Battery strategy goes flat: Net-zero target at risk Contents

Summary of Conclusions and recommendations

Applications of batteries and fuel cells

1.In order to make the transition to low-carbon technologies, the heavy road freight sector needs urgent clarity about which technological options are best-suited to its needs, and firm commitments that infrastructure will be deployed at scale. Clear deadlines from the Government, such as a finalised timetable for ending the sale of HGVs, would focus efforts as is happening in the light road sector. (Paragraph 28)

2.We recommend that the Government promptly confirms the end of sales of new diesel HGVs from 2040 or earlier. This will provide a clear timeline for research and development of technologies (including batteries and fuel cells), manufacture of vehicles and deployment of infrastructure. (Paragraph 29)

3.Electrification of the railway network (using cables and live rails) will have to be strategic and extensive, to allow greater use of electric trains and so that those sections left without electrification are within the capabilities of trains powered by batteries and fuel cells. Otherwise, sections may be left for which decarbonisation is more expensive or more challenging. This poses the risk that the necessary increases in freight and passenger rail may not occur, and indeed that some usage could shift to roads. (Paragraph 36)

4.The Government must ensure that the railway electrification programme is accelerated in order that it reaches as far as is economically and technically feasible by 2040, when diesel trains will be phased out. The development of battery and fuel cell trains should be supported to serve those parts of the network that remain non-electrified. (Paragraph 37)

5.The aviation sector is very challenging to decarbonise, particularly its long-distance routes. However, battery and fuel cell technologies could offer solutions for shorter routes, and their application to electric vertical take-off and landing aircraft could allow aviation to play a more flexible role in national transport and emergency services. (Paragraph 44)

6.In order to decarbonise the electricity system by 2035 and to meet at least a doubling of demand by 2050, there need to be large upgrades to network capacity, smart controls need to be implemented, and a wide array of storage technologies must be deployed. Without batteries of different scales and potentially fuel cells drawing on stored hydrogen, increasing amounts of renewable energy will be wasted. Without smart operation and storage, the costs of grid expansion will be significantly higher. For larger grid-connected batteries, there is merit in developing alternatives such as sodium-ion and flow batteries. For smaller batteries in homes and businesses, there will need to be more sophisticated tariffs and control systems to optimise the benefits. To provide inter-seasonal storage, there may be a need for grid-scale fuel cells to be deployed as part of the UK’s wider hydrogen strategy. (Paragraph 57)

7.The Government and Ofgem must ensure that electricity network regulations and incentives are aligned to bring about the necessary investment in networks, storage and smart systems. They must ensure that energy market rules facilitate more sophisticated services, including tariffs to enable demand shifting, extensive use of battery storage, and smooth interactions with hydrogen systems. (Paragraph 58)

8.The UK could make better use of fuel cells in conjunction with electrolysers in a range of stationary applications. Trials of local and community-scale systems could quickly be replicated, to increase the use of excess renewable electricity to produce hydrogen for transport, heating and power. The use of fuel cells in buildings connected to the gas grid would have merit if those buildings were supplied with ‘low-carbon’ hydrogen. (Paragraph 63)

9.A clear strategy is needed for large-scale hydrogen storage in order to make better use of excess renewable electricity (by producing hydrogen via electrolysis), and in the future to be coupled with hydrogen produced using advanced nuclear reactors. (Paragraph 65)

10.In order to give individuals and companies the confidence to invest in electric vehicles, there needs to be faster deployment of infrastructure for charging, including rapid chargers in towns and on the strategic road network. Charging has to be accessible to all, with suitable options provided for those without dedicated parking spaces or driveways. In the longer-term, wireless charging could be important, and should be developed and evaluated for transport applications. The user experience has to be simplified, with standardisation of technology and payment methods. (Paragraph 75)

11.The Government should ensure electric vehicle charging for all users, including by accelerating the expansion of the public charging network, to deliver around 325,000 charging points by around 2032, as recommended by the Committee on Climate Change. This will require supporting local authorities to develop and implement strategies for deployment and maintenance of public charging-points. Regulations to standardise charging and payments methods should be introduced at the earliest possible time. We ask the Government to confirm the legislative timings in its response to this report. (Paragraph 76)

12.In order for companies to have greater confidence in hydrogen vehicles, there needs to be an expansion of the hydrogen fuelling network, particularly on the strategic road network to support road freight. (Paragraph 79)

13.The Government should take steps to build public confidence in the safety of batteries and hydrogen technologies. The concerns of residents and drivers about the fire safety of batteries must be taken seriously. Action must be taken to mitigate the risks of existing battery installations, including more stringent safety standards. Regulations and incentives should be used to drive development of safer battery technologies in transport and stationary applications. Effective fire-fighting protocols need to be developed, with provision of training and equipment for fire fighters, other first responders and vehicle maintenance workers. (Paragraph 90)

Technological developments

14.There is merit in the automotive sector continuing to adopt incremental improvements in lithium-ion technology, to make the best use of existing investments in manufacturing. However, it is important that manufacturing processes are adaptable so that non-lithium-ion chemistries can be adopted in future without incurring the full costs of establishing new manufacturing facilities. (Paragraph 102)

15.The UK’s current investments in battery research and development are welcome, but need to be increased and put on a longer-term footing if the UK is to compete internationally. Proposals for additional funding for research and development in the UK should be seen in the context of the Government’s ambition for the UK to be a ‘science superpower’. The Government has made clear spending commitments for research and development: public funding is to reach £22 billion per year by 2024–25 (up from around £15 billion in 2021–22); and total annual UK spending on research and development is to reach 2.4% of GDP by 2027. (Paragraph 114)

