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The UK and the energy transition

Leading the way?

May 2022

Insight Paper

The UK and the energy transition

Foreword

Executive summary

Chapter 1: The UK and the energy transition

1.1. Areas of competitive advantage

1.2. Key challenges

Chapter 2: Solar PV

2.1. A resurgent market?

2.2. The evolution of routes to market

2.3. Is co-location set for the mainstream?

Chapter 3: Onshore wind

3.1. A bumpy road?

3.2. Planning problems

3.3. Making way for onshore wind

Chapter 4: Oshore wind

4.1. A success story

4.2. Ambitious targets, enduring challenges

4.3. Realising the potential

Chapter 5: Hydrogen and CCUS

5.1. A nascent and rapidly evolving market

5.2. Uncertainty clouds investment decisions

5.3. Exploiting ﬁrst mover advantage

Chapter 6: Leading the way

About Womble Bond Dickinson

About Cornwall Insight

Acknowledgements

Contents

The UK and the energy transition

Foreword

Richard Cockburn

Partner, Head of Energy

Womble Bond Dickinson

The energy landscape is ever-shifting and geopolitical events have shone a particular

spotlight on the UK’s energy system. The age-old energy trilemma is in very sharp focus

as the UK looks to decarbonise its energy sources, whilst ensuring security of supply

and aordability of energy use.

To drive industry conversation and to help our clients and other key stakeholders

to understand better how well the UK is performing in its energy transition, we

commissioned this report from Cornwall Insight. Our aim was to bring global energy

leaders together to debate the challenges and opportunities facing the UK energy sector.

The report oers global context, analysis of dierent energy markets and expert insights

which shine a light on the UK’s progress in the energy transition.

Throughout the research period for this report, new variables continued to be thrown into

the mix – the impact of the invasion of Ukraine, gas supply concerns and new legislation

and political strategies were just some of the developments which are typical of the pace

at which the energy landscape changes.

This report draws on lessons from around the globe and it becomes increasingly clear

that the journey to net zero must be a collaborative one. The UK is well placed to play a

key role in global eorts to reduce carbon emissions over the coming decades. The UK

is a world leader in areas such as oshore wind, and it is now – after years of delay –

forging ahead in carbon capture and storage and hydrogen, but it can still learn much

from countries worldwide as the energy transition accelerates.

