation target⁷.
• The European Marine Energy Centre (EMEC) has provided an update on its proposed 100MW floating offshore wind test site. It now expects the project, in Orkney, Scotland, to generate £690 million for the UK economy and add 4,160 new jobs around the country, across its expected 25-year lifespan⁸.

• The Department for Business, Energy and Industrial Strategy (BEIS) has recently been disbanded and split into three new departments: the Department for Business and Trade, the Department for Energy Security and Net Zero, and the Department for Science, Innovation and Technology⁹. Grant Shapps, previously Secretary of State for BEIS, will head up the new Department for Energy Security and Net Zero.
• The Government has announced proposals to increase minimum energy performance standards for lighting in buildings. The new standards could see businesses save £2,000–£3,000 over the lifetime of a bulb. The report is available alongside a consultation which runs until April 4th. Businesses involved in the lighting sector or working towards net zero targets are encouraged to have their say¹⁰.
• The search continues to find a lower-carbon alternative to red diesel – a fossil fuel used in industrial off-road vehicles and machinery. Used in UK industries including construction, mining and quarrying, in vehicles such as bulldozers, forklifts and cranes, lower-carbon options will be vital for enabling users in hard-to-abate sectors to decarbonise. And with the announcement of the second phase of the Government’s Red Diesel Replacement Competition, that solution is a step closer¹¹. Learn more about the competition, here.
• Environmental, social and governance (ESG) is the top trend that will drive investment this year, according to a survey of financial companies¹². As part of its 2023 Global Innovation Report, financial services technology firm FIS asked 2,000 industry executives what their key areas of investment in 2023 were, with 84% of respondents listing ESG – emphasising the importance of these standards to businesses’ strategies.

If you have any questions on how any of the updates might affect your business, our team of experts is on hand to answer them. You can get in touch with us on 0330 053 8620 or at heretohelp@brytenergy.co.uk.