National Infrastructure Assessment

Overview

Set up in 2015, the National Infrastructure Commission is an agency responsible for providing advice to the UK government on infrastructure challenges. Every 5 years it is required to publish a national infrastructure assessment, with the first being in 2018 and the second now being released. The assessment covers transport, energy, water, waste, flood resilience and digital connectivity. The report argues that for the UK to have a low carbon economy with infrastructure that supports growth a bold long-term plan is needed which increases investment. The commission has been guided by the principles of removing barriers and accelerating decisions, taking long-term views, acting with pace not perfection, furthering devolution and having adaptive planning. Through this it has recommended the following core ideas to the government:

Adding low carbon and flexible technologies to the electricity system to ensure supplies are reliable and secure
Taking the view that electrification is the only viable option for decarbonising buildings at scale
Investing in public transport across regional cities to unlock economic growth
Ensuring gigabit broadband is available nationwide by 2030
Preparing for a drier future by adding better water infrastructure and less leakage
Reducing the number of properties impacted by flooding
Creating plans and incentives for recycling infrastructure

Energy and Net-Zero

Specifically on energy and net-zero the commission recommended that over the next 30 years, the UK will need:

A larger electricity system running mostly from renewable sources
Heat pumps and networks to replace gas boilers in homes and businesses
Cars and vans fuelled by clean electricity and charging infrastructure to replace petrol stations
Industry running on electricity where possible but where it is not, new infrastructure to supply clean hydrogen or carbon capture

The commission argues that the benefits of this include; energy security, price stability, affordability, increased productivity, international competitiveness and increases the nation’s quality of life. Although the commission do not underestimate the size of the task, they argue that there is precedent for these levels of transformations in the UK such as 4,000 transmission lines being built in 12 years during the 1950s and the 1990s ‘dash for gas’ when 40 gas power stations were built in 10 years.

Capacity Needed

Currently 18% of fossil fuel demand is used in electricity generation but demand for electricity it set to increase by around 50% by 2035 therefore greater capacity is needed for renewable infrastructure by this date. This includes:

60GW of offshore wind generation
70GW of solar generation
25GW of onshore wind generation
300,000 EV charging stations
Carbon capture/storage capacity of 50MtCO²e per year
60GW of short-term flexible capacity per year (interconnectors, energy storage and demand side responses)
30TWh of long-term flexible capacity per year to cover winter shortfalls (electricity generated by hydrogen and gas alongside carbon capture/storage)
Minimum of 8TWh of hydrogen storage in operation

Government Policy

The commission recommends that the UK government should reform its governance arrangements to enable these transformational changes. Policies should include:

Completing the set up of an Independent System Operator by the end of 2024 which can develop a strategic plan
Providing strategic clarity to Ofgem on the need for investment in electricity distribution and local flexibility solutions
Establishing the Regional System Planners proposed by Ofgem by 2028
Giving the Secretary of State the powers to establish and control energy reserves, with reserves of up to 25TWh by 2040
Planning for the end of the use of natural gas for heating
Supporting the transition of 7 million buildings from fossil fuel heating to heat pumps/heat networks by 2035
Committing to long-term funding to deliver low carbon heat across the public sector estate, social housing and for low-income households
Establishing a monitoring and review regime for the decarbonisation of transport by 2025
Actively encouraging industrial decarbonisation at speed

Network Upgrades

The commission recommends the development of a network which can connect multiple producers in different parts of the country providing benefits that do not exist with point-to-point pipelines. The benefits include:

Providing resilience for industrial clusters and provide access to hydrogen and carbon supply/storage
Helping achieve a single price for access and use of the network through having multiple sellers and allowing competition to reduce costs
Increasing optionality on where users of the network can be based
Providing access to more storage locations
Creating more opportunities for switching existing unabated gas fired generation to hydrogen or gas with carbon capture/storage.

A network such as this should be delivered by 2035, being guided by the principles of focusing on the delivery of decarbonisation for the largest emitters first, assuming that industries are unlikely to move due to access to inputs being required, accounting for the fact that some industries will reduce output as the economy decarbonises, providing a pipeline transport solution for large emitters and utilising offshore carbon stores.

The commission recommends that the government uses the following levers to achieve these upgrades to the network: