Announced last night (6 April), the highly anticipated British Energy Security Strategy sets out steps to boost long-term energy independence. But with the Covid-19 pandemic and wider disruption forcing a limit on spending – and Downing Street disagreements between No. 10 and No. 11 – it was hard to predict exactly what would be contained.
Some sectors received much more backing than others. Here are three winners and two losers, with potentially massive implications for the future of energy supply in the UK – and the engineering roles that will underpin it.
Winner: Nuclear energy
Nuclear energy was the big winner. With a tentative aim of 95% of electricity being low-carbon by 2030, the strategy includes plans for a ‘significant acceleration’ of nuclear development. It includes an ambition of up to 24GW of capacity by 2050, representing about a quarter of projected demand.
Small modular reactors (SMRs), such as those in development at a Rolls-Royce-led consortium, will form a “key part” of the nuclear project pipeline, the government announcement said – subject to technology readiness from industry.
“A new government body, Great British Nuclear, will be set up immediately to bring forward new projects, backed by substantial funding, and we will launch the £120m Future Nuclear Enabling Fund this month,” the announcement added.
“We will work to progress a series of projects as soon as possible this decade, including Wylfa site in Anglesey. This could mean delivering up to eight reactors, equivalent to one reactor a year instead of one a decade, accelerating nuclear in Britain.”
Loser: Onshore wind
Early drafts of the strategy reportedly included plans to dramatically increase onshore wind capacity, but supporters were left disappointed after the prime minister backed down in response to backbencher pressure.
Instead of proposals for 30GW of onshore farms, the strategy merely included plans to 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.”
Offshore wind, on the other hand, received significant backing. The strategy includes a new ambition of up to 50GW of capacity by 2030, more than enough to power every home in the UK, with up to 5GW from floating turbines in deeper seas.
“This will be underpinned by new planning reforms to cut the approval times for new offshore wind farms from four years to one year, and an overall streamlining, which will radically reduce the time it takes for new projects to reach construction stages while improving the environment,” the announcement said.
The increased ambition means the offshore wind sector could support 90,000 jobs by 2028, up from the 60,000 previously predicted.
Dan McGrail, chief executive of trade organisation RenewableUK, said: “The new targets mean that our world-leading offshore wind industry will do the heavy lifting in getting Britain permanently off the hook of gas power by boosting our nation's home-grown energy supply. Reforms to speed up the planning system and how quickly we connect new offshore wind are essential to meet these new ambitions.”
Winner: Hydrogen
Despite some slightly non-committal language – an “aim” to double the government’s “ambition” – hydrogen was another clear winner in the strategy. That ambition would see up to 10GW of low-carbon hydrogen production capacity by 2030, with at least half ‘green’ hydrogen, coming from sources such as excess offshore wind power.
“This will not only provide cleaner energy for vital British industries to move away from expensive fossil fuels, but could also be used for cleaner power, transport and potentially heat,” the announcement said.
Producing hydrogen using electricity from wind “will provide valuable flexibility to our future clean energy system, replacing gas in a wide variety of sectors like industry, transport and heating,” said RenewableUK’s McGrail.
New research that was separately released today showed that over three quarters (77.7%) of people would support the generation and distribution of alternative, low-carbon gas through the existing grid, to replace the imports of natural gas from countries such as Qatar and Russia.
The survey of 2,000 UK consumers, conducted on behalf of trade association Energy and Utilities Alliance, also found almost three quarters (73.8%) of people would support development of low-carbon gas boilers that could easily swap with existing boilers to help meet the UK’s climate change targets. Almost two-thirds (64.3%) said they would choose a low carbon boiler if replacing their heating system.
Loser: Household energy efficiency
The strategy received criticism for a lack of focus on household energy efficiency. The announcement includes a VAT cut on the installation of energy efficiency projects such as solar panels, insulation and heat pumps to 2027, but many had hoped for more emphasis on measures to cut energy waste and limit the increase in bills.
Former UK energy minister and the prime minister’s trade envoy Charles Hendry called it a “major misjudgement” by the treasury, and said a reported delay until autumn for new energy efficiency measures “will force large numbers of very vulnerable people to be cold next winter, when they need not be.”
Winner: Oil and gas
An expansion of oil and gas hardly seems to fit within plans for massive decarbonisation, but the strategy nonetheless announced plans for a licensing round for new North Sea oil and gas projects, planned to launch in autumn.
A new ‘taskforce’ will provide bespoke support to new developments, the announcement said, “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”.
According to energy and chemicals company Wood Mackenzie, demand for oil and gas will continue to outstrip supply, with a wide range of uncertainty. In 2030, production is predicted to be between 0.6-1.6m barrels of oil equivalent per day, with an even wider range for demand.
Research director Neivan Boroujerdi said: “By 2050, UK North Sea production will have largely ceased. But even in a ‘net zero’ scenario demand will persist, with emissions being offset by carbon capture and storage (CCS) and nature-based solutions. Current levels of production could be maintained for the next decade, underpinning energy security and safeguarding jobs. But the UK is sorely lacking in gas and will be heavily reliant on imports in all scenarios.”
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