Innovation is magic - Guy Newey

Comment by Guy Newey, CEO, at Energy Systems Catapult.

One of the clichés that narks me most in energy is people who say, “We don’t need innovation. We have all the technologies we need to get to Net Zero. We just need to deploy them.” This is nonsense. It would make sense if you didn’t care about the cost of energy, or the skills needed to build the infrastructure at the pace we need, or whether consumers welcome and accept the new technologies.

And it would make sense if you didn’t care about how the range of technologies would fit together into a coherent system that works for energy consumers. If we had all these things, we could just sit back and relax and have a well-deserved cup of tea and the clean energy system would emerge with consumers whooping with delight. But we don’t, so it’s nonsense.

Getting to Net Zero by 2050 will take unparalleled levels of innovation (and that is just in the UK, the global challenge is even greater). That is innovation in technology, planning, data, regulation, policy design, and business models. Basically, everything. And to deliver that, we need innovators – large and small, established and new – to come up with new products and services that will help us solve this generational challenge. And we need that innovation across the economy, but particularly in energy.

Of course, it is hard to predict how that innovation will play out. Technologies which seemed marginal to the energy system at the signing of the Climate Change Act (2008) are now central; the incredible success of driving down the cost of renewables, the emergence of electric vehicles as desirable and affordable, not just souped-up milk floats, the tumbling cost of lithium-ion batteries, and helping to store and dispatch electricity when it is needed (at least on a short time-frame).

Such changes were not inevitable. They required risk-taking companies and investors to take bold, brave steps to get us there (and be willing to make mistakes). If I could bottle this passion for cleaner, greener energy delivery and sell it, I would be a rich man because we’re going to need a lot more of it to get us to Net Zero by 2050 (and we are also going to need plenty of it to get to the government’s 2030 clean power target).

So where is innovation most needed? Innovating to Net Zero 2024 – the Catapult’s second ‘state of energy innovation’ report – demonstrated that, despite slower than hoped for progress in some key technologies identified in our original 2020 report, there remain credible, affordable pathways to Net Zero. But we need to invest in an accelerated programme of innovation in the electricity system and beyond to have a chance of delivery on our targets (and to ensure the UK is ideally placed to benefit from the global transition).

Firstly, there are a set of low regrets technologies we need to deploy as quickly as possible: solar, onshore and offshore wind, heat pumps, large-scale nuclear, network infrastructure, electric vehicles, town or city-scale heat networks, and salt cavern storage for molecular gas. You need to get on with those as fast as your supply chains can cope. Such rapid deployment is a key potential value in the Mission Control approach set out by government. But on its own, it is not enough to get us to 2050.

Secondly, you have a range of technologies where technological innovations, ranging from demonstration to cost improvements are essential. These include hydrogen production and hydrogen power stations, maritime and aviation fuels, small modular reactors (including for heat), potentially hydrogen off-road vehicles and battery electric heavy-duty vehicles, as well as a range of carbon capture technologies, including bioenergy with carbon capture and storage (CCS) and direct air capture.

These technologies, while less mature, are high potential both for decarbonising the UK economy and internationally. If the UK’s clean tech innovators can harness this opportunity, we could capture the high value parts of the international supply chain and become a world leader in the delivery of Net Zero energy technologies. The race is on with other international markets. For more on that, check out our overview of the report.

Finally, we need innovation in how all these technologies will fit together in a flexible, digitalised energy system. This is as big an innovation challenge as any of the single-technology challenges mentioned above. This is about digitalisation and data, interoperable standards on devices, market design (with better signals to reflect the physics of the new system), better planning at local, regional and national level, regulatory agility, as well as innovations in crucial flexible technologies that can help with the central challenge identified in Innovating to Net Zero, how you deal with ‘peak heat’ in a renewable-heavy system.

The good news is that the UK has some incredibly promising companies working on various challenges related to how we create that integrated, smart energy system of the future: heat battery pioneers like Caldera, tepeo and Sunamp; electric charging innovators like Voltempo and myenergi; smart energy devices companies like Wondrwall, equiwatt, Geo, Hildebrand; and people trying to work out how to make it easy to get great low carbon domestic heating offers to consumers, like Heat Geek, Warmur and Carno. I could go on and on (and will happily at length), and many of them we have been lucky to work with at the Catapult. And that is before you get to the large energy companies, who are pioneering consumer-facing low carbon offers: Octopus, OVO, EdF and EoN to name the leaders. While this smart flexibility space does not get much ‘industrial strategy’ attention, this is an area where the UK has a genuine comparative advantage, which we are at risk of letting slip away.

Sandeep Kang, one of the product managers at the Catapult recently said that “innovation, not magic, will get us to Net Zero.” I think he is wrong. I think what engineers and innovators do is magic, or at least the closest thing we have to it. And if we want to capture the economic opportunity of a shift to Net Zero, we need to implement mature technologies, innovation of less mature technologies, and the integration of all those technologies together.

Read more blogs from our Innovating to Net Zero Insights Series, click the slides below. 

Innovating to Net Zero 2024

This report aims to give people, businesses and UK government confidence to make investment and innovation decisions, and to take action that moves us closer to meeting our Net Zero targets whilst prospering from green growth opportunities.

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