The Government’s Energy Security Strategy has finally been published.
It’s been through a large number of drafts and been delayed whilst BEIS, Treasury and Number 10 have argued, sometimes with themselves, about the content. The compromises are obvious, and the anticipated clarity about how the UK strikes the right balance in heading towards net zero while securing domestic supply and keeping a lid on costs is far from there.
While prompted by rocketing energy bills driven by the Ukraine crises, in reality, this strategy is well overdue as recent policy has been to back intermittent renewables with no real plan to replace the fossil fuel baseload and spinning reserve that continues to be decommissioned. Ironically, while it tackles the longer term issue, the immediate issue about energy bills doesn’t change and the impacts won’t be realised for at least 5 years
In the longer term, the plan will back nuclear energy to supply carbon-free baseload power, dramatically ramp up offshore and solar renewables, and create a market for hydrogen to wean us off imported gas. Intermittent renewables will be balanced by the production of hydrogen when it’s too windy and sunny to use excess power.
Along with its press release, the government has published several quotes from senior industry leaders who are supportive of the strategy. For example, Centrica’s CEO said that “the British Energy Security Strategy is something we can all get behind to protect the nation and help households today and over the long term”, whilst Shell’s CEO commented that “this is a once-in-a-generation opportunity to ensure an orderly transition to net zero while bolstering the UK’s energy security”.
Politically, the strategy has not landed as well. Ed Miliband, Labour’s shadow climate change and net zero Secretary, called the plan “deeply flawed”, stating that the nuclear power stations that the government is talking about today won’t be built for at least a decade. Kwasi Kwarteng responded to criticisms by admitting that “the strategy is more of a medium term, three, four or five-year answer”. The overall consensus is that today’s announcement will not alleviate the immediate pressures facing consumers and businesses.
Please see the key points of the strategy below.
- Nuclear: Significant acceleration of nuclear, with an ambition of up to 24GW by 2050 to come from nuclear, representing up to around 25 percent of our projected electricity demand. Subject to technology readiness from industry, Small Modular Reactors will form a key part of the nuclear project pipeline. A new government body, Great British Nuclear, will be set up immediately to bring forward new projects, backed by substantial funding, and the £120m Future Nuclear Enabling Fund will launch this month. The Government will work to progress a series of projects as soon as possible this decade, including Wylfa in Anglesey, delivering up to eight reactors, equivalent to one reactor a year instead of one a decade.
- Offshore wind: New ambition of up to 50GW by 2030 – more than enough to power every home in the UK – of which the Government would like to see up to 5GW from floating offshore wind in deeper seas. This will be underpinned by new planning reforms to cut the approval times for new offshore wind farms from 4 years to 1 year and to radically reduce the time it takes for new projects to reach construction stages.
- Oil and gas: A licensing round for new North Sea oil and gas projects planned to launch in Autumn, with a new taskforce providing bespoke support to new developments, recognising the importance of these fuels to the transition and to our energy security, and that producing gas in the UK has a lower carbon footprint than imported from abroad.
- Onshore wind: The Government will consult on developing partnerships with a limited number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills.
- Heat pump manufacturing: The Government will run a Heat Pump Investment Accelerator Competition in 2022 worth up to £30m to make British heat pumps, reducing gas demand.
- Solar: The Government will also look to increase the UK’s current 14GW of solar capacity which could grow up to 5 times by 2035, consulting on rules for solar projects, particularly on domestic and commercial rooftops.
- Hydrogen: The Government will aim to double our ambition to up to 10GW of low carbon hydrogen production capacity by 2030, with at least half coming from green hydrogen and utilising excess offshore wind power to bring down costs. This could be used for cleaner power, transport and potentially heat.
- Jobs: The strategy will increase the number of clean jobs in the UK by supporting; 90,000 jobs in offshore wind by 2028 – 30,000 more than previously expected; 10,000 jobs in solar power by 2028 – almost double our previous expectations; and 12,000 jobs in the UK hydrogen industry by 2030 – 3,000 more than previously expected.