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TheUKandtheenergytransitionLeadingtheway?May2022InsightPaper2TheUKandtheenergytransitionForewordExecutivesummaryChapter1:TheUKandtheenergytransition1.1.Areasofcompetitiveadvantage1.2.KeychallengesChapter2:SolarPV2.1.Aresurgentmarket?2.2.Theevolutionofroutestomarket2.3.Isco-locationsetforthemainstream?Chapter3:Onshorewind3.1.Abumpyroad?3.2.Planningproblems3.3.MakingwayforonshorewindChapter4:Offshorewind4.1.Asuccessstory4.2.Ambitioustargets,enduringchallenges4.3.RealisingthepotentialChapter5:HydrogenandCCUS5.1.Anascentandrapidlyevolvingmarket5.2.Uncertaintycloudsinvestmentdecisions5.3.ExploitingfirstmoveradvantageChapter6:LeadingthewayAboutWombleBondDickinsonAboutCornwallInsightAcknowledgementsContents34712141723273032333TheUKandtheenergytransitionForewordRichardCockburnPartner,HeadofEnergyWombleBondDickinsonTheenergylandscapeisever-shiftingandgeopoliticaleventshaveshoneaparticularspotlightontheUK’senergysystem.Theage-oldenergytrilemmaisinverysharpfocusastheUKlookstodecarboniseitsenergysources,whilstensuringsecurityofsupplyandaffordabilityofenergyuse.TodriveindustryconversationandtohelpourclientsandotherkeystakeholderstounderstandbetterhowwelltheUKisperforminginitsenergytransition,wecommissionedthisreportfromCornwallInsight.OuraimwastobringglobalenergyleaderstogethertodebatethechallengesandopportunitiesfacingtheUKenergysector.Thereportoffersglobalcontext,analysisofdifferentenergymarketsandexpertinsightswhichshinealightontheUK’sprogressintheenergytransition.Throughouttheresearchperiodforthisreport,newvariablescontinuedtobethrownintothemix–theimpactoftheinvasionofUkraine,gassupplyconcernsandnewlegislationandpoliticalstrategieswerejustsomeofthedevelopmentswhicharetypicalofthepaceatwhichtheenergylandscapechanges.Thisreportdrawsonlessonsfromaroundtheglobeanditbecomesincreasinglyclearthatthejourneytonetzeromustbeacollaborativeone.TheUKiswellplacedtoplayakeyroleinglobaleffortstoreducecarbonemissionsoverthecomingdecades.TheUKisaworldleaderinareassuchasoffshorewind,anditisnow–afteryearsofdelay–forgingaheadincarboncaptureandstorageandhydrogen,butitcanstilllearnmuchfromcountriesworldwideastheenergytransitionaccelerates.4TheUKandtheenergytransitionTheUnitedKingdomiswellplacedtoplayakeyroleinglobaleffortstodramaticallyreducecarbonemissionsoverthecomingdecades.AnurgentneedtodecarboniseitseconomywhileensuringsecurityofsupplyispushingtheUKtodevelopdomesticenergysourcesinawaythatisbothenvironmentallysustainableandsociallyequitable.Whilethecountryhaswell-foundedambitionstobecomealeaderinspecifictechnologies,suchasoffshorewind,nuclearandhydrogen,thereisstillaclearrequirementtostrengthensupplychainsandaddresstheuncertaintiesofarapidlychangingmarketforrenewables.Inthisreport,wewillassessthemainopportunitiesandchallengesfacingtheUKwhenitcomestomajorlowcarbontechnologies,suchassolarphotovoltaic(PV),onshoreandoffshorewind,andhydrogen1.Someofthekeyfindingsaresummarisedhere:Netzeroandenergysecurityneedsaresettoturbo-chargeUKrenewables•Overthepastfiveyears,theUKGovernmenthassignificantlyincreaseditsdecarbonisationefforts.TheUKhastheambitionandpotentialtobecomeagloballeader,withnationalbusinessestakingakeyroleinglobalsupplychainsofrenewabletechnologies.•TheconsiderableimpactofinternationaltensionsontheUK’sgasandelectricitywholesaleprices–andthusonconsumerbills–showsthatenergydependenceisfraughtwithrisk.Hence,thereductionofenergydependenceisnowclearlybecomingapolicypriority.•ThiswasreflectedinthepublicationoftheEnergySecurityStrategyinApril2022,whichsetoutpolicyandincreasedambitionsaimedatensuringan“accelerationinenergyindependence”2.•AkeyfeatureoftheEnergySecurityStrategywaspolicybackingfornuclear,offshorewindandlowcarbonhydrogen.ThesetechnologiesareexpectedtobecriticalintheUK’sjourneytowardsenergyindependence.•TheUKcanrelyonitsstrongreputationasafriendlyenvironmentforenergyandinfrastructureinvestment,thankstoitsrobustruleoflawandthetransparencyofitslegalsystem.ExecutivesummaryContractsforDifference(CfDs)willcontinuetoplayakeyroleintheUK’srenewableroll-out.However,themarketwhichCfDsoverlayisuncertain,sotheroleofthisregimemayneedtoevolveinthecomingyears.•ThankstotheCfDregime,theUKcanboastaveryeffectiveschemetosupportrenewablesources,ashighlightedbythesuccessstoryofoffshorewind.ThissupportschemeisheavilyreliantonmarketforcesandlesscostlytothepublicpursethanalternativeapproachesusedinEurope.•WithCfDauctionroundsbecomingannual,theconfidenceofglobalanddomesticinvestorsanddevelopershasbeenfurtherboostedbytheexpectationofahealthypipelineofprojectsacrossdifferenttechnologies.•TheEnergySecurityStrategyproposestoconsultonchangestothe2024CfDauctiontoincentiviserenewableswhileminimisingwhole-systemcosts.ThisaddsuncertaintytotheCfDschemeasthemarketunderlyingtheschemeislikelytobetransformed.•Similarly,theStrategysawtheexpansionoftheUKGovernment’sReviewofElectricityMarketArrangements(REMA)whichmayimpactthoseconsideringfinancingprojects.High-leveloptionsmaybeintroducedbytheReviewincludinglocationalmarginalpricingwhichwouldresultinthemarketbeingturnedonitshead.•Thesepotentialmarketdevelopmentscouldcontributetoasenseofuncertaintyaroundwholesale,networksandbalancingmarketframeworksuntilwegettotheothersideoftheinitiativesintheseareas.•Aswemovetoanewphaseofrenewabledevelopment,drivenbyCfDsaswellasmerchantfinancingmodels,itisessentialthatplanningprocessesarestreamlined,andgridconstraintsareproperlytackled.1Pleasenotethatthecontentofthisreportdoesnotreflectanalysisofreleasesandmarketupdateswhichoccurredafter13April2022,asthecutofftimeforpublicationfinalisationpre-datedthem.2MajoraccelerationofhomegrownpowerinBritain’splanforgreaterenergyindependence-GOV.UK(www.gov.uk).5TheUKandtheenergytransitionTheUKneedsstrongerdomesticsupplychainstounderpinnetzeroambitionsandboosteconomicgrowth•Thecountryhasseenadramaticramp-upofrenewables,howeverthishasnotyettranslatedinthedevelopmentofastrongdomesticmanufacturingsupplychain.•Wecannolongerbankonlearningratesloweringglobalsupplychainprices.Thisisabigchangefromthelastdecadeand,whencombinedwithglobalsupplychainpressuresduetorisingcommoditypricesandincreasingdemand,itisevidentthatsupplychainsareduetosufferupwardcostpressureacrossthe2020s.•Itisessentialthataminimumlevelofequipmentandcomponentsaremanufacturedlocally(boostingsocalled“localcontentrequirements”)toensurethedevelopmentoftheUK’ssustainableenergyinfrastructuresupplychains,tobuildupindustriesandworkforcewithinbothestablishedandlessestablishedtechnologies.TheUKhasthepotentialtobecomeagloballeaderinemergingtechnologiessuchasfloatingoffshorewind•WhiletheUKhasbeenhistoricallysuccessfulindirectinginvestmenttorelativelyestablishedtechnologies,ithasstruggledtodeveloplessmaturetechnologies.•FloatingoffshorewindisatechnologywhichisabouttotakeoffintheUK.Itiskeythatthecountryleveragesthesignificantexpertiseandknow-howthatitacquiredbydevelopingutility-scalefixedoffshorewindoverthelastdecade.•TheEnergySecurityStrategywillhelptopavethewayforthetechnologywithanaimtobringforwardupto5GWoffloatingoffshorewindby2030.•Investorsanddevelopersarebecomingincreasinglycomfortablewithoffshorewindtechnologies,andthereforefloatingwindisalreadysettobecometheUK’snextsuccessstory.•Animportantstepnowisimprovinginfrastructureandpolicyaroundgridconnectiontoaccommodatefortheroll-outofthesetechnologies.5Leadingtheway?TheUKandtheenergytransition6TheUKandtheenergytransitionPolicytoengagecommunitiesisessentialforthefutureroll-outofland-intensiverenewabletechnologies,suchasonshorewindandsolar•Issuesaroundcommunitybuy-inareoftenakeybarrierforthedevelopmentofsolarandonshorewindprojects.•Co-location,agri-renewablesandrepoweringwillallplayimportantrolesinmakingbetteruseoflandavailableintheUK.•TheUKGovernmentanddevolvedadministrationscanplayaroleinintroducingpolicyandschemeswhichencourageaplatformfordialoguebetweendevelopersandlocalcommunities.TheUKisinastrongpositiontogainfirstmoveradvantageinnascenttechnologies,suchaslowcarbonhydrogenandcarboncapture,usageandstorage(CCUS),withindustrialclustersemergingasproductionandconsumptionhubs•Whenitcomestolowcarbonhydrogen,theUKisrapidlydevelopingavibrantbusinessecosystem.ThankstothepublicationoftheHydrogenStrategyin2021,theUKisalreadycatchingupwithitsglobalcompetitors3.•TheEnergySecurityStrategyraisestheUK’sambitionforlowcarbonhydrogencapacityto10GWby2030,withatleasthalfofthistocomefromelectrolytic-enabled,or‘green’,hydrogen.•TheUKGovernmentrecentlyconcludeditsconsultationonlowcarbonhydrogenbusinessmodels.Whileacriticalstepincreatingclarityforthemarketgoingforward,itisnowkeythatthesemodelsarefinalisedandthatfinalinvestmentdecisionsarereachedassoonaspossible.•TheUK’sindustrialclustersaresettobecomeleadinghubsfortheproductionandconsumptionofhydrogenaswellasforthefull-chaindevelopmentofCCUS.However,industriesandinvestorsurgentlyneedclarityonbusinessmodels,sothattheycanmakerelevantinvestmentdecisions.•Theco-locationofsolarandwindassetswithhydrogenandotherstoragetechnologiespresentsconsiderableopportunities,byenhancingtheeconomicsofprojects,optimisinglandconsumption,andcontributingtothestabilityofthegrid.•TheUKneedstofullyexploitfirstmoveradvantageinthecreationofitsownhydrogenandCCUSeconomy.Tothisend,theoilandgasindustryhasaconsiderableroletoplayintheenergytransition,thankstoitsresources,assets,andknow-how.Partnershipsacrossdifferentindustrieswillbeessentialfordecarbonisingtheeconomyatpaceandscale.3Formoreinformation,seeCornwallInsight’sLowcarbonHydrogenIndexwhichrankstheemerginglowcarbonhydrogenplayers,includingtheUK,intermsoftheirpolicyandfinancingfordevelopinglowcarbonhydrogensupplychains.7TheUKandtheenergytransitionAstheworldembarksonthecolossalefforttoreducecarbonemissionsandturnthetideofclimatechange,theUnitedKingdomiswellplacedtotakealeadingrole.TherecentCOP26summit,hostedbytheUKinNovember2021,offeredanidealplatformforthecountrytodemonstratethisleadership,buildingonthecommitmentsreachedduringthe2015ParisClimateAgreement.TheUKGovernmentaimedtoplacenationalbusinesscentrestageattheconference,callingoncorporationsto“[set]outclearpathwaystogettonetzero”andto“helpstartagreenbusinessrevolution”4.Thepowergenerationsectoristhelargestemissiondriverintheglobaleconomy5.Inmanycountries,therehasbeenrapidchangeinrecentyearswiththedevelopmentofrenewableenergysourcesandaccompanyingtechnologyforstorage,aswellasincreasedinterconnectionbetweencountries.Thisprogressisgoingtoneedtoescalateinthefutureasweapproachglobalnetzerotargetdates.Overthelastfiveyears,theUKGovernmenthasrampedupitsdecarbonisationofpowergeneration(seeFigure1).InJune2019,theUKwasthefirstlargeeconomytomakethetargettoreachnetzeroby2050legallybinding6.TheScottishGovernmenttookafurthersteptoexpeditetheachievementofthistargetbymovingthedeadlineforzero-emissionsto2045inScotland7.TheJohnsonGovernmenthasidentifiednetzeroasapillarinitsCOVID-19economicrecoverystrategy,withacorenarrativeof“BuildBackBetter”andastatedcommitmenttobeatthe‘forefrontoftacklingclimatechange’8.AsimilaremphasisonnetzeroispresentintheUKGovernment’s2022EnergySecurityStrategy,publishedinresponsetorecentinternationaltensionsandrelatedvolatilewholesalegasprices.TheStrategyincludesincreasedtargetsforthedevelopmentofsolar,wind,hydrogenandnuclear.WhiletheStrategyenvisagesaroleforthedomesticproductionoffossilfuels,thereisaclearrecognitionthatrenewablesaretheprimaryroutetoensuringtheUK’ssecurityofsupplyissustainableinthelong-term.Chapter1:TheUKandtheenergytransitionNetzerocommitmentsTheglobaltransitiontonetzeroisacorecommitmentintheParisAgreement—alegallybindinginternationaltreatyonclimatechange—adoptedby196partiesatCOP21in2015.Reachingnetzeroentailsreducinggreenhousegas(GHG)emissionstoapointatwhichtheamountgeneratedisnomorethantheamountremoved.TheaspiredoutcomeofthisreductioninGHGemissionsistolimitglobalwarmingtowellbelow2,preferablyto1.5degreesCelsius,comparedtopre-industriallevels.TheIntergovernmentalPanelonClimateChangehascalculatedthatinordertoachievethis,netzeromustbeachievedby2050.TheUKGovernmentadoptedthistargetandmadeitlegallybinding.Scotlandhasbeenaworldleadingjurisdictioninsettingitstargetdatefornetzeroat2045.Figure1:Capacityinstalledpertechnology(MW)UK2011-2020Source:CornwallInsight4COP26seesUKbusinessesleadtheworldinclimatechangecommitments-GOV.UK(www.gov.uk).5Emissionsbysector–GreenhouseGasEmissionsfromEnergy:Overview–Analysis-IEA.6UKbecomesfirstmajoreconomytopassnetzeroemissionslaw-GOV.UK(www.gov.uk).7Climatechange-gov.scot(www.gov.scot).8BuildBackBetter:ourplanforgrowth(HTML)-GOV.UK(www.gov.uk).8TheUKandtheenergytransitionConcernsaroundenergysecurityandinternationaltensionshavealsobroughttotheforeissuesrelatedtoenergyequityintheUK’snetzerotransition.ThepricespikesexperiencedacrosstheUKhavehighlightedtheextenttowhichhighenergypricescanseverelyimpactbusinessesandhouseholds,addingtoinflationarypressuresandthreateningpost-pandemiceconomicrecovery.Inparticular,theimpactofhigherbillsastheenergycaprisescouldresultinfuelpovertyforlow-incomecustomers,plungingthemintothe“eatorheat”dilemma.Hence,itisessentialtoensurethatboththenetzerotransitionandthepursuitofenergyindependencehappen–aspertheever-relevantenergytrilemma(seeFigure2)–atanaffordablecostforconsumersandcitizens.ThefollowingsectionsofthischapterprovideanoverviewoftheareasofcompetitiveadvantageandthechallengesfacingtheUKinrealisingitsambitionsrelatedtothenetzerotransition,beforeweturntoexplorekeytransitiontechnologiesandthelegalandregulatoryhurdlesfordevelopingthesetechnologiesintheUKincomparisontoglobalcompetitors.Figure2:TheenergytrilemmaEnergysecuritySource:WorldEnergyCouncilEnvironmentalsustainabilityEnergyequityConcernsaroundenergysecurityandinternationaltensionshavebroughttotheforeissuesrelatedtoenergyequityintheUK’snetzerotransition.9TheUKandtheenergytransitionAkeycompetitiveadvantagefortheUKasagloballeaderintherenewablessectorisitsreputationforbeingafriendlyenvironmentforenergyandinfrastructureinvestment.Ranked8thgloballyintheWorldBank’sEaseofDoingBusinessrankings9,theUKboastsastrongfinancialcommunitysurroundingtheinfrastructureandenergysectors.Thisecosystemismadeupoffunds,banksandadvisorsbasedintheCityofLondonandacrossthecountry.LawrenceSlade,CEOatmembershipbodyGlobalInfrastructureInvestorAssociation(GIIA),notedthatthisreputationandnetworkhelptheUKtobe‘increasinglypopularfromaninvestor’spointofview’incomparisontoglobalcompetitors.ThisattractivenessoftheUKintheeyesofEnvironmental,SocialandGovernance(ESG)driveninvestorsisfurtherbolsteredbythecountry’strackrecordinencouragingsustainabilityacrossdifferentindustries.BeltonZeigler,PartneratWombleBondDickinson,notedthattheUKis‘atleastadecadeaheadoftheUnitedStates’inESGbusinesspractices.Discussingutilitiesinparticular,headdedthatthisgivesBritishcompanies‘bettergreencredentials’providingthema‘bitofalegup’whenitcomestoattractinginvestment.AstrongruleoflawandrelativelytransparentlegalsystemarefurtherattractivefeaturesforinvestorsanddevelopersconsideringprojectsintheUK.Regardingtheformer,AlejandroCiruelos,ManagingDirectoratQ-Energy,observedthat‘thejurisdictionissafeinthesensethatthereisatrackrecordofprivatecontractsbeingpreservedoverchangesortryingtobeoverriddenbypublicsectorpolicy’,especiallywhen‘comparedtootherjurisdictionsinEurope’.Thereisalsoasenseoftransparencyintermsofsettingregulationandpolicywithopenand,inmanycases,inclusivediscussions.ThiscreatesamorepositiveperceptionoftheUKontheinternationalstage.1.1.AreasofcompetitiveadvantageRenewablesObligation(RO):AtradeablegreencertificateschemeintroducedintheUKin2002asthethenmainpolicymeasuretoencouragethedevelopmentofelectricitygeneratingcapacityusingrenewablegenerationtechnologies.FeedinTariffs(FiT):Apaymentmadetogeneratorsofsmall-scalerenewableelectricitygeneration(totalinstalledcapacity≤5MWforhydro,wind,SolarPVandanaerobicdigestion;≤2kWforCHP)forelectricityproduced.ContractsforDifference(CfD):AgeneratorpartytoaCfDispaidthedifferencebetweenthe‘strikeprice’–apriceforelectricityreflectingthecostofinvestinginaparticularlowcarbontechnology–andthe‘referenceprice’–ameasureoftheaveragemarketpriceforelectricityintheGBmarket.9Rankings(doingbusiness.org).10TheUKandtheenergytransitionFigure4:Timelineofcapacity(MW)awardedpertechnologyacrossUKContractsforDifferenceroundsTheschemehashelpedtofacilitatethereductionoftechnologycostsinwind;thepriceperunitofoffshorewindfellbyaroundbetweenthefirstallocationroundin2015andthethirdin201911.65%Since2014,ContractsforDifference(CfD)havebeenawardedtooverofnewrenewableelectricitycapacity,13GWofwhichisoffshorewind10.16GWInaddition,theUKhaswell-developedpolicyandregulationrelatedtorenewables,underpinnedbytheElectricityActof1989.ThisactintroducedearlysupportforlowcarbonschemessuchastheNon-FossilFuelObligation,whichwaslaterreplacedbytheRenewablesObligation(RO)in2000.Figure3illustratesthecapacityinstalledundereachoftheschemesactiveafter2002.OnedistinctfeatureoftheUKCfDschemeisthatitencouragesparticipationofmarketforcesindecarbonisation,limitingtherelianceoftheseschemesonpublicfunding.TheCfDsupportmechanismhasproventobemoreeconomicallysustainablethanothersusedacrossEuropeandelsewhere,costinglesstothepublicpursethanalternatives,whilefosteringconfidenceamongstinvestors.WhilerecognisingtheadvantagesoftheCfDscheme,theUKGovernmentincludeditasafeatureofthemarkettobereviewedthroughtheREMAinthecomingyear.Allchangestotheschemewillfollowconsultationwiththewidermarket.Figure3:CapacitysupportedundereachGBsubsidyscheme2002-2020andexpectedforecast2022-2038(GW)Source:CornwallInsight,GOV.UKSource:CornwallInsight,LCCC10ContractsforDifferenceandCapacityMarketschemeupdate2020(publishing.service.gov.uk).11Biggesteverrenewableenergysupportschemeopens-GOV.UK(www.gov.uk).11TheUKandtheenergytransitionDespitetheUK’sstrengths,therearealsochallengesindevelopingrenewables.Firstly,theUKhashistoricallydirectedcapitalmoreeffectivelytoestablishedtechnologiesratherthantoemergingtechnologies,limitingthecountry’spotentialinthesenascentmarkets.TheUKGovernment’sobjectiveshavesoughttobalancethecosttotheconsumerwithdecarbonisationgoals.Asnewertechnologies–suchasCCUS,lowcarbonhydrogenandtidalenergy–typicallyhavehighercoststhanmoreestablishedtechnologies,thereisariskofoverlookingtheseindustriesandmissingkeyopportunities.Alackofpolicyclarityaroundthesetechnologiescouldreduceinvestorconfidenceandslowtheirdevelopment.TheBrexitprocesshasalsoposedsomechallengestothedevelopmentofrenewablesintheUK.Followingthereferendumin2016,UKpolicywascentredaroundasuccessfulexitfromtheEuropeanUnion,meaningthatnetzerocommitmentswerenotprioritisedinthenationalagenda.Hence,aperiodofopportunitywasmissedinthelate2010s,withBrexitpartiallyslowingdowninvestmentintotheUKasthestabilityofthecountry’scurrencyandpoliticallandscapewascalledintoquestion.Discussingthis,Q-Energy’sAlejandroCirueloshighlightedthatfollowingBrexittherewere‘certainlimitations’inthe‘amountinternationalcapitalwantedtotakeexposuretosterling’aswellas‘uncertaintyaroundtheimpactonthefinancialservicesindustry’.ArecentreportpublishedbytheHouseofLordsfoundthattheUKGovernmentislikelytomissitstargetofnetzeroby2050,withalackofpolicycohesionandfinancialincentivesbeingakeycauseofthis12.ThereportrecommendedtheestablishmentofaTransformationTaskforcewhichwouldhelptocoordinatetheUK’spoliciesaroundnetzero,workingacrossgovernmentaldepartmentstomonitorandadviseonprogress.ChallengestotheUK’senergytransitionalsoextendbeyondtheUKshoreline.AsillustratedinFigure5,theUKhasbeenanetimporterofenergysincetheearly2000sandthishasmeantthatithasbeenexposedtorecentinternationaltensions,whichhaveledtoariseingasandwholesaleelectricityprices(seeFigure6).Asaconsequence,inlate2021,theUKsawaretailmarketcrisisasaround30domesticandbusinesssuppliersfailedfollowingunprecedentedpeaksincommodityprices.TheapproachtakenbytheUKGovernmentinrespondingtothiscrisisgoingforwardwillimpacttheattractivenessofinvestmentintoenergyinfrastructure.AsrecognisedintherecentEnergySecurityStrategyincreasingrenewablecapacityandstorage,aswellasenhancingnetworks,willlimittheimpactoftheseeventsandensuremorestableandpredictablepricesinthelong-term.Thefollowingchapterswillexplorekeyrenewabletechnologies(solarPV,onshorewind,offshorewind,hydrogen&CCUS),discussingpastandpresentbarriersandstrengthsfordevelopingthesetechnologiesintheUK,aswellastheirfuturepotential.Comparisonswillbedrawnthroughouttointernationalcompetitors.1.2.KeychallengesFigure5:Import/Exportdependencyratio(%)Figure6:Day-aheadpower(£/MWh)andgas(p/th)pricesSource:CornwallInsightSource:CornwallInsight12UKwillmissnetzerotargetwithouturgentaction,warnsLordscommittee-Committees-UKParliament.12TheUKandtheenergytransition2.1.Aresurgentmarket?Inspiteofrelativelylimitedsolarirradiationandsupplyofviablelandcomparedtootherjurisdictions,UKsolarphotovoltaic(PV)developmentsexpandedatpaceinthe2000sandearly2010s.ThiswaslargelyduetotheRenewableObligation(RO)andFeedinTariff(FiT)schemes.BoththeROandFiTweresuccessfulinprovidingasenseofconfidenceandsecuritytoinvestorsanddevelopersofsolarandcostsforthetechnologyhavefallendramaticallysince(seeFigure7).However,this‘boom’wasfollowedbya‘bust’,astheschemeswerephasedoutandreplacedwiththeCfD.SolarwasexcludedfromearlyCfDauctionroundsfrom2015tolate2021,leadingtoastagnationofthemarketoverthisperiod.AsimilarpatternofboomandbustplayedoutacrosstheEuropeancontinentasgovernmentalsupportwaswithdrawnacrossseveralhighlyattractiveandprofitablesolarmarkets.TariffcutshadaparticularlynegativeimpactoninvestorconfidenceinsomeEuropeancountriesduetotheallegedretroactiveeffectsofthecuts.IntheUK’sEnergySecurityStrategy,solarreceivedlessattentionthantechnologiessuchasoffshorewindandhydrogen.TherewassomeambitionwithanannouncementthattheUK’scurrent14GWofsolarcapacity“couldgrowupto5timesby2035”.However,theseplansdonotincludethehardtargetsseenelsewhereintheStrategy.Moreover,theUKGovernmentseesitsrolelargelyinremovingfrictionaroundplanning.Itisbankingoncostreductionwithanexpectationtodeliverthisthroughmerchantinvestment.Chapter2:SolarPV2.2.TheevolutionofroutestomarketThestoryforsolarintheUKdidnotendwiththeclosureofROandFiT.JohnPuddephatt,HeadofLongTermPPAOriginationintheTrading&OriginationUKdepartmentatthedeveloperStatkraft,highlightedthatPowerPurchaseAgreements(PPAs)andCorporatePPAs(CPPAs)havesinceplayedakeyroleinprovidingafixedincometogenerators.ThisroutetomarketwasspearheadedintheUK,withasolarproject–the10MWClayhillsolarprojectwith6MWofco-locatedstorage–asthefirstsuccessfulsubsidy-freePPAtobedeveloped.Meanwhile,thecaseoffullymerchantsolarprojectshasbeenlesspopularintheUKthaninsouthernEuropeancountries,duetotheUK’sweakersolarirradiation.Moreover,concernsaroundpricevolatilitypresentsachallengeforthebankabilityofsolarprojects,oftenpromptingdevelopersandinvestorstooptforroutestomarketwithmorepredictablerevenues.Overthepastfewyears,supportforsolarPVtechnologyfromtheUKGovernmenthasincreased.InJanuary2020,theSmartExportGuarantee(SEG)waslaunched.ItreplacedtheFiTinsupportingsmall-scalerenewableprojects,includingsolarPV,uptoacapacityof5MW.In2021,ground-mountedsolarofover10MWwasincludedintheCfDauctionsintheUK.TheSEGhasalsohelpedtobroadentheroutestomarketforthetechnologyintheUK,offeringopportunitiestocombinemerchant,PPAsandCfDrevenues.Thisisattractivetodevelopersandinvestorswhoprefertoseemultipleofftakeroutes.