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Sustainability

Energy spotlight: EDF

Our Energy Transition Report highlights how businesses in the energy ecosystem could help accelerate the UK’s progress towards net zero.

At a glance

  • Supporting industrial customers to decarbonise their energy use and reduce their emissions is essential to achieve net zero.
  • Achieving net zero hinges on collaborative efforts spanning government-industry partnerships, industry-startup alliances, and inter-industry cooperation.
  • A partnership between established industries and startups brings together experience and innovation.
  • Clear and consistent supportive messaging across government, regulator, industry and consumer groups is required to show businesses the opportunities from low carbon options.
  • Low carbon energy sources including nuclear, as well as renewable sources such as wind and solar, are pivotal in the UK's transition to a greener energy system.

Download our report  to read more about the opportunities from the path to net zero.

How is EDF adapting operations and strategy to meet net zero targets?

“During 2023 we are proud to have reduced the carbon intensity of our generation to 0g/kWh with the closure of our last fossil fuelled power station, West Burton,” says EDF’s Investor Relations team. “As a large supplier to households, business and public sector customers in the UK, the electricity we generate today comes exclusively from zero carbon nuclear and renewable sources.

We have a pipeline of renewable projects under development across on and offshore wind, solar and storage technologies. As a developer of zero carbon nuclear power, we are constructing two new reactor units at Hinkley Point C in Somerset, and planning further new units at Sizewell C. We have invested over £4bn in 2023 in building and maintaining Britain’s nuclear and renewable generators.”

How is EDF supporting UK businesses and communities with the net zero transition?

“Our solutions include electric mobility (through charging company Pod Point), low carbon heating, and on-site photovoltaic electricity and batteries.  

Our business customers can choose to purchase zero carbon or renewable backed electricity. We also offer long term power purchase agreements that link a customer directly with a specific renewable generator.

With increasing amounts of variable renewable generation connected to the grid, the ability for both generators and customers to be flexible about when they produce and use energy is expected to be an important part of how Britain will achieve net zero.

We’re participating in the national Demand Flexibility Service, which rewards households and businesses for shifting their electricity usage outside of peak hours. We are also part of government-backed research projects looking at new customer solutions to manage the need for flexibility in our future decarbonised energy system.”

How is EDF coordinating within the UK energy ecosystem to transition to net zero?

“Collaboration between industry and government is crucial for aligning business practices with national climate goals. Government policies and incentives can steer industries towards sustainable practices, while industry feedback can inform realistic and effective policymaking.

The UK government’s Net Zero Innovation Portfolio has been a powerful driver of innovation across 10 priority themes, and we have benefited from funding – from green hydrogen to heat pumps.

Collaboration with academia is crucial to help new technologies emerge. EDF does this through government-funded collaborations, joint PhDs, Masters projects and regular knowledge sharing.

The UK has a strong ‘climate tech’ ecosystem with a particular focus on energy and mobility. Collaboration is crucial to support this ecosystem as it tackles the challenges involved in developing technologies, engaging consumers, building trials, raising capital and scaling.

Dedicated climate tech incubators and groups such as the Climate Tech Supercluster, of which EDF is a founding partner, have a crucial role to play.

Collaboration between existing industry participants, and between industries, is also important. Industries can share best practices, develop joint sustainability standards, and collaborate on large-scale projects.

This is particularly important at the scale of industrial clusters, where a systems approach can help industries build and share resources.”

 

What else could accelerate the shift to low carbon energy solutions?

  • Effective regulatory frameworks to signal and support investment
  • A joined-up approach to the planning and construction of infrastructure, network capacity and generation
  • Successful engagement of customers to participate in the net zero transition.

“In the UK, the existing Contracts for Difference mechanism has been effective in bringing forward large numbers of new low carbon generation projects while ensuring customers benefit from the stable costs of the electricity produced.

Regular auctions for new contracts, with realistic auction parameters, will provide clear signals of need for future investment in new projects. For these low carbon generation projects to be delivered, the ability to connect to the electricity network in reasonable timeframes is important.”

What are some of the barriers?

“At present, a lack of network capacity is delaying progress on new low carbon projects, although we are pleased to see this challenge is now widely recognised by policy makers in the UK, and steps are being taken to enable more rapid expansion of network capacity as well as to better manage the large queues of projects waiting to connect.

In part, this relies on being able to demonstrate to customers that there are benefits available to them. At present, high capital costs (for example of fitting on-site solar PV), or higher running costs (in the case of lower carbon electric heating compared to gas heating), are barriers to participating in the net zero transition for many customers.”

What else could help deliver a decarbonised and resilient energy system?

“A combination of nuclear power, renewables, energy storage and flexibility. By also including maturing technologies like green hydrogen from electrolysis and emerging technologies like direct air capture, the UK could have the capability to use low carbon electricity to decarbonise UK industry.

In addition to large nuclear stations such as Hinkley Point C, advanced nuclear technologies, including small modular reactors (SMRs), can complement renewable energy sources by providing controllable power output that is not dependent on weather conditions.  Advanced modular reactors (AMRs) could provide industrial-grade heat at scale.

The country's geographical advantage, particularly in wind energy, allows for significant further use of renewable resources. Renewables contribute to energy diversification, reducing dependence on fossil fuels and enhancing energy security.

Energy storage systems are key in managing the variability in output that is inherent in most forms of renewable generation.  Technologies like batteries can store excess energy generated during peak production periods and release it during demand spikes or low production periods, helping to balance supply and demand. The race is now on to find and scale long-duration energy storage that can store electricity for more than four hours, to help to manage prolonged periods of low wind or high demand.

Incorporating hydrogen produced through electrolysis adds another dimension to the UK's energy transformation, providing the electricity used is from low carbon sources. Hydrogen can be used as a versatile energy carrier, especially in sectors hard to decarbonise, like heavy industry and transportation.

Direct Air Capture (DAC) technology, albeit in its nascent stages, offers promising prospects in carbon reduction. By actively removing CO2 from the atmosphere, DAC complements emission reduction efforts. It could become an integral part of the UK's strategy to achieve net-zero emissions, especially in sectors where carbon reduction is challenging.

Together, these technologies provide a comprehensive framework for a sustainable, secure, and efficient energy system in the UK.” 

Check our hub for more insight from some of the UK’s most influential energy players.

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This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

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