16.UK Research and Innovation should prioritise initiatives for batteries and fuel cells in its bid for the 2021 Spending Review. It should seek to support technologies all the way through the technology readiness levels to manufacture. (Paragraph 115)

17.The Government should provide additional funds for the development of batteries and fuel cells, which are essential for achieving the net-zero target and for achieving the UK’s industrial ambitions. This funding can be provided within the budget increases for research and development out to 2024–25. Funding should be comparable to international competitors, and should have long-term certainty in order to build the UK’s research base, develop momentum and ensure that advances are fully exploited. (Paragraph 116)

18.UK Research and Innovation should expand the remit of the Faraday Institution and the UK Battery Industrialisation Centre to include stationary batteries, with commensurate additional funding from Government. (Paragraph 117)

19.UK Research and Innovation should expand its portfolio for developing next generation batteries, with commensurate additional funding from Government. This will help to establish a long-term advantage for the UK, for example in solid-state batteries for vehicles and sodium-ion batteries for stationary storage. (Paragraph 118)

20.Fuel cells will benefit from ongoing innovation to improve performance and durability and to reduce costs. They are well-suited to a range of applications, but the sector may require support to tailor the technology to each application. (Paragraph 132)

21.The current funding for fuel cell research and development is inadequate, and the sector needs to be supported through the establishment of initiatives and organisations akin to the Faraday Institution and the UK Battery Industrialisation Centre. These proposals should be seen in the context of the Government’s commitments to significantly increase public funding for research and development. (Paragraph 135)

22.The Government should establish organisations to support research and scale-up for the fuel cell and hydrogen sector, equivalent to the Faraday Institution and the UK Battery Industrialisation Centre, guided by a clear analysis of where research and demonstrations are needed. (Paragraph 136)

Strategic issues facing the UK

23.The UK is competing with other countries to attract automotive battery manufacturing. Failure to do so would likely lead to vehicle manufacturing moving elsewhere. Recent announcements of future increases in the manufacture of cells and electric vehicles are welcome, but are still insufficient to meet anticipated demand. The Government will need to commit further funds for gigafactories, supply chains and training ahead of the 2027 and 2030 deadlines, to ensure that the UK’s automotive sector can maintain manufacturing at its current scale. These resources will have to reach from research through to manufacturing, and will have to be commensurate to those of international competitors. (Paragraph 149)

24.Despite the urgency of the 2027 and 2030 deadlines, the UK also needs to plan on longer timescales. Manufacturing and supply chains require ongoing innovation in order to remain competitive, and need to be future-proofed to allow improvements in battery technology to be implemented with minimal cost and disruption. (Paragraph 150)

25.The UK’s fuel cell and electrolyser manufacturers have done well to establish themselves internationally despite being largely neglected by UK policy and public funding. These companies need support to expand manufacturing in the UK, compete internationally and contribute to the UK’s hydrogen ambitions. (Paragraph 159)

26.The development and uptake of fuel cell technologies by the transport sector will be aided by clear regulatory signals, in particular the ending of the sale of new diesel HGVs, on which the Government is currently consulting. (Paragraph 160)

27.The Government should publish its hydrogen strategy this summer. This strategy must be coordinated with the Government’s other decarbonisation strategies to enable use of hydrogen in those sectors for which it is the most viable option. The hydrogen strategy should make effective use of the UK’s expertise in fuel cells and electrolysers, both to support UK decarbonisation efforts and to seek a leading role internationally. (Paragraph 161)

28.The Government should take action to ensure that there are sufficient skilled workers in the automotive sector and conducting research into batteries and fuel cells. 1) There needs to be more support for training to enable the automotive sector’s transition to electric vehicles. 2) There need to be pipelines for training more researchers and engineers and supporting their longer-term careers. 3) There needs to be greater flexibility for recruiting international staff for research and manufacturing, including by reducing the costs associated with visas, particularly for short-term contracts. (Paragraph 166)

29.The Government should produce a critical raw materials strategy. This strategy should make use of the UK’s natural resources such as Cornish lithium, and should utilise the UK’s expertise in mineral processing to incentivise collaboration from countries with larger natural resources. (Paragraph 175)

30.The Government should set out clear plans for developing industrial-scale recycling in the UK. As part of this, it should require manufacturers to incorporate ‘sustainability by design’ and to conduct full life-cycle analyses of the environmental and social impacts of batteries and fuel cells. The Government should introduce incentives and regulations to speed the transition to more sustainable technologies. (Paragraph 176)

31.The Government should explain to industry what will replace the industrial strategy, and should promote its industrial objectives clearly, both domestically and internationally. Its objectives should be supported by investments in the battery and fuel cell sectors, commensurate with those of the UK’s international competitors, including de-risking expansion of manufacturing and supply chains in order to attract the significant private sector investment that is required. (Paragraph 182)

32.The UK’s current trajectory of battery manufacture risks missing the Government’s target for the transition to electric light road transport, such that the UK may not be able to retain its automotive industry at its current scale. The situation is similarly serious for heavy transport and stationary energy systems, where lack of regulations and incentives have hindered decarbonisation using batteries and fuel cells. (Paragraph 188)

33.The Government’s plans for decarbonisation and industrial growth lack detail about how it will overcome significant challenges to achieve ambitious targets with short deadlines. There was a stark disconnect between the optimism of Ministers and officials that UK industries can transition in very tight timescales, and the concerns of our other witnesses that the UK is far behind its competitors and faces significant challenges with innovation, supply chains and skills. (Paragraph 189)

34.The Government should publish its decarbonisation strategies as a matter of urgency, and make a series of key decisions by the end of 2021, as set out above. We ask that the Government explains in its response to this report how it will meet each of the deadlines that we have discussed, with details of how it will ensure that the UK has the necessary research, skills, supply chains and finance. (Paragraph 190)

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