‘Asadeveloper,whenyoulookatamarketandthere’sonlyoneroutetomarket,thenthat’sarisk’,saidZosiaRiesner,DirectorofPowerMarketsattheglobalsolardeveloper,Lightsourcebp.Hence,themoreoptionsavailableforofftake,themoreconfidencethatcanbebuiltupamongstmarketparticipants.DiscussingtheCfD,SebastianBriggs,PartneratWombleBondDickinson,notedthattheschemehelpstoprovidecertaintyofrevenuecomingin,buildingconfidenceforinvestorsfacingunpredictablefuturedomesticpowerpricesintheUK(seeFigure8).Hewenton,however,toquestionwhetherthe3GWcapforsolarinrecentCfDroundsneedstobehigherasweobservelargerdealscomingthroughataround500MW,raisingconcernsthat‘thecapveryquicklygetseatenup’.Figure7:LevelisedcostestimatesforlargescalesolarprojectsFigure8:ForecastedUKpowerprices,2019-2044Source:BEISDECCS,CornwallInsightSource:BEISDECCS,CornwallInsight13TheUKandtheenergytransitionCo-locationofsolar(orwind)withstorageandelectricvehicle(EV)chargingcansignificantlyenhancetheeconomicviabilityofaproject,byallowingdeveloperstostackrevenuesandthereforecapturemorevalue.Inparticular,co-locatingabatterywithasolarorwindassetcanhelpshifttheload,aswellasreleasingpoweratthemostsuitabletimebasedoncurrentwholesalemarketprices.Italsohasafurtherbenefitofcontributingtothestabilityofthegrid.Aswemoveforwardtowardsapowergenerationmixmadeupofintermittentrenewables‘optimisinghowweareparticipatinginthegridisgoingtobereallyimportant’,andonewayofovercomingthisisby‘providingtheflexibilitythatstoragebringswithsolar’,notedLightsourcebp’sZosiaRiesner.ThisisparticularlyimportantintheUKasshortdaysduringthewinterperiodmeanthatsolarpowercannotbegeneratedattimesofpeakconsumerdemandintheevenings.Despitetheadvantagesofco-location,itisnotasilverbulletanddevelopersfacesomecomplicationsandchallenges.SimonHughes,PartneratWombleBondDickinson,observedthatthe‘legalstructureisnotasstraightforwardasyou’dwant’,particularlywhenhybridprojectsinvolvetwoseparatecompanies.Headdedhoweverthat‘[theseissues]arecurrentlybeingworkedthroughandarenotinsurmountable’.Lightsourcebp’sZosiaRiesneralsodiscusseddifficultieswithco-locationnotingthatbycombiningstoragewithsolar,youare‘changingtheriskprofileoftheproject’astheproject’srevenuestackshiftsfromlong-termcontractstoparticipatingintheshort-termmarket.UKlandscarcityandmixedcommunitysupportforsolarprojectsarealsoissuesthatrequireconsiderationandattention.ChristopherTowner,PartneratWombleBondDickinson,highlightedthat,sincetheUK’sexitfromtheEU’sCommonAgriculturalPolicy,therehasbeena‘lackofclarityfromtheUKGovernmentonwhatitiswe’reactuallyaskingfarmerstodoandthishasexacerbatedissuesoflowconfidenceamongstlocalcommunities’.Hewentontonotethatthe‘trickweseemtobemissingatthemoment[inresolvingthisissue]ispromotingagri-solaraspartofthesolution,sayingthatthereisnotachoicebetweenenergyandland’.Agri-solaroragri-photovoltaics–thesimultaneoususeofareasoflandforsolarpowergenerationandagriculture–hasbeensuccessfulinEuropeancountriesandsomeUSstates,wherefarmsproducingsoft-fruitsandpotatoesareabletoinstallsolarpanelsabovecropsinordertobenefitfromhigherprofits.Q-Energy’sAlejandroCiruelosalsoobservedthattheseapproachesallow‘governmenttofacilitatelocalcommunitiesingettingorganisedthemselvesandgettingprojectsconsented’,encouragingcommunitybuy-inandleadingtomorelandbecomingavailableforsolar.2.3.Isco-locationsetforthemainstream?Thelegalstructureisnotasstraightforwardasitcouldbe,particularlywhenhybridprojectsinvolvetwoseparatecompanies.““14TheUKandtheenergytransition3.1.Abumpyroad?TheUKsawarapidincreaseintheinstalledcapacityofonshorewindintheearly2010sascapitalcostsforthetechnologyfell.Aswithsolar,theinstallationrateofthetechnologystalledafter2017followingitsexclusionfromtheCfDroundsin2015(seeFigure9)whichledtothecancellingofprojectsacrossthecountry.Theintroductionofplanningrestrictionsin2015compoundedthisstagnation,asprojectswhichdidmanagetogetfinancingwerestalledorrefusedattheplanningstagecausingabottleneckofpotentialprojects.Thishasdiscouragedengagementinthemarket:between2016and2020justeightonshorewindfarmapplicationsforneworextendedsitesweresubmittedinEngland,comparedto237applicationsbetween2011and201513.However,theimpactwasnotfeltuniformlyacrossthecountry,asplanningruleshavevariedindifferentjurisdictions(seeFigure10).‘Themarketwasfragmented’,WombleBondDickinson’sSebastianBriggssaid,‘northoftheborderinScotland,there’sasignificantamountofactivityandnewbuilds–inEnglandandWalesit’saverydifferentstory’.IssuesaroundabackloginplanninghavebeenfurtherexacerbatedbyunevennessofcommunityacceptanceforonshorewindfarmsacrosstheUK.TheUKGovernment’srecentSpringStatementsawnewannouncementsforwindtechnologyingeneral:VATwasremovedfromwindturbines,alongwithwaterturbines,andbothtechnologieswereaddedtothelistofenergysavingmeasures14.IntheUKGovernmentEnergySecurityStrategy,whichwaspublishedshortlyaftertheSpringStatement,onshorewindreceivedlittleattentionanddetailincomparisontooffshorewind.Whereonshorewindwasdiscussed,therewasarecognitionoftheneedtoengagebetterwithcommunitiestosimplifyplanninganddevelopmentprocesses,asthefollowingsectionsofthischapterwillexplain.Figure9:Annualcumulativeinstalledcapacity(MW),UK,2009-2020Source:GOV.UK,CornwallInsightChapter3:Onshorewind2016>20202011>2015onshorewindfarmapplicationsforneworextendedsitesweresubmittedinEnglandonshorewindfarmapplicationsforneworextendedsitesweresubmittedinEngland823713RenewableEnergyPlanningDatabase:quarterlyextract-GOV.UK(www.gov.uk).14SpringStatement2022speech-GOV.UK(www.gov.uk).15TheUKandtheenergytransition3.2.PlanningproblemsRegulatorybarriersforonshorewindcontinuetobeakeychallengefacingthetechnology,compoundedbydifferencesinScottish,EnglishandWelshplanningrequirements.Akeybarrieremergingfromtheplanningrestrictionshasbeentherequirementforprojectstobeagreeduponbylocalcommunities.Historically,inmanycasesithasbeendifficulttoengagewithcommunitiesintheUKregardingonshorewinddevelopments.Rapidlydecliningcostsintheearly2010shavemeantthatthefew‘low-hangingfruit’siteswhichhadsuitableplanningpermissionandgridconnection,havealreadybeenbuilton.WombleBondDickinsonPartnerAnthonyAldermannotedthatthereisamarketperceptionthatthosesitesthat‘areleftarequitechallenging[…]onceyoulookatthesiteinmoredetail,youdiscoverallthereasonswhyeveryoneelsediscardedit’,andasaresultdevelopersandinvestorsarediscouragedfromdevelopingonshorewindprojects.Repoweringbyinstallingmoreefficientturbinesonexistingsites,canofferopportunitiesforprojectownerstoincreaserevenues.Whatismore,repoweredprojectsmayhaveaneasierridethroughtheplanningprocesswithlocalcommunities.RegardingCfDs,onshorewindwasincludedinthescheme’slatestauctionroundforthefirsttimesince2015.Supportforthetechnologyhasbeencappedat3.5GWofeligiblecapacity,giventhegreaterfocusoftheUKGovernmentonscalingupoffshorewindandthelargeproportionofbudgetwhichthattechnologyinevitablytakesup.Inajointresponse,communityenergygroups15fromacrosstheUKwelcomedthere-inclusionofonshorewindinUKCfDs,thoughwentontoencouragemoreattentiontodevelopingschemesdirectlyrelatedtosupportinglocalgeneration16.Afurtherchallengefacingonshorewind,aswellassolar,hasbeengridconstraints.Limitedaccesstothegridmakesprojectsthatwouldotherwisebehighlyattractivechallenging.SimonHughes,PartneratWombleBondDickinson,observedthatthisisaparticularriskforpotentialsitesinmid-Wales,a‘primaryareawherethereisastrongwindresource’butacongestedgrid.Figure10illustratesthelimitedinstalledcapacityinWalesincomparisontoEnglandandScotland.OnshorewindhasalsocomeintoconflictwithanumberofotherUKsectors.Firstly,aviationhasoccasionallyblockedthedevelopmentofonshorewindprojectsduetoclasheswithflightpaths.Thisproblemisonlylikelytogrowasturbinesgetbigger.Secondly,onshorewind,likesolar(asmentionedinsection2.3),isaland-intensivetechnologywhichwillincreasinglycompetewithotherformsofagricultureandforestryintheUK.JamesSamworth,PartneratGreencoatCapital,arenewablesinvestmentmanagementfirm,observedthatthiswillexacerbatethe‘bottleneckindevelopment’forthetechnology.ThisissuehasbeenfurthercompoundedbythedepartureoftheUKfromtheEUandtheresultinguncertaintiesaroundsupplyanddemandfortheagriculturalsector.Figure10:Annualcumulativeinstalledcapacity(MW)ofonshorewind,UKjurisdictions,2008-2020Source:GOV.UK,CornwallInsight15Communityenergygroupsarenot-for-profitorganisationswhichsupportthedeliveryofcommunity-ledrenewables,whetherwhollyownedand/orcontrolledbycommunitiesorthroughpartnershipwithcommercialorpublicsectorpartners.161591032846_ContractsforDifference_CEECESCEWresponse.pdf(communityenergyengland.org).16TheUKandtheenergytransitionAsthereisanincreasingconsensusthatthedevelopmentofonshorewindwillbecriticaltotheUK’senergytransition,anumberofchallengeswillneedtobetackled.Firstly,thereisaneedtoupgradetheexistingUKgridtomanageonshorewindfarms.Suggestionsforaddressingthisincludeprovidingincentivesforthegridtoopenupcapacitymorequicklyandprovidingbalancingmeasuressuchasenergystorage.ThefirstoftheseareasforimprovementwasaddressedintheEnergySecurityStrategywhereassurancesweremadeforOfgemto“dramaticallyreducetimelinesfordeliveringstrategiconshoretransmissionnetworkinfrastructurebyaroundthreeyears”.TherearecertainregionsoftheUKwhereeffortsshouldbefocusedtoresolvegridchallenges,suchasinmid-Waleswherewindresourceishigh,butgridcapacityisinsufficient.Asrenewablepowercapacityissettoincreasesubstantially,thisissuewillbecome‘muchmoredifficultovertime’observedCharlotteEddington,InvestmentsDirectoratdirectinvestmentplatformAbundanceInvestment.LessonscanbetakenfromGermany,acountryleadinginonshorewindcapacity(seeFigure11),butwhichalsofacesgridblockages.TheGermanGovernmentislookingtoaddressblockagesinthenorthernregionthroughtheirhydrogenstrategywhichemphasisestheuseofelectrolysercapacitytoconvertnorthernwindpowertohydrogenwhichwillbesentsouthinpipelines.Aswithsolar,co-locationofonshorewindwithstorageisanappealingoptionformaximisinggridcapacityandsmoothingthecurveofintermittentgeneration.WombleBondDickinson’sSimonHughesnotedthat,‘amongstdevelopers[co-location]hasbeenarealhottopicoverthelast12months’.Facilitatingenhanceddialoguewithruralcommunitiesandtheaviationsectorisalso‘somethingtobemindfulof’,asWombleBondDickinson’sPartnerSebastianBriggsnoted.Dialoguewillensurethatprojectapplicationsarelesslikelytobeslowedorfailattheplanningstage.TheEnergySecurityStrategyrecognisedthisissue,withspecificmeasurestobetakenineachareaofthecountry.InScotland,theUKGovernmentwillworkwiththeScottishGovernmenttoensurecommunityandlandscapeissuesareconsidered.InWales,theUKgovernmentwillsupportworkalreadyunderwaybytheWelshGovernment.Meanwhile,inEnglandthereareplansfor‘partnershipswithalimitednumberofsupportivecommunitieswhowishtohostnewonshorewindinfrastructureinreturnforguaranteedlowerenergybills’.VictoriaRedman,PlanningPartneratWombleBondDickinsonsaid,‘anyeasingofplanningrestrictionsforonshorewindinEnglandiswelcomebutchallengesstillremain’.Applicationswillstillneedtogainthesupportofthelocalcommunity,soevidenceofcompliancewithenvironmentrequirementsandcertaintyonaccessingagridconnectionwillstillbeessential.France’sconceptofdébatpublic(publicdebate)couldprovideapotentialtemplateandinDenmarkpolicymeasureswereintroducedinthePromotionofRenewableEnergyAct200917toencouragecommunityownershipofwindfarmprojects.Communityengagementwillalsobenefitdeveloperslookingtorepoweronshorewindassets.ThiswillbeofincreasingimportanceasanumberofprojectsintheUKarenearingtheendoftheirlifetimeandareduetoroll-offtheCfDsupportscheme.Insomecases,repoweringwillinvolveincreasingaproject’scapacity,potentiallyexacerbatingissuesaroundthevisualimpactonlocalcommunities.Therefore,engagingwiththesecommunitieswillallowforsmootherimplementationoflifeextensionprocesses.Moreover,regulatorychangescanalsohelptofacilitatetheshifttorepoweringintheUK.LessonscanbetakenfromGermanywhererepoweredcapacityiseligiblefornewsubsidiesundertheEEG,thecountry’sRenewableEnergyAct18.Finally,UKsupplychainsneedtobebetterdeveloped.Atpresent,muchofthemanufacturingforonshorewindprojectsisdoneabroad,underminingtheUK’smanufacturingsectors.TherecentinclusionofsupplychainrequirementsinRound4CfDprocessesshouldhelptoabatethisissue,asCfDapplicantswithgenerationcapacityof300MWormorewillberequiredtocompleteandhaveapprovedaSupplyChainPlanquestionnaire.Nonetheless,issuesaroundsupplychainsremain.WombleBondDickinson’sSimonHughesflagged,forinstance,that‘nosettimetableiscreatinghugedifficultieswithinthesupplychain’.Figure11:Generationcapacity(GWh)Germany,Denmark,UnitedKingdom3.3.MakingwayforonshorewindSource:Eurostat,CornwallInsight17FAO.org.182009AmendmentoftheRenewableEnergySourcesAct(EEG2009)–Policies-IEA.17TheUKandtheenergytransitionFigure13:LCOE(£/MWh)estimatesforoffshorewind2020-20454.1.AsuccessstoryTheUKisagloballeaderinoffshorewindwith14GWofoffshorewindeitherfullycommissionedorunderconstructionandanambitiontoincreasethisto50GWby2030,with5GWofthistobefromfloatingoffshorewind19.AsFigure12illustrates,theUKhasbeenleadinginEuropeforinstalledcapacityacrossthepasthalf-decade.LisaRushton,PartneratWombleBondDickinson,notedthatfortheUS‘therearesomelessonstobelearnedfromtheUK’intermsofhowto‘implementthetechnology’,‘connectenergybacktotheonshoregrid’and‘expeditepermitting’.WombleBondDickinsonPartnerBeltonZeiglerconcurredwiththis,addingthatwhilethetechnologyitselfcanbeacquiredbytheUS,‘bringingtheseprojectsup’requirestakingonthe‘know-howandpracticalexperiencefromtheUK’,whichcouldhelptheUnitedStatesto‘jumpstartthisbusiness’.ThetechnologyformsanintegralpartoftheUK’slegallybindingcommitmenttoreachnetzerocarbonemissionsby2050andoftheUKPrimeMinister’sTenPointPlanforaGreenIndustrialRevolution.Between2016and2021,investmentinthesectorwasaround£19bn,sothesetargetswillprovidevitalmarketsignalstosecurebillionsininvestment,withover£10bn/year20tobeinvestedinthesectorbetween2021and2026.TheOffshoreWindSectorDealinMarch2019alsoprovedtobeanotherkeysignalforinvestors,ashastheemphasisonthetechnologyintheUKGovernment’srecentEnergySecurityStrategy.TheCfDschemehasboostedthesuccessoftheUK’soffshorewindindustry.Since2015,contractshavebeenawardedthroughaseriesofcompetitiveauctionsknownasallocationrounds.AspartofthelatestCfDauctionround,theUKGovernmentannounced£200mtosupportoffshorewindprojectsandhelpensurethe40GWofoffshorewindcapacityisreachedby2030.Theschemehasdeliveredsubstantialnewinvestmentandcontributedtosignificantlyreducingthecostofoffshorewindbyaround65%since2015.TheScotWindleasingroundshavealsobeenasignificantcontributortothescaleupofoffshorewindintheUK21.Itsoutcomewasannouncedinearly2022,markingitasthefirstroundofOffshoreWindLeadinginScottishwatersforadecade.17projectswereselected–totalling25GWofcapacity–andhavebeenofferedagreementstoreservetherightstospecificseabedareas.Lookingforward,theLevelisedCostofElectricity(LCOE)forthetechnologyintheUKissettodeclinefurtheroverthenextdecadesdroppingbelowtheLCOEofonshorewind,amoreestablishedrenewabletechnology,in2035(seeFigure13).Chapter4:OffshorewindFigure12:Installedcapacityofoffshorewind2009-2020Source:CornwallInsight,EurostatSource:CornwallInsight,GOV.UK19MajoraccelerationofhomegrownpowerinBritain’splanforgreaterenergyindependence-GOV.UK(www.gov.uk).20OffshoreWind:BuildingontheUK’sSuccess,November2021,OWIC.21ScotWindoffshorewindleasingdeliversmajorboosttoScotland’snetzeroaspirations-News-CrownEstateScotland.18TheUKandtheenergytransitionThegoalof50GWofoffshorewindby2030willrequireanambitiousinstallationtargetofaround2GWofoffshorewindeachyear.Thereareconcernsaroundtheeffectivenessofthecurrentregulationandpolicyinplacetosupportthis.TheOffshoreTransmissionOwnerregimehasbeeninplacesince2009andprovidesacompetitivetenderprocessthroughwhichoffshoretransmissionassetsaresoldandlicencesaregranted.Currentlytheoffshoretransmissionassetforeachsiteissoldviathisprocesstotransmissionownersunderlong-termlicencesandlinkstheoffshoregenerationtotheonshorenetwork.Acommoncriticismisthattheconnectionofoffshorewindfarmstothegridnetworkwithmanyredundantcablesisnoteconomicallyefficient,andrisksalienatinglocalcommunities.Whenoffshorewindwasstillanemergingindustry,individualsiteconnectionsweredeemedtobethebestwayforward.However,WombleBondDickinson’sSebastianBriggsnotedthat,astheindustryhasincreasedinsize,thisapproachhasprovento‘notbeterriblyefficient’.Inparticular,theproject-specificapplicationofinfrastructureconnectingassetstothemainlandisnotsufficientlyjoined-up,andthislackofcohesionisproblematicgiventheambitionsforscalingupoffshorewind.Progressinthisareaisbeingmadeatpresent.OfgemandBEISareundertakingworkonthemultipurposeuseofinterconnectorsandonstrategicplanningfortheoffshoretransmissionsystem,andtheoutcomeofthisworkwillbecriticalinrealisingtheUK’soffshorewindpotential.Moreover,theEnergySecurityStrategyincludedtheestablishmentofaFutureSystemOperator,aswellasthepublicationofwhole-systemblueprintsfornetworksincludingtheHolisticNetworkDesign(HND)andCentralisedStrategicNetworkPlan.TheHNDwillidentifythestrategicinfrastructureneededtodeliveroffshorewindby2030.Morebroadly,withthetechnologytakingsuchanintegralroleintheUK’snetzerogoals,questionsneedtobeaskednowaroundwhether‘ourplanningandpermittingisactuallyinstepwithourpolicydirectionoftravel’,notedGIIA’sLawrenceSlade.IncontrastwiththescaleofambitionintheScotWindleasinground,thelatestEnglandandWalesCrownEstateoffshorewindleasingroundrepresentsjustunder8GWofpotentialnewcapacityanddevelopershavevoicedsomefrustrationthatmoresiteswerenotmadeavailable.Thisissignificantlylowerthanthe32GWthatwassecuredintheRound3leasingroundin2010.However,thisispartlycounteredbythefactthattheCrownEstatecarriedoutalotofupfrontworktonarrowdownthesitesavailableforbidding.Thiswasdonetoensurethatthesitesincludedintheprocesswerethosewiththebestchanceofultimatelybeingdevelopedsothattheriskofsitesfallingawaylateronintheprocesswasreduced.ItisclearfromtheoutcomesofbothScotwindandRound4thatthereisacommercialappetitefromtheindustrytobidforsitesandanincreasednumberofinteresteddevelopers.Thisinterest,combinedwiththeauctionapproachadoptedinbothprocesses,hasresultedindeveloperspayingmuchmoreforsitesthantheyhadinpreviousrounds.Thehighercoststaketheformofannualoptionfeeswhichwillcontinuetobedueuntilasiteisactuallyreadyforleasingandconstruction.Whileinsomesensesasuccess,thesehighercostswillinevitablybepassedontoconsumersattheendoftheday.WombleBondDickinson’sAnthonyAldermancommentedthat‘securinganoptionoverasiteisonlythefirststepintheprocess,gettingtothepointwhereadevelopercanmakeafinalinvestmentdecisionanddrawdownitsleasemeanssecuringitsDevelopmentConsentOrder(DCO)andotherconsents,securinggridconnectionandsecuringaCfD,allofwhichincludesignificantelementswhichareoutsidethecontrolofdevelopers.Thescaleoftheoptionfeesbeingpaidwillbringfargreaterscrutinyonanydelaysoruncertaintyintheseotherpartsoftheprocess.’4.2.Ambitioustargets,enduringchallengesIsourplanningandpermittingactuallyinstepwithourpolicydirectionoftravel?19TheUKandtheenergytransitionWombleBondDickinson’sVictoriaRedmanwentontosaythatthereisnoreasonwhytheCrownEstatecan’topenmoreleasingroundswithanincreasedfrequencyinordertoachievetheUK’stargets.Therearealsoseparatearrangementsavailableforfloatingwindwhichcanalsosupportenhancedcapacityintheyearstocome.Anotherchallengeforthegrowingoffshorewindsectoristhelackofadomesticsupplychain.WhilsttheUKisagloballeaderinoffshorewind,thedomesticmanufacturingcapabilityofwindturbinesandtheircomponentshasbeenlimitedandthedevelopmentofthistechnologyalsorisksbeingamissedopportunityforwidersupplychainsinthecountry.Therefore,thefullbenefitofthegrowthoftheoffshorewindsectorhasnothistoricallybeenfeltasitcouldbe,andthemajorityofthemanufacturingisdoneoverseasincountriessuchasGermanyandDenmarknotnecessarilyequatingtojobcreationintheUK.Astheindustryscalesup,itisimportantthatweapproachthisinaway‘thatthevalue-addedcomponentsoftheR&Dandinnovationstaywithinthecountry’,notedQ-Energy’sAlejandroCiruelos.Bolsteringthesedomesticsupplychainsisnowmoreimportantthanever.Theincreaseinambitionforoffshorewindtoreach50GWsby2030willplaceadditionalpressureonthecurrentsupplychain.Thispressurewillbecompoundedbytheglobalsupplychainsqueezeonkeymaterialsforwindfarmsandbyapotentialplateauingofcostreductions.Thisissueofupwardpressureonsupplychaincostswillimpactcountriesacrosstheworldanditwillbekeyforgovernmentstoensuretheirregulationandpolicyrespondsappropriately.FreeportssettoboostcleanenergysupplychainsFreeports,definedbytheUKGovernmentasspecialareaswithintheUK’sborderswheredifferenteconomicregulationsapply,couldsignificantlyenhancetheUK’srenewablesupplychains.EligiblebusinessessituatedinFreeportsaresettobenefitfromarangeoftaxincentives,creatingopportunitiesforcompaniesthatmanufacturecomponentsandsub-componentsforsustainableinfrastructureandcleanenergy.Synergiesbetweenfreeportsandrelevantindustrialclustersarehopedtocreateandstrengthendomesticsupplychains,encouragingtheemergenceofworld-leadingrenewablepowerhouses.WombleBondDickinson’sRichardCockburnnotedtheroleofthenewEnergySecurityStrategyinfurtherestablishingaroleforfreeportsintheUK,giventheincreaseinenergyfromoffshorewindto50GWby2030‘whichstrengthensfurtherthebusinesscaseforScottishGreenFreeports’.Headdedthat‘TheannouncementaboutdoublingthehydrogentargetalsostrengthensfurtherthebusinesscasefortheScottishCluster–theoriginalScottishbidlostouttocompetitioninthefirstwaveofnetzeroclustersattractinggovernmentsupport.’.TheTeessideandtheHumber,whicharealreadyleadingoffshorewindclusters,areespeciallywell-placedtoattractinvestment,withgrowthexpectedespeciallyinthemanufacturingofturbines,bladematerials,monopilesandnacelles.Scotlandhasrolled-outajurisdiction-specific‘GreenFreeport’model.Operatorsandbusinessesinzonedareascanbenefitfromapackageoftaxandotherincentivesthroughacombinationofdevolvedandreservedlevers.UptotwoGreenFreeportdesignationswillbeawardedinScotlandthroughanopen,transparentandcompetitiveprocess.Abiddingprocesswillbegininthespring,anditishopedthenewsiteswillopenin2023.20TheUKandtheenergytransitionWhiletheUKisagloballeaderinthetechnology,withcomparativelyhighoffshorewindgenerationcapacity(seeFigure12),thereisstillsignificantpotentialtobeharnessed.TheUK’scoastlineisparticularlywellsuitedtofixedbaseoffshorewindfarms,whichgenerallyrequireseadepthsof60morless.SantiagoBlanco,ExecutiveVicePresidentandRegionalDirectorattheindependentengineeringandriskmanagementfirm,DNV,highlightedthat,incomparisontoSouthernEuropeanstates,the‘geographyoftheUKallowedthecountrytocontinuedevelopingoffshorewindinamuchmorecompetitiveway’.HehighlightedtheadvantagesoftheseabedsurroundingtheUKcoastlineforfixedbaseoffshorewind.Moreover,thisadvantagehasbeenfurtherstrengthenedduetothedetailedenvironmentalsurveys,mappingandtrackingdoneofthecountry’sseabedprimarilyfromthelong-establishedoffshoreoilindustry.Thiswealthofpreviousresearchallowsfordeveloperstoassesstechnicalconditionsaheadofstartingthedesignofoffshorewindprojects.ThereareanumberoffocusareasfortheUKtoensureitmakesthemostofthisnaturaladvantagebothforthebenefitofitsgenerationmixandforwidersupplychains.Inthecaseofregulation,theUKhasrecentlyimplementedsomeimportantchangeswhichwillencourageinstallationfrequencyandsupplychainexpansion.In2021majorinvestmentannouncementstotallingover£900mweremadeintheUKoffshorewindmanufacturingsector,thegreatestlevelsincetheindustrybegan.Morerecently,intheUK’sEnergySecurityStrategy,itwasannouncedthatthenewtargetsforoffshorewindcapacitywouldsupport90,000jobsintheindustry,30,000morethanpreviouslyexpected22.TheOffshoreWindGrowthPartnershipawarded76supplychaincompaniesgrantsalongsidebusinesssupporttotalling£4.5maspartoftheoffshorewindindustry’scommitmenttoincreaseUKcontentto60%by203023.Priortothis,domesticcontentrepresented48%oftotalUKoffshorewindprojectvalueonalifetimebasis24.Theincreaseinlocalcontentwillprovideaboosttodomesticsupplychainmanufacturingofoffshorewindinfrastructureandincreasethenumberofjobsinthesector.4.3.Realisingthepotential22MajoraccelerationofhomegrownpowerinBritain’splanforgreaterenergyindependence-GOV.UK(www.gov.uk).23AboutOWGP-OffshoreWindGrowthPartnership.24OffshoreWindIndustryInvestmentintheUK:2017ReportonOffshoreWindUKContent,RenewableUK.Ataglance£900MtotalinvestmentsmadeintheUKoffshorewindmanufacturingsectorin2021.76supplychaincompaniesgrantsawardedbytheOffshoreWindGrowthPartnership,alongsidebusinesssupporttotalling£4.5m.90,000jobsannouncedintheUK’sEnergySecurityStrategytosupportthenewtargetsforoffshorewindcapacity.60%increasetoUKcontentby2030committedbytheoffshorewindindustry.21TheUKandtheenergytransitionThedomesticsupplychainisalsosettobenefitfromchangesmadetotheCfDallocationrounds.FromCfDAllocationRound4allapplicantsforageneratingstationwithagenerationcapacityof300MWormorewillberequiredtoprovideastatementfromtheBEISSecretaryofStatetoNationalGridESOapprovingtheirSupplyChainPlanfortheproposedgenerationasset.Theaimofthisprocessistoencouragecompetitive,productive,andefficientsupplychainsforlowcarbonelectricitygenerationprojectsandtoaccelerateinvestmentsinestablishedandlessestablishedlowcarbontechnologies.Meanwhile,themorerecentannouncementinFebruary2022thatCfDauctionswouldbecomeannualhasbeenreceivedpositivelybymarketplayers.GreencoatCapital’sJamesSamworthobservedthat‘whatmarketswantispredictability’.Theshifttoannualauctionroundshelpstoprovidethis,givingplayersacrossthesupplychainconfidenceandcertaintythattherewillbeasteadypipelineofprojectscomingtomarket.Itwillalsohelpacceleratethedeploymentoflowcarbonelectricitygenerationandsupportinvestmentinthesectorbyleveraging£90bnofprivateinvestmentby2030.ThenextandfirstoftheannualauctionswillopeninMarch2023.Asoffshorewindprojectsrampupthereisaneedforholisticthinkingregardingthedevelopmentoftheoffshoregrid,particularlyintheNorthSea.LauraRolo,OffshoreWindTechnicalLeadSEMELAatDNV,observedthatatpresentthereisaperceptioninthemarketthat‘alackofplanning’hasresultedin‘areasbeingcongested’.Ratherthanindividualsite-to-beachconnections,amoreunifiedapproachneedstobeconsideredwithbetterconnectionsamongassets,wherebyagroupofsitesareconnectedandthenjoinedtothegrid.TheseissueshavebeenrecognisedbytheUKGovernmentthroughtheOffshoreTransmissionNetworkReview(OTNR)25.Itiscriticalthatthedeliverablesidentifiedinthisreviewareachievedatpaceinordertokeepupwiththetechnology’srapidroll-out.ThereisalsopotentialforaNorthSeaoffshorewindgridthatisinterconnectedwithEurope.ComplexitiesarisewithregardtoBrexit,butefficiencywouldbeimproved.NationalGridVenturesandDutchtransmissionsystemoperatorTenneTsignedanagreementinSeptember2020toinvestigatethefeasibilityofdevelopinganinterconnectortoconnectupto4GWofBritishandDutchoffshorewindwhichwouldprovideadditionalcapacityof2GWbetweenthecountries.Thecompaniesaimtodeliveranoperationalassetby2029.WiththeUKtargeting40GWofoffshorewindby2040andtheDutchtargeting11.5GWby2030,withafurther20-40GWby2050,notonlywillsignificantamountsofinfrastructureberequired,butalsoacloseco-operationbetweencountriesaroundtheNorthSea.Reducingtheinfrastructurerequiredtomeetsuchtargetswillalsomitigatetheenvironmentalimpactsoncoastalcommunities,comparedtothecurrentapproachinwhichinterconnectorsandwindfarmsaredevelopedandconnectedseparately.Otherpotentialprojectsarelookingatthepossibilityofan‘energyisland’or‘energyhub’ofoffshorewindfarmsintheNorthSeathatconnectstonorth-westEuropeancountries.Aswemoveforwardswiththeseoffshorewinddevelopments,itisnecessarythattheconsentingprocessintheUKissimplified.WombleBondDickinson’sSebastianBriggshighlightedthat,initsdesign,theDCOprocesswasbasedaroundafixedtimeline,howeverthisorderhaswanedovertime.WombleBondDickinson’sVictoriaRedmanwentontosaythattheprocessstartedoffreasonablyefficient.However,overtimeprojectscontinuedtogetmorecontroversial,particularlyduetothevolumecomingfromtheeastcoastoftheUK.Challengesaroseasspecificcommunitieswereaskedtohosttheonshoreinfrastructureneededtosupportmultipleoffshorewindprojects,resultinginlengthlyperiodsofconstructionworksfortheirlocalareas.25Offshoretransmissionnetworkreview-GOV.UK(www.gov.uk).It’snecessarythattheconsentingprocessintheUKissimplified.22TheUKandtheenergytransitionThisispartlywhytheOTNRistakingplace.TherealsoneedstobeahugeamountofreinforcementalongtheEastCoastfromNationalGridwhichwillresultinhundredsofkilometresofnewoverheadpowerlinesinordertogetthepowerfromtheoffshorewindfarmstowhereitneedstobe.ThisisonlypartofthejigsawthatneedstobesolvedinorderfortheUKtoachieveitsnetzeroambitions.WombleBondDickinson’sVictoriaRedmanaddedthatlocalcommunitiesaredemandingamorecoordinatedapproachwhenitcomestotheonshoreinfrastructureneededforoffshorewindfarms.They’reseeinglotsofradialconnectionsforindividualoffshorefarmswhichhasthepotentialtoincreaselocalimpactsandisn’tveryefficient.Intheinterim,sherecommendsdevelopershaveaclearapproachtocooperationattheoutset.Engagingwithlocalcommunitiestoexplainhowcumulativeconstructionimpactshavebeenminimisedandbenefitsoptimised,throughtheirapproachtojointworking.Withregardstolengthyplanningprocesses,theUKGovernment’sEnergySecurityStrategyhasbroughtaboutsomereformstotheplanningprocessesincluding‘cuttingtheapprovaltimesfornewoffshorewindfarmsfrom4yearsto1year’andanoverallstreamliningwhichwill‘radicallyreducethetimeittakesfornewprojectstoreachconstructionstageswhileimprovingtheenvironment’.Nonetheless,itisimportanttocontinuetomakeeveryefforttoensuretheapproachbecomesmoreefficient,inordertofostercertaintyandstabilityofUKconsentingregimes.SebastianBriggswentontoaddthatwithoutthisstreamliningoftheprocess,thereisariskthatpotentialinvestorslookabroadtocountrieswherethereisgreatercertaintythataprojectwillpasstheconsentingstage.Britishoffshorewindcapacityislikelytoalsobeexpandedfurtherfromthecoastlinewithfloatingoffshorewindturbines.Statkraft’sJohnPuddephattnotedthatthedeploymentoffloatingoffshorewindwillbeadvantageousasitcanbedeployedindeeperwatersthanconventionalturbines,‘openingupareasoftheseabedwhereoffshorewindmightnothavebeenpossiblebefore’.InJanuary2022itwasannouncedthatfloatingoffshorewindprojectsintheUKwouldreceiveover£60minpublicandprivateinvestmenttodevelopthenewtechnologyaspartoftheFloatingOffshoreWindDemonstrationProgramme.Notingthesignificantcontributionitcanmake,CfDallocationRound4ringfenced£24mforfloatingoffshorewindprojects.WombleBondDickinson’sAnthonyAldermanechoedtheearlierpointthatfloatingoffshorewindopensupnewareasthatwillsupporttheUK’sambitionsbeyondthe40GWby2030target,astheClimateChangeCommitteehaveindicatedthat65GWto125GWwillberequiredby2020.Thesedeep-waterareaswouldhavebeenpreviouslyexcludedfromtraditionalfixedturbineoffshorewindfarmsandincludesitesoffWalesandScotland.WombleBondDickinson’sVictoriaRedmanaddedthatfloatingoffshorewindalsosolvessomeofthechallengeslinkedtotheHabitatsRegulationAssessment.Asprojectsmovetodeeperwaters,thentheimpactonforagingbirdsbecomeslessofanissuewhichultimatelyavoidssomeoftheproblemsthatdevelopersandapplicationsarefacingclosertoshore.DavidHarradine,ExecutiveDirectorofProjectFinanceatDutchbankABNAmro,highlightedthat‘floatingoffshorewindshouldbeaquickerscaleup’comparedtothehistoricscaleupoffixed-baseoffshorewindasitonlyrequiresaltering‘onefeatureofthetechnologyintermsofthedifferentfoundationtype,asopposedtoitbeingawholenewsector’.Hence,projectsmaybeperceivedasmorebankableastheworkrequiredtounderstandtheriskfactorsassociatedwiththetechnologychangewillbereduced,resultinginafasterroll-outandultimatelycostsforthetechnologyshoulddecreaseatabetterpace.Finally,co-locationofassetsalsopresentsmanynewopportunitiesforthewideroffshorewindsector.TheCrownEstatehasbegunfacilitatingworktoidentifythekeychallengesandopportunitiesassociatedwiththeco-locationofoffshorewindandCCUS.Meanwhile,opportunitiesarealsobeingassessedfortheco-locationofoffshorewindandhydrogen(discussedfurtherinthenextchapter).23TheUKandtheenergytransitionChapter5:HydrogenandCCUS5.1.AnascentandrapidlyevolvingmarketWhilethereisagrowingglobalconsensusabouthydrogen’spotentialroleintheenergytransition,thereisstillasignificantdegreeofuncertaintyaroundusecases.Lowcarbonhydrogencanconsiderablycontributetodecarbonisingheavyindustry,transport,andheat,andcanprovidelong-durationenergystorage.Butinallthosecases,policycommitmentsandadequatesupportschemesareessentialtosupportthenascenthydrogeneconomy.Astheglobaldevelopmentoflowcarbonhydrogensolutionsisstillinitsinfancy,theUKcurrentlyhastheopportunitytogainfirstmoveradvantage.TheUKiscurrentlyamongonlyahandfulofcountries–alongsidethelikesofJapan,SouthKorea,Germany,andSaudiArabia–thataredevelopingtangibleplanstocreateahydrogensupplychain.AcrossthepastfewyearstheUKgovernmenthasrampedupitspublicationofpolicyandstrategydocumentsrelatedtolowcarbonhydrogen.InAugust2021,theUKpublisheditsmuch-awaitedHydrogenStrategy,alongsideaconsultationonbusinessmodelsforlowcarbonhydrogenwhichconcludedinApril2022.InApril,thehydrogeninvestorroadmapwasalsopublished,aswastheUK’sEnergySecurityStrategy,whichdiscussedaroleforlowcarbonhydrogen,increasingcapacityambitionsfrom5GWby2030to10GWbythesameyear.AspartoftheUK’stwin-trackapproachatleasthalfofUK-producedhydrogenwillcomefromelectrolysisandtheotherhalffromCCUS.IndustrialclustershavebeenidentifiedaskeydemandcentresforlowcarbonhydrogenandhencewillhaveasignificantroletoplayindevelopingtheUK’slowcarbonhydrogensupplychains.5.2.UncertaintycloudsinvestmentdecisionsQuestionsaboutthefuturedevelopmentoftheglobalhydrogeneconomyabound.Crucially,itisnotclearhowexactlyfutureglobalsupplychainsoflowcarbonhydrogenwillevolve.WhilesomecountriessuchasAustraliaaremakingstridestobecomeglobalhubsfortheproductionofhydrogen,thereislittlecertaintyonwhetherinternationalshippingoflowcarbonhydrogenwillbeeconomical.MiddleEasternandNorthAfricancountries,endowedwithabundantsolarenergy,couldpotentiallyco-locatehydrogenproductionwithsolarfarmsandthenexportthehydrogentoEuropebyrepurposingexistinggaspipelines.However,theevolutionoftheseglobalproductionhubsandtraderoutesforhydrogenmaywelltakeyears,ifnotdecades.Insuchafluidinternationalcontext,theUKseemsdeterminedtodevelopitsownhydrogenproductiontoachieveadegreeofenergysecurity.Whileinvestorsanddevelopersarecautiouslyobservingthisspace,somebelievethatalackofclarityaroundfuturebusinessmodelsriskshinderinginvestment.