COP26 rounded off a year of green agenda announcements in the UK, with the Net Zero Strategy, the Hydrogen Strategy and North Sea Transition Deal.
The conference culminated in the signing of the Glasgow Climate Pact by 197 countries. Key elements of the pact included:
(i) an agreement to re-visit emission reduction plans in 2022 in light of the 1.5°C Paris Agreement target;
(ii) a commitment to limit the use of ‘unabated’ coal (for example, coal power plants without carbon capture storage technology); and
(iii) a commitment to finance climate action for developing countries.
Catalysed by COP26, clear trends are emerging in the corporate climate change movement.
There is increasing reliance on the wider business community to drive climate action, with companies now embedding net zero targets in their work practices and scaling up commitments to net zero, e.g. the rise in popularity of the B Corporation certification programme.
Moreover, there has been a shift in focus to private sector financing. The Glasgow Financial Alliance for Net Zero initiative, for example, unites over 160 firms from the leading net zero initiatives across the financial system to accelerate the transition to net zero emissions by 2050.
COP26 also saw the announcement the Breakthrough Agenda, the international plan to scale up development and bring down costs of clean technologies by the end of the decade.
The five main ’Glasgow Breakthroughs’, forming part of the agenda, are to make:
1. clean power the most affordable and reliable option for all countries to meet their power needs efficiently;
2. zero emission vehicles the new normal and accessible, affordable, and sustainable;
3. near-zero emission steel the preferred choice in global markets;
4. affordable renewable and low carbon hydrogen is globally available; and
5. climate-resilient, sustainable agriculture the most attractive and widely adopted option for farmers.
Scotland’s progress in renewable energy in recent decades puts it in good stead to be a global leader in the green movement.
For example, the Scottish Government recently earmarked £80m to support the Scottish Cluster carbon capture project in response to Westminster’s decision not to award the project Track-1 Status under the UK’s Carbon Capture, Usage and Storage Programme (projects with such status will have the first opportunity to be considered to receive UK government support).
Most recently, we have seen the announcement of the outcome of the ScotWind leasing rounds, the first Scottish offshore leasing programme in over a decade.
ScotWind saw 17 projects awarded sea bed leases in January, which cumulatively have the potential to generate nearly 25GW of energy over the next decade. That is enough to meet approximately a third of the UK’s current power need.
The outcome of the leasing round has provided much excitement in the industry, with the majority of the projects (10 in total) relating entirely to floating offshore wind. This technology enables wind farms to be located significantly further from the shore where they can benefit from greater potential power generation.
The ScotWind option fees amounting to £700m (the amount bidders would pay in exchange for the licences) will provide a substantial injection of funding for the Scottish Government and there will be significant knock-on effects on supply chain investment.
While this will not be without challenges to the local supply chain and workforce, Scotland’s experience and resources in the offshore oil and gas industry provides a unique opportunity to re-deploy and re-train resources in order to facilitate this green transition. The foundations developed by the ScotWind has the potential to place Scotland as a centre of excellence for offshore wind over the next decade.
Burges Salmon has extensive experience in all aspects of renewable energy projects. Please feel free to get in touch if you think we could assist with your projects and ideas.
Please contact: amy.mcpherson@burges-salmon.com or ross.howells@burges-salmon.com or visit the website.
