When it comes to the energy transition, a clear plan for the road ahead is still very much needed, explains William Hazell, sector lead for carbon capture, usage and storage (CCUS) and hydrogen at Ramboll 

Despite various bumps in the road, 2024 may just prove to be a watershed year for the UK’s energy transition.

The Labour Government seems determined to drive the delivery of clean energy across the UK. 

Part of the plan is to inject multi-billion-pound funds into 11 new green hydrogen projects and the first two carbon capture and storage (CCS) clusters in 2025-26.

Looking out into the year ahead, it will be important to stimulate projects that have been stagnating in the pipeline for a while now.

As far as accelerating development, and providing the sector with some optimism going forward, the chancellor, Treasury and the Department for Energy Security and Net Zero can congratulate themselves on a job well done.

Crucially, however, the chancellor neglected to lay out her plans for stimulating the ongoing growth of the project pipeline beyond this much expected level of investment in the Autumn Budget.

We have to accept that we are already behind the curve when it comes to realising our net zero ambitions, so this is particularly concerning. 

If we are to avoid losing further ground, the funded projects that are currently now moving into the development pipeline should only be the beginning of a much larger scale investment and project realisation.

Only through such investment, which would ideally include a mixture of government and private-sector funding, will we achieve the sustainable transition of the energy sector needed to meet our climate goals.

This will of course take time – projects are not going to reach final investment decisions (FIDs) overnight.

However, many projects have been developing for years and just need that final vote of confidence. 

That said, if an opinion forms that a project lacks direction or is subject to unexplained and prolonged delays, this can quickly become a self-fulfilling prophecy and lead to projects being shelved or even cancelled, a trend that will only cease to be with adequate governmental communication and coordination going forwards in 2025 and beyond.

Understandably, industry stakeholders and private investors want to know what is next and rely on the government to offer them clarity, particularly when it comes to policy and funding decisions.

Confidence is drawn from certainty, and in turn confidence is what keeps projects progressing towards FIDs.

Governments that do not create an environment conducive to investor and developer confidence may soon find that those investors turn their attentions towards other more hospitable markets or are simply deterred from developing altogether.

We have already seen developers rowing back on projects through 2024 with some directly attributing the decision to a "continued lack of government policy certainty".

This said, it should not be forgotten that the government is taking steps in the right direction.

If successfully implemented, the proposals laid out in its first budget will make the UK one of the first countries in the world to get a full chain of CCS and hydrogen projects off the ground.

To add to this positive rhetoric, the secretary of state for energy security and net zero made a forceful declaration at November’s COP29 that the energy transition is not only economically the right thing, but also “unstoppable”.

However, given what is at stake, we cannot afford to rest on our laurels (or our words) and overlook the fact that there is still a huge amount of work to be done if the UK is to achieve its stated aim of becoming a ‘clean energy superpower’.

Without accompanying action plans and clear financial support mechanisms, aspirational statements risk falling flat.

This much is very clear: Britain doesn’t just need to get “back on the map”, it needs a very comprehensive roadmap of its own. 

It has to be recognised that the energy transition today is driven by environmental goals and not economic value.

Therefore, the government needs to pay forward to make it happen.

However, this is an investment, which if well placed could have significant benefits for UK PLC in the future.

In this regard, the setting up of GB Energy, may also prove to be a trump card. If they can invest in some of the strategic, higher risk, midstream infrastructure - for example, pipeline or storage facilities - it will ultimately stimulate a comprehensive non-fossil fuel economy.

A further strong indication that the tides are indeed turning is the government’s appointment of eight leading academic and industry experts to the Clean Power 2030 Advisory Commission.

Bringing in industrial, technical and scientific perspectives will ultimately expedite the decarbonisation of the electricity grid and coupled with the expected issue of the government’s Clean Power 2030 Action Plan in December, this further signals that 2024 has been a year with some important strategic, impact-led moves. 

Long-term clarity and commitments from the Government, especially regarding funding for energy transition projects, will be critical to the UK achieving its clean energy goals. Without this, it is likely that the many other countries that boast similar ambitions will press on and potentially leave the UK in their wake.

In particular, it is to be hoped that the necessary financial commitments are provided to back-up what has now been kickstarted.

Here’s hoping that 2025 will bring the structured support needed for the ‘what’s next’ projects, so we can maintain the positive, yet fragile momentum, gained in 2024.