‘Wearebehindthegame’onmakingthesemodelsclearandthatcouldbeimpedingpromisingprojectsacrosstheUK,notedRichardCockburn,PartneratWombleBondDickinson.TakingintoaccountthedetailswhichtheUKGovernmenthavepublishedtodatehowever,GuyBuckenham,HeadofStrategicandEmergingMarketsPolicyatenergycompanyEDF,welcomedtheresponsestotheconsultationsontheNetZeroHydrogenFund,HydrogenBusinessModelsandLowCarbonHydrogenStandard,addingthat‘wearestudyingthedetailsoftheseproposalsandlookforwardtoworkingwithgovernmentonthenextstagesoftheprocess’.Figure14:UKindustriallocationsSource:CornwallInsight2CementplantsincludeKiln,Grinding,andBlendingsites.Predominantindustrialsitesshowninthemaptohighlightindustrialclusters.RefineriesOlefinsSteelProductionAmmoniaCementplants2GlassindustryOtherchemicalplants24TheUKandtheenergytransitionFigure15:Roadmapofhydrogenpenetrationintheindustrialsector26IndustrialdecarbonisationkeyforUKlowcarbonhydrogen-CornwallInsight(cornwall-insight.com).TheUKmaybeonthecuspofamajorbreakthroughwithlowcarbonhydrogenwhichcouldhaveameaningfulimpactforbothitsdecarbonisationanditseconomy.DrSimonSchulte,VisitingResearchFellowattheOxfordInstituteofEnergyStudies,notedthecountry’stechnologyagnosticapproach–remainingopentobothgreenandbluehydrogenunlikeotherhydrogenleaderssuchasGermany–allowstheUKtoharnessbluehydrogenasa‘bridgingtechnology’.Headdedthatthisless‘idealistic’approachtodevelopingtechnologiesis‘whattheUKhasoftendonebetterthanGermany’.Industrialclusterscouldbecometheengineofanewindustrialrevolutionbasedonlowcarbonhydrogen,withclusterssuchasTeessideandHumbersidebecominghubsforbothproductionandconsumption.Withregardstotheformer,MattLewy,PartneratWombleBondDickinsonhighlightedthattheUKGovernment’sstrategyarounddomestichydrogenproductionhasbeendeveloping‘handinglove’withCCUS.TheCCUSbusinessmodelsandprocurementprocessesaresignificantlymoreadvancedthanforhydrogen,withCCUSclustersontheNorthEastandNorthWestEnglishcoastsawardedprioritydevelopmentstatus.OncetheinitialCCUSclustersareinoperation,thisshouldfacilitatethedevelopmentofhydrogenproductionatscale:likelytoinitiallybebluehydrogenusingnaturalgaswithCCUS.Industrialclustersarealsolikelytobecomecrucialtodevelopingdemandforlowcarbonhydrogen.Theseclustershavetheirownemissionreductionpathwayswhichwillbenefitfromescalateduseoflowcarbonhydrogen.CCUS-enabledhydrogenhasa‘keyrole’toplayhereinprovidingthe‘largeamountsoflowcarbonfuelthatarenecessarytotransfersuchanindustryonthedemandside’notedOxfordInstituteforEnergyStudies’DrSimonSchulte.Thisincreaseindemandwill,inturn,pushdownthepricesofhydrogenoverall,facilitatingimprovedeconomicsforelectrolytichydrogen.CornwallInsighthasmodelledhowthisdemandwilllook:Figure14highlightstheindustrialclusterswithsignificanthydrogenuptakepotential,andFigure15givesshapetohowthiscouldlookinpracticeacrossthenextfewdecades26.•LowdemandinRefinery•VerylowdemandinAmmonia,Methanol,Olefins•1GWProductionCapacity•MediumdemandinRefinery•LowdemandinAmmonia,Methanol,Olefins•H2inSteelProductionDemo•100%lowcarbonH2inRefinery•MediumdemandinAmmonia,Methanol,Olefins•H2injectionBFinSteel•IntroducingdirectH2-DRI•100%lowcarbonH2inChemicalIndustry•H2-DRIproducemoreSteel•MediumdemandinHT•IndustrialHeating•DecarbonisedIndustry5.3.ExploitingfirstmoveradvantageSource:CornwallInsight202520302040205025TheUKandtheenergytransitionForthisdomesticscaleupofCCUS-enabledhydrogentohappen,localcontentrequirementswouldneedtobeimplementedtoensuretheexpansionoflocalsupplyandtokeepdomesticallyproducedhydrogeneconomical.ItiscriticalthattheUKlearnsfromearlyoversightsinoffshorewindwherelocalcontentpercentageswereinsufficient.Thusfar,inthe‘procurementprocesswhichhasbeenrunwithCCUS,localcontentisinthere’,notedWombleBondDickinson’sMattLewy,however,thisprioritisationneedstobemaintainedinthecaseofCCUSandacceleratedinthecaseofhydrogen.Inparticular,itiskeythatopendialogueandengagementwithindustryismaintainedasthemarketforhydrogenandCCUSdevelops.ApositivesteptakensofarhasbeentointroducetheUKHydrogenAdvisoryCouncil,co-chairedbyRtHonKwasiKwartengMP,SecretaryofStateforBusiness,EnergyandIndustrialStrategy,andSineadLynch,UKCountryChairofShell.ThisstructureisintendedastheprimaryforumforBEISministerialengagementwithrepresentativesfromthehydrogensector.Consultationwiththeindustryisalsoseenascrucialinothercountries,suchasinGermanywhere,theNationalHydrogenCouncilbringstogether26high-levelexpertsfrombusiness,science,andcivilsocietytodirectlyadvisethegovernmentalCommitteeforHydrogen.RonnieQuinn,ChiefExecutiveatNECCUS,aconsortiumthataimstodecarboniseScotland’sindustry,notedthatcompaniesinvolvedintheUKoilandgasindustryaresignificantplayersthatneedtobeappropriatelyengagedaswedeveloplowcarbonhydrogenmarkets.Thesecompaniesholdessentialknow-how,financialcapitalandexistinginfrastructurewhichwillbeusefulinspurringthesupplychainsofCCUSandhydrogen.Forinstance,onekeyadvantageoftheUK’sheritageintheoilandgasindustryhasbeentheexplorationoftheisland’soffshoregeology.IntheCCUSsector,thisheritageprovidesample,wellresearcheddomesticresourcesforCO2storage,particularlyintheNorthSea.NECCUS’sRonnieQuinnaddedthatafurtherbenefitofengagingwiththeUK’soilandgasindustrycomesfromthetrainedpeoplewithspecialistunderstandingoftheseresources,whocouldsupporttheCCUSsectors.UpskillingwillplayaroleinensuringsuccessfulknowledgetransferbetweenskilledworkersfromtheoilandgassectorandprofessionalsworkingintheemergingCCUSsupplychain.Governmentengagementwithcompaniesinthisindustryiskeyhereinordertobenefitfromtheexperienceandresourcesthattheseindustrygiantsinenergyandinfrastructureoffer.WombleBondDickinson’sLisaRushtonnotedthatthetechnicalknowledgearoundhowtorepurposeexistingpipelinesforhydrogenisakeylessonwhichboththeUSandUKcantakefromtheirwell-establishedoffshoreoilandgassector.Whileindustry-governmentdialoguehasmanyadvantages,thereisconcernaroundwhethertheUKGovernmentcould–orshould–contributedirectlytothedevelopmentofnationalchampions.LowcarbonhydrogenfromCCUSandelectrolyserswillbe‘usedfordecarbonisingsteel,cementandshippingandtheseareglobalindustries’observedGreencoatCapital’sJamesSamworth.Hewentontoaddthatinordertodevelopanationalchampioninthesenascentindustries‘you’vegottowininthemarketglobally’,whichisunrealisticgiventhesupplythatwouldbenecessary.Therefore,directinglargeamountsofpublicmoneyintothesenascenttechnologies,withastatedaimofcreatingnationalchampions,couldbeseenasafutileendeavour.WhileCCUS-enabledhydrogenhasgarneredmuchattentionoflate,theUK’s“twin-track”approachtohydrogenscaleupmeansthereisalsoarecognitionoftheimportantroleforgreenhydrogen.Asmentionedabove,theUK’srecentEnergySecurityStrategyincludedanannouncementthatoutofthe10GWoflowcarbonhydrogenproductioncapacity,atleasthalfwillcomefromelectrolytic,orgreen,hydrogen.ItiscriticalthattheUKlearnsfromearlyoversightsinoffshorewindwherelocalcontentpercentageswereinsufficient.26TheUKandtheenergytransitionFigure16:ForecastedsectoralandtotalUKdemandforhydrogen2025-2050Source:CornwallInsightTheUKGovernmentisalsoseekingviewsonitsproposedapproachtoallocatingHydrogenBusinessModelandNetZeroHydrogenFundsupportthroughajointallocationprocessforelectrolytichydrogenprojects.Co-locationofhydrogenwithoffshorewindisakeyapproachforproducinggreenhydrogen.Ithasthecombinedbenefitofmanagingintermittentflowsofenergyfromthewindassetsandharnessingthecountry’sampleoffshorewindpowertoboostsupplyofhydrogenfordomesticuse.Hydrogencanbestoredandtransported,makingmoreefficientuseofanyexcessenergyproducedbytheoffshoreturbines.Intermsoftimescalesforthistechnology,RichardCockburnatWombleBondDickinsonobservedthatelectrolytichydrogenissettoreachthecostequivalenttoCCUS-enabled‘by2035,orinsomedevelopedcountriesasearlyas2030’asthetechnologyimprovesandmorepeoplecomeintothemarket.Indeed,hydrogenfromsolarintheMiddleEastisclaimedtobealreadyonacostparwithCCUS-enabledhydrogen.Thistechnologywillhaveavarietyofuses,includingforgridbalancing,astheprocessesforproducingitcanbe‘interruptedonamoment’snotice’,asnotedbyWombleBondDickinson’sBeltonZeigler.Headdedthat‘thepossibilitiesareverymuchthere’forelectrolytichydrogentoplayaroleinindustrialdecarbonisationthroughthe‘integrationofhydrogenwithrenewableelectricityonsite’.TheUKhasgoodgeologicalandgeographicconditionsforproducinghydrogenaswellasampledemandacrosssectors(seeFigure16).ItisincumbentontheUKGovernmentandindustrynowtoboostdemand,harnessdomesticknow-howandshapepolicyappropriatelytodeveloptheindustryoverthenextdecade.Scotland:anemergingCCUSleaderWiththeobjectiveofreachingnetzeroby2045–fiveyearsaheadoftherestoftheUK–Scotlandisalreadyleadingthewayintermsofindustrialdecarbonisation.ThegeologicalstorageofcarbonundertheNorthSea’sseabedisoneofScotland’skeyassets,alongsideitstop-notchindustrialheritage.Existingpipelinescouldberepurposedtotransportcarbonemissionsfromindustrialclustersintodepletedoilandgasfieldsaswellasaquifers.TheScottishGovernmentannouncedon11April2022thatithaslauncheda£5mCO2UtilisationChallengeFund.ThisfundaimstohelpbusinessesandorganisationsdevelopandcommercialiseemergingCO2utilisationtechnologies,whichinvolvesharnessingandconvertingCO2andusingittodevelopproducts,suchassyntheticfuelsandproteinsusedinaquaculture.ThedevelopmentofaholisticCCUSeconomyinScotlandandtherestoftheUKwillgeneratesignificantopportunitiesforBritain’senergysupplychain,allowingtheretentionandcreationofskilledjobs.Thepossibilitiesareverymuchthereforelectrolytichydrogentoplayaroleinindustrialdecarbonisation.27TheUKandtheenergytransitionChapter6:LeadingthewayAstheUKlooksaheadinitsnetzeroambitions,itisessentialthatitseekstoactquicklytoremedyandrespondtothechallengesitfaces.Holisticthinkingisneededtoincreaseclarityonthelong-termdirectionoftravel.ItiskeytodevelopadecisivevisionfortheUKenergytransition,reachingnetzerogoalsandenergyindependenceinawaythatisenvironmentallysustainableandsociallyequitable.Inparticular,basedonthefindingsofourresearch,anumberofchallengesneedtobeaddressedbygovernmentandindustrytosecuretheUK’sleadershipintheglobalenergytransition:GuaranteefuturesecurityofsupplyThedevelopmentofrenewables,aswellaslowcarbonhydrogenandCCUS,iscrucialfortheUKtobecomeenergyindependent,givenincreasinguncertaintyandtensionsontheEuropeancontinent.Findingabalancebetweenenergysecurity,sustainability,andaffordability–theoldenergytrilemma–willkeeponbeingapriorityfortheUKasitembarksonthenextphaseofitsenergytransition.AmorecoordinatedpolicybetweentheUS,theUKandtheEuropeanUnionwillenablethesecountriestotacklecurrentthreatstoenergysupply.ThereisalsosignificantpotentialforboostinginternationalcooperationandpartnershipsparticularlybetweentheUSandtheUK,wherethetwocountriescouldbenefitfromeachother’sinvestmentandknow-how.Aswemoveforwardinformulatingplanstoensurefuturesecurityofsupply,dueconsiderationshouldbegiventoincreasingcapacitycapsinfutureCfDauctions,particularlyinthecaseofsolarPVandonshorewind.FollowingthepublicationoftheEnergySecurityStrategywhichcontainedupdatedambitionsfornuclearcapacity–takingthreeprojectstofinalinvestmentdecisioninthisParliamentandthenext–itisevidentthatnuclearisalsoexpectedtotakeakeyroleinensuringtheUKcanmanageaself-sufficient,lowcarbonenergymixinthecomingyears.Whileincreasingpowergenerationcapacityforrenewablesisessential,equalimpetusneedstobegiventorampingupenergystorageinordertoaddresstheintermittencyofsolarandwind.Themassdevelopmentofstoragecapacityisessentialtosmooththeimbalancesbetweendemandandsupply,thuspreservingtheresilienceofthegrid.Atthesametime,coordinatedeffortsareneededtoholisticallyupgradetransmissionanddistributionnetworks,sotoensurethattheelectricitysystemisfitfornetzero.RingfencethecrisisofenergysuppliersandprotectinvestorsFollowingthechallengesfromtheretailmarketcrisisin2021,itisessentialthatuncertaintyanddoubtininvestmentgeneratedbythecrisisstaysascontainedaspossibleanddoesn’tspreadtootherareasoftheenergysupplychain.Forinstance,theblanket‘badcompaniesfail’approachtakenbytheUKGovernmentandsectorregulatormayhavedentedfaithin‘softpolitical’supportthatmarketplayersacrosstheenergysectorshouldexpectinthefaceofvolatilemarketforces27.Asthesectorrecovers,theUKGovernmentcoulddemonstrateamorenuancedapproachbyworkingquicklytoinvestigatethecomprehensiveimpactofthesituation,identifyingpossible‘fire-breakeroptions’andsignallingamorecase-by-caseapproachtosupportbusinessesstrugglingasaresultofthecrisis.ThiswouldhelptosignalthattheUKGovernmentrecognisesthecomplexityofinvestmentandrisktakingintheenergysectorandhelptorebuildconfidence.27CornwallInsighthasdiscussedtheUK’sapproachtotheenergypricespikeandfailureofsuppliersinmoredepthhere:Thestakesarehigherthantheyseem:thecurrentenergychallengeandnetzero-CornwallInsight(cornwall-insight.com).Whileincreasingpowergenerationcapacityforrenewablesisessential,equalimpetusneedstobegiventorampingupenergystorage.28TheUKandtheenergytransitionStreamlineconsentingprocessforrenewablesThemovetoannualCfDauctionsisapositivestepforrenewabledevelopmentandwillenabledevelopersandinvestorstoplanahead.WhilstthereisaneedformorecapacityforonshorewindandsolarPVwithintheCfDauctions,particularlywithanincreasingnumberoflargersolardevelopmentprojectscomingonline,themovetoannualauctionswillprovidemoreopportunitiesforthesetechnologies.ThesimplificationoftheoffshorewindplanningprocessesintheEnergySecurityStrategy,reducingconsentingtimefromupto4yearsdownto1year,representsanimportantsteptowardsamorestreamlinedmarket.However,onshorewindreceivedlessattentionwithlimiteddetailandlessambitiousproposals.Maximisegridefficiencyandencourageco-locationThereisalsoaneedformoreholisticjoined-upthinkingtomaximisetheefficiencyofthegrid,particularlywithregardtooffshorewind.ThiswasrecognisedintheEnergySecurityStrategywithcommitmentstoestablishaFutureSystemsOperatorandtoidentifyablueprintforthewholesystembytheendof2022intheHNDandCSN,thelatterofwhichwillidentifystrategicinfrastructureneededtodeliveroffshorewindby2030.Thesedevelopmentshavebeenacriticalstepforwardgiventheheavyambitionforoffshorewindandneedtoconnectoffshoresitesmoreeffectivelytothegridalongsideopeningupinternationalinterconnectionopportunities.Withtheincreasingroleofrenewablegenerationandintermittenttechnologyonthesysteminyearstocome,co-locationwillbecomeevermoreimportantinbalancingsupplyanddemandonthegrid.Co-locationofbatterystoragewillenableintermittentrenewabletechnologiessuchasonshorewindandsolartoprovideflexibilitytothegridatthetimesitisneeded.EnsurelocalcontentrequirementstoboostdomesticsupplychainandjobsTheOffshoreWindSectorDealin2020increasedtheamountoflocallysourcedcontentforoffshorewindfarmsfrom48%to60%by2030.28https://www.ogauthority.co.uk/news-publications/news/2022/energy-integration-project/.Reducingconsentingtimefromupto4yearsdownto1year,representsanimportantsteptowardsamorestreamlinedmarket.29TheUKandtheenergytransitionSomewouldarguethattheselocalcontentrequirementsshouldhavebeenhigherfromthestart.Itisimportantthatthelessestablishedandmorenascentrenewablessectorsalsoimplementlocalandhighercontentrequirementsmuchearlierinawayconsistentwithinternationaltraderegulations,thereforelearningfromtheinitialoversightsmadeindevelopingtheoffshorewindsector.Thiswillhelptoensurethatasthegrowthofrenewableenergyproductionincreases,thedomesticindustriesandthejobssupportingitgrowtoo.ExploitfirstmoveradvantageforlowcarbonhydrogenandCCUSbydevelopingbusinessfriendlymodelsThehighlevelofuncertaintyaroundregulatoryframeworkstosupportthetechnologyhindersinvestorconfidence.TheconclusionoftheUKGovernment’sconsultationonbusinessmodelshashelpedtobeginillustratinghowthemarketisexpectedtolook,butmoredetailisneededassoonaspossible.Researchanddevelopmentneedsparticularfocus,giventheshortageofskillsandmanufacturingwithinthecountry.SwiftactionneedstobetakennowtohelppositiontheUKasaleaderinemergingtechnologiessuchasCCUSandhydrogen,particularlyasthecountryhasafirst-moveradvantage.ItiscriticalthattheUKGovernmentisproactiveinsupportingthereskillingofthecurrentenergysectorworkforceforthesetechnologiesandinencouragingthedevelopmentoftheseskillsinhighereducationcentres.Domesticmanufacturingalsoneedstobespecificallydevelopedaroundtheindustrialclusterstoallowthedomestichydrogenindustryandworkforcetogrow,ensuringtheexpansionoflocalsupplyandkeepingdomesticallyproducedhydrogeneconomical.DeveloppartnershipsinternationallyandacrosstheenergyvaluechainThewealthofknowledge,expertiseandfinancialcapitalintheoilandgasindustrywillbekeytothedevelopmentandgrowthofthehydrogeneconomy,particularlyforsupplychains.Additionally,theresearch,explorationandgeologicaldocumentationdonebytheUKoilandgasindustrymeansthereisalreadygoodspecialistknowledgeandunderstandingoftheresourcesforCO2storage,particularlyintheNorthSea,whichcanbeusedforCCUS.OnerecentexampleofknowledgesharingbetweentheUK’soilandgassectorandthewiderenergysectorhasbeentheEnergyIntegrationProject.ThisprojectbroughttogethertheNorthSeaTransitionAuthority,BEIS,Ofgem,TheCrownEstateandCrownEstateScotlandandprovidedathree-yearstudyofpotentialsforenergyintegrationtechnologies(CCUS,hydrogen,offshorewind)ontheUKContinentalShelf28.Thereisalsopotentialfortheoffshorewindsectortopartnerwiththenascenthydrogenindustry,particularlytoincreasethepotentialforelectrolytic–orgreen–hydrogen.Theco-locationofoffshorewindassetswithelectrolysersprovidesthebenefitofenergystorageandameansoftransportation.Knowledgefromtheoilandgassectorwillalsobecriticaltomaximisethepotentialthatelectrolytichydrogencanprovide.CapturetheopportunityDespiteallthechallengeshighlightedinthisreport,theUKisinastrongpositiontomakesignificantprogressinthedecarbonisationofitseconomyinthenextdecade.TheUKisalreadyaglobaloffshorewindleader,hassomeclearcompetitiveadvantagesinthedevelopmentoffloatingtechnologiesatscale,andispavingthewaytoutility-scalelowcarbonhydrogenandCCUS.Buildingonthesestrongfoundations,thecountrycanmakesignificantstridestowardsenvironmentalsustainabilityandenergyindependence,whileunlockinginvestmentopportunities,strengtheningdomesticmanufacturingandcreatingnewjobsforgenerationstocome.SwiftactionneedstobetakennowtohelppositiontheUKasaleaderinemergingtechnologies.30TheUKandtheenergytransitionAboutWombleBondDickinsonWombleBondDickinson(WBD)isafull-servicetransatlanticlawfirmprovidingcomprehensivelegalservicestoclientsacrossawiderangeofindustriesandsectors,includingenergyandnaturalresources.Thefirmhasmorethan400partnersand1,000lawyersbasedacross20UScitiesandeightUKcities,includingLondonandEdinburgh.OurreachalsoextendstoEurope,wherewehavestrategicpartnershipswithlawfirmsinGermanyandFrance.WBDisaUKtop20lawfirmbyturnoverandaTop100lawfirmglobally.Intheenergyandnaturalresourcessector,ourteamhasseveraldecadesofcombinedexperienceinbothoilandgasandrenewableenergy.Wesupportclientsinallaspectsoftheenergytransitionandhaveparticularexpertiseinoffshorewind,decarbonisationofheat,CCUSandhydrogen,onshoregeneration,energyretail/supplyalongwithtransmissionanddistribution.WombleBondDickinsonataglanceUKBristolEdinburghLeedsLondonNewcastlePlymouthSouthamptonUSAtlantaBaltimoreBostonCharlestonCharlotteCharlottesvilleColumbiaSiliconValleyGreensboroGreenvilleHoustonLosAngelesIrvineRaleighResearchTriangleParkTysonsWashington,D.C.WilmingtonWinston-SalemNewYork27acrosstheUKandUSLocations4001,000PartnersLawyersMorethanOursectorsNaturalEnergy&ResourcesPrivateWealthManufacturingPharmaceutical,Biotechnology&LifeSciencesFinancialInstitutionsTransport,Logistics&InfrastructureInsuranceRealEstateRetail&ConsumerGoodsRealEstateTechnologyEnergy&NaturalResourcesHealthcarePrivateWealthManufacturingPharmaceuticalsLifeSciences&FinancialInstitutionsTransportInsurancePublic,GovernmentServices&ThirdSectorRetail&HospitalityRealEstateTechnologyRepresentingmorethanintheUSandUKUKTopAmLaw2082Ranked102ndgloballawﬁrmbyrevenueChambersrankings+150600PubliclyTradedCompaniesLawﬁrmrankedﬁrmConsolidatingournationalreputationsandregionalheritageunderonepowerfultransatlanticbrandWealsohaveapresenceinTeessideattheWiltonCentre31TheUKandtheenergytransitionAboutWombleBondDickinsonChrisTownerPartnerLisaRushtonPartnerVickiRedmanPartnerAnthonyAldermanPartnerSebastianBriggsPartnerRichardCockburnPartnerHeadofEnergyMattLewyPartnerSimonHughesPartnerBeltonZeiglerPartnerOurcontributors32TheUKandtheenergytransitionAboutCornwallInsightAboutCornwallInsightGettingtogripswiththeintricaciesembeddedinenergyandwatermarketscanbeadauntingtask.Thereisawealthofinformationonlinetohelpyoukeepuptodatewiththelatestdevelopmentsbutfindingwhatyouarelookingforandunderstandingtheimpactforyourbusinesscanbetough.That’swhereCornwallInsightcomesin,providingindependentandobjectiveexpertise.Youcanensureyourbusinessstaysaheadofthegamebytakingadvantageofour:•Publications–CoveringthefullbreadthoftheGBenergyindustry,ourreportsandpublicationswillhelpyoukeeppacewiththefastmoving,complexandmulti-facetedmarketsbycollatingallthe“must-know”developmentsandbreaking-downcomplextopics•Marketresearchandinsight–Providingyouwithcomprehensiveappraisalsoftheenergylandscapehelpingyoutrack,understandandrespondtoindustrydevelopments;effectivelybudgetforfluctuatingcostsandcharges;andunderstandthebestroutetomarketforyourpower•Training,eventsandforums–Fromnewstarterstoindustryveterans,ourtrainingcourseswillensureyourteamhastherightknowledgeandskillstosupportyourbusinessgrowthambitions•Consultancy–EnergymarketknowledgeandexpertiseutilisedtoprovideyouwithadeepinsighttohelpyouproveyourbusinessstrategiesareviableFormoreinformationaboutusandourservicescontactusonenquiries@cornwall-insight.comorcontactuson+441603604400.DisclaimerWhileCornwallInsightconsiderstheinformationandopinionsgiveninthisreportandallotherdocumentationaresound,allpartiesmustrelyupontheirownskillandjudgementwhenmakinguseofit.CornwallInsightwillnotassumeanyliabilitytoanyoneforanylossordamagearisingoutoftheprovisionofthisreporthowsoevercaused.Thereportmakesuseofinformationgatheredfromavarietyofsourcesinthepublicdomainandfromconfidentialresearchthathasnotbeensubjecttoindependentverification.NorepresentationorwarrantyisgivenbyCornwallInsightastotheaccuracyorcompletenessoftheinformationcontainedinthisreport.CornwallInsightmakesnowarranties,whetherexpress,implied,orstatutoryregardingorrelatingtothecontentsofthisreportandspecificallydisclaimsallimpliedwarranties,including,butnotlimitedto,theimpliedwarrantiesofmerchantablequalityandfitnessforaparticularpurpose.Numbersmaynotaddupduetorounding.NaomiPotterLeadResearchAnalystn.potter@cornwall-insight.comT:+441603542183KateHillLeadResearchAnalystk.hill@cornwall-insight.comT:+441603542136DanAtzori,PhDResearchPartnerd.atzori@cornwall-insight.comT:+4416036044003233TheUKandtheenergytransitionAcknowledgementsForthisreport,weinterviewedleadingstakeholdersfromcompaniesacrossmanysectors.Wewouldliketothankalltheindividualsandcompanieswhocontributedtothisreportforsharingtheirinsights,includingthosewhowishedtoremainanonymous.•AlejandroCiruelos,ManagingDirectoratQ-Energy•SantiagoBlanco,ExecutiveVicePresidentandRegionalDirectoratDNV•LauraRolo,OffshoreWindTechnicalLeadSEMELAatDNV•GuyBuckenham,HeadofStrategicandEmergingMarketsPolicyatEDFEnergy•DrSimonSchulte,VisitingResearchFellowatOxfordInstituteofEnergyStudies•ZosiaRiesner,DirectorofPowerMarketsatLightsourcebp•DavidHarradine,ExecutiveDirectorofProjectFinanceatABNAmro•JamesSamworth,PartneratGreencoatCapital•RonnieQuinn,ChiefExecutiveatNECCUS•CharlotteEddington,InvestmentsDirectoratAbundanceInvestment•LawrenceSlade,CEOatGlobalInfrastructureInvestorAssociation•JohnPuddephatt,BusinessDevelopmentManageratStatkraft34TheUKandtheenergytransition©Copyright2022WombleBondDickinson(UK)LLP.Allrightsreserved.Thiscommunicationisprovidedforgeneralinformationonlyanddoesnotconstitutelegal,financial,orotherprofessionaladvicesoshouldnotbereliedonforanypurposes.Youshouldconsultasuitablyqualifiedlawyerorotherrelevantprofessionalonaspecificproblemormatter.WombleBondDickinson(UK)LLPisauthorisedandregulatedbytheSolicitorsRegulationAuthority.“WombleBondDickinson”,the“lawfirm”orthe“firm”referstothenetworkofmemberfirmsofWombleBondDickinson(International)LimitedconsistingofWombleBondDickinson(UK)LLPandWombleBondDickinson(US)LLP.EachofWombleBondDickinson(UK)LLPandWombleBondDickinson(US)LLPisaseparatelegalentityoperatingasanindependentlawfirm.WombleBondDickinson(International)Limiteddoesnotpractiselaw.Pleaseseehttps://www.womblebonddickinson.com/uk/legal-noticesforfurtherdetails.womblebonddickinson.comTofindoutmoreaboutenergytransitioning,visitWombleBondDickinson’sre:buildBritainhubhere.

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