GROWING THE SUPPLY CHAIN FOR A NET ZERO ENERGY SYSTEM
15 March 2022
Manufacturing capacity for key products may increase tenfold to meet demands for Net Zero delivery, and this will need to happen faster to support a move away from imported energy and improve energy efficiency. The potential for job creation in the UK today from the electricity supply chain is unprecedented. Manufacturers agree the level of investment needed is achievable but not under current market conditions.
Leading UK Trade Association BEAMA and the Energy Systems Catapult have today published a first of its kind analysis of the extent of infrastructure investment needed to meet Net Zero by 2050, revealing the huge opportunities that lie in the growth of green industrial sectors and job creation, forming a key part of the UK’s Green Industrial Revolution. This work reveals the criticality of investment in the next 5-10 years if we are to limit the overall cost of Net Zero.
The current energy crisis is now amplifying the scale and urgency for change across the energy system, as well as combined pressures on manufacturing capacity and supply shortages. The need for effective supply chain planning was urgent last year, now it is critical. Effective planning for manufacturing capacity will be absolutely essential for UK energy supply and security in the months and years to come.
Manufacturers are making investment decisions and deciding where to build manufacturing capacity and employ people. This work has shown how fragile this decision process is, and how critical this moment in time will be, in deciding the UK’s Net Zero future and how far we can benefit from growth in employment in low carbon technology sectors. With significant targets to be met for UK deployment of low carbon heat, storage and EV charging, already this sector faces huge skills and supply shortages which are a prominent factor limiting capital investment and progress.
Industry call for the urgent formation of an electricity supply chain council to reduce supply chain risks as we ramp up deployment of technology to meet our Net Zero targets. Early action will reduce cost and capitalize on more benefits associated with job creation as manufacturers state desire to invest in the UK and potentially reshore parts of the supply chain.
The research reveals the upper limits of potential investment required in electricity distribution networks (£7bn/yr by 2035) and end use technologies (£3bn/yr by 2035) could be avoided with sufficient progress in establishing flexibility markets, energy efficiency and supply chain planning.