What Does the Government’s Net-Zero Target Mean for Energy Prices?
It is no secret that ashamedly, we are ruining the planet with our greedy consumption of fossil fuels for our work, entertainment and travel. Unfortunately, we as a whole have let this problem go on for too long, ignoring how fundamental it is to protect our planet from the consequences of our wasteful energy usage. Finally, the government has created a plan of action with different strategies to combat the damage we have done or prevent any future harm.
What is the Net-Zero Target?
The United Kingdom’s government has stated that by 2050, the nation will aim to be net-zero. This means that the sum of the greenhouse gases being emitted into the atmosphere and those being taken out will be equal to zero, and hence there will be a balance. Balancing these can either reduce emissions (lowering our energy use) or remove more from the atmosphere (through carbon capture or increased photosynthesis).
Similarly, by 2035 the aim is to reduce emissions by 78% compared to the atmospheric levels in 1990. This is an intermediate goal on the way to the final net-zero target, which is well underway to being met. The first two goals from 2008 to 2012 and 2013 to 2017 have already been completed. They have currently reduced emissions by over 48% compared to the levels in 1990 and are thus on track to reach goals set for future years.
What Does the Net-Zero Target Mean for Energy Prices?
Generally, the more renewable energy sources are used to generate sustainable energy, the cheaper our energy bills will look if we use green energy. This is because fossil fuels are considerably more expensive than renewable energy. The operational process of finding, extracting, and transporting them to be converted to usable energy is very costly, with the price of petroleum and coals becoming alarmingly high in the last few years.
In contrast, renewable energy costs are lower because there is no need to find them and extract them, so the operating costs are significantly decreased. The more public demand for this type of energy, the more the costs fall as we educate ourselves and learn how to make the process more efficient.
The government has come up with a ten-point plan on how to reach the net-zero target and how this will affect the economy:
The first point of the plan announced is the advancing of offshore wind, which essentially is the gathering of wind at sea in the form of waves and currents, which will turn the wind turbines and eventually generate electricity. Not only will this create many jobs, especially in the energy businesses, but the target of creating 40GW of offshore wind by 2030 will mean that energy will price will drop as there is a negative correlation between wind energy production and green energy prices. Since 2015, offshore wind prices have dramatically fallen by over 65%.
The second policy is the growth of low carbon hydrogen produced with the help of carbon capture. By 2030, the aim is to produce 5GW of this low carbon-hydrogen and create 8,000 jobs, letting local communities try out this type of heating with many options and seeing how they respond to the energy. This alternative to fossil fuels will be cheaper, and having the opportunity to use lower-priced fuel sources will reduce energy bills overall.
The third policy of the plan is advancing nuclear power, which is a significant source of low-carbon energy and investing in building more reactors would improve our knowledge of how they work and hence make the creation of energy more efficient. This would give the UK an edge over international competitors and even generate more income for the nation.
Points 4-6 include using greener fuels for personal use, public transport and flying. Point 4, accelerating the shift to zero-emission vehicles that do not emit pollutants, will significantly reduce the energy costs associated with fuelling cars for transport. Petroleum has become increasingly more expensive throughout the years, so switching to zero-emission cars will cost almost half as little as an average car.
Likewise, to point 4, point 5 will mean greener public transport like electrifying more railways or using more tax money for zero-carbon busses will decrease carbon emissions. Whilst this may mean we use more electricity, we will simultaneously be buying less petrol, so prices will not rise.
Point 6 states that net-zero aviation and green ship incentives would indicate that planes and ships will run on more sustainable fuels. Whilst this does not necessarily affect energy prices, it will decrease the cost of flying or sailing.
Point 7, greener buildings, is especially vital for a reduction in energy bills. By making homes more eco-friendly, more specifically 80% more eco-friendly than they are now, we will be utilizing renewable resources for energy instead of exploiting non-replenishable fossil fuels. This conversion will result in lower energy bills due to cheaper natural sources per kWh than non-natural sources.
Point 8, investing in carbon capture, would improve our knowledge of the process, including catching carbon when generating energy and storing it underground not to be emitted into the atmosphere. As this would create thousands of jobs and boost the economy, we would positively impact money wisely.
Point 9 includes protecting our environment through building more parks and jobs for the maintenance of these parks. By improving our environment, we protect more and more land, so there is less opportunity for fossil fuels to be dug up, meaning we would have more incentive to convert to cheaper, greener energy.
Lastly, point 10 of the ten-point plan is the development of green technologies for furthering our finances. As a greener UK would increase private investment, more money would be available for businesses. Consequently, they would be able to sell the energy to the public for lower prices. Lots of funding goes towards these renewable energy projects, improving our knowledge and ability to produce more of it, to be able to then sell it for less.
In conclusion, the government’s net-zero target will reduce energy prices, create more jobs, enhance biodiversity and protect the planet. Whilst it is impossible to predict the future costs of fossil fuels and renewable fuels, it is correct to say that the operational costs of renewable energy are less. The increased demand for them improves our knowledge and allows us to generate this energy more efficiently. You can read more about the government’s plan here.
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