UK's 2030 clean power target 'too soon' to benefit from CCS, new nuclear, hydrogen

The UK government's ambitious 2030 power decarbonization target will have to be met without material contributions from carbon capture, new nuclear or clean hydrogen, S&P Global Commodity Insights' analyst Glenn Rickson said July 24.

Assuming a significant change in public attitudes towards major transmission projects also required a leap of faith.

"A 2030 clean power target date means that incremental new nuclear build cannot contribute, while there is even a question mark over Hinkley Point C being online in time. We also don't forecast hydrogen power playing a material role before 2035," said Rickson, who heads up Commodity Insights' short-term European electricity analytics team.

A first reactor at the 3.4-GW nuclear project in Somerset is set to start generating in 2029 at best, operator EDF has said.

Meanwhile all eight gas cooled reactors in the UK are to close by end-2028, removing around 4.6 GW from the system.

Under Commodity Insights' reference Planning Case, the UK is still generating over 80 TWh/yr of power from natural gas in 2030, while nuclear output drops to 5 TWh that year -- its lowest level in decades.

In terms of capacity, meanwhile, the Planning Case sees UK offshore wind reaching 39 GW in 2030 versus the government's 60 GW stretch target.

"There are several major roadblocks to getting there that go beyond renewable investment appetite and supply chain issues, including on transmission infrastructure and market design," said Rickson.

Power CCS birth pangs

With so much conventional gas assumed to be needed in 2030, the case for accelerated CCS was strong.

Ahead of the election, now Secretary of State Ed Miliband said Labour's 2030 goals would require a surge in renewable energy additions, "with support from nuclear power and other technologies, and back-up dispatchable electricity through gas with CCS."

But the UK's power CCS program has moved at a glacial pace. In December 2022, SSE/Equinor's Keadby 3 project became the first power CCS project in the UK to gain planning consent, hoped for a 2027 completion date but has yet to advance in the government's cluster sequencing process.

Drax is similarly reliant on yet-to-materialize support before it might embark on a first bioenergy CCS project. As things stand this is likely to be in the US, not the UK.

The 860-MW Net Zero Teesside Power combined cycle gas turbine project -- a joint venture between BP and Equinor – has received backing under Track 1 of the CCUS program, but a 2027 start date for this plant looks beyond reach.

The developer wants to take an investment decision this September, but needs government commitments on the related Humber and Teesside CO2 transport and storage system before proceeding.

In summary, there is a yawning gap between the government's goal and most credible outlooks.

"None of National Grid ESO's recent Future Energy Scenario "pathways" foresee net zero power by 2030," Rickson said.

While the pathways were established before Labour's election victory, the fact that none envisage net zero power by 2030 indicate the system operator does not see the target as necessary or perhaps even desirable in terms of least-regret investments delivering on the UK's overall 2050 net zero target, he said.

'Not in my constituency'

The government can also expect local opposition to the rapid transmission grid expansion needed to integrate Labour's planned boom in renewables.

An early indication of this came from Green Party co-leader and Waveney Valley MP Adrian Ramsay, who earlier in July called for a reassessment of National Grid's East Anglia GREEN project, a 400-kV overhead line from Norwich to Tilbury.

The Green Party campaigned for even more ambitious renewable energy targets than Labour, so Ramsay's opposition to the ESO's favored solution was surprising – but indicative of how hard it will be to accelerate approvals for new pylons.

The existing network in East Anglia carries 3.2 GW of generation. It needs to expand to 15 GW plus 4.5 GW of interconnections, National Grid has said.

While the government's landslide election victory mandated its "builders not blockers" strategy in rolling back planning constraints, "the scale and speed with which new generation capacity and transmission infrastructure will be required to meet its 2030 targets are likely to trigger significant 'on the ground' opposition that it will need to be prepared to tackle head on," Rickson said.