Background
Rather like its contents, the government's Energy Security Strategy has an overarching theme of "better late than never" and contains a number of positives around the development and implementation of measures to mitigate against reliance on imported energy, whilst maintaining the nirvana of Net Zero by 2050.
There are some bold commitments that in part serve to highlight that, given the Tories have been in power since 2010, they have been asleep at the wheel on this issue under 3 different Prime Ministers (in other words, it is not all Boris' fault but he is not entirely blameless either).
Strategy is by definition, long term vision. Having a strategy for long term energy security is laudable and common sense. Again, better late than never.
What this does not substantively solve is the short term issue of tackling the UK's dependence on imports for almost 50% of energy raw materials. Nor does it mitigate the spiralling cost of wholesale energy prices, which will push millions into fuel poverty. That needs rapid attention and action rather than warm words.
The following link to the policy paper, "Time to pivot for domestic energy" includes a summary of the actions the government needs to take in the short term to address soaring energy prices
Let's examine the key ambitions of the Energy Security Strategy and look at what the government believes will be the key components of long term energy mix to meet the country's needs.
Nuclear
By far the biggest turnaround (or should that be U turn) is the reversal of the long term decline in nuclear as part of the UK's long-term energy mix.
A technology that the UK pioneered has been chronically neglected for investment by successive governments, blue and red, presumably to appease left wing activists, which has now been exposed for folly.
Whilst "low carbon" nuclear is currently 17% of the UK's energy mix, that figure is declining year on year and 5 of our 6 existing plants will be decommissioned by 2030, with only 1 plant currently under construction. France, which is 78% nuclear powered has 9 times more nuclear capacity than the UK.
The strategy paper acknowledges that nuclear supplies:
"a steady source of generation to complement intermittent renewables. Nuclear is the only form of reliable, low carbon electricity generation which has been proven at scale and returns more than 100 times as much power as a solar site of the same size. We can only secure a big enough baseload of reliable power for our island by drawing on nuclear. Our aim is to lead the world once again in a technology we pioneered so that by 2050, up to a quarter of our power consumed in Great Britain is from nuclear."
It is encouraging that the UK has, however belatedly, woken up to the compelling (essential) inclusion of nuclear in the long term energy mix. By building at scale through to 2050, the strategy paper argues that costs can be driven down, with each site supporting up to 10,000 jobs at peak construction.
By 2050, nuclear is forecast to deliver 24GW of power (currently 7GW) which the government believes will equate to 25% of national demand. Within this parliamentary term, 1 project will be taken to Final Investment Decision, with 2 pencilled in for the next. Critically, those 2 projects could include Small Modular Reactors, harnessing Rolls Royce technology, with a long term ambition to deliver 1 new reactor a year, instead of 1 a decade.
A new vehicle, Great British Nuclear will be set up to:
a.. Help projects through the development process and develop a resilient pipeline of potential new builds, commencing in 2023, including funding for investment readiness and throughout construction;
b.. Consider the role UK government financing can play in supporting new projects. Final contracts and construction would commence when any outstanding conditions are satisfied and projects are sufficiently mature. Any projects would be subject to a value for money assessment, all relevant approvals and future spending reviews.
The UK has 8 designated nuclear sites:
a.. Hinkley;
b.. Sizewell;
c.. Heysham;
d.. Hartlepool;
e.. Bradwell;
f.. Wylfa;
g.. Oldbury;
h.. Moorside.
with the government committed to developing an overall siting strategy for the long term.
Without compromising safety, there is a commitment to review the potential for streamlining and removal of duplication from consenting and licensing new power stations, to reduce nimbyism.
It would be churlish not to acknowledge that the government has exceeded expectations in its ambitions for new nuclear.
Hydrocarbons
The report recognises the long term significance of gas in the UK's energy mix.
North Sea Gas
The strategy accepts that to meet ongoing demand (50% of which is produced domestically), the UK is still likely to need (at least in my opinion) a quarter of the gas we currently consume by 2050.
UK produced gas has a carbon footprint well under half of imported gas (which begs the question why are we importing gas at all). The North Sea alone is estimated to hold 560Bn cubic metres of gas.
In simple terms, we will still need to produce around half of the gas we are producing now at that point (with an ambition to have reduced gas consumption by 40% by 2030).
This will be delivered by maximising the North Sea reserve, with a medium to long term term plan to phase out natural gas and replace it with hydrogen.
Gas is recognised as underpinning current electricity supply and will be a key fuel in the transition of the energy mix over the next 30 years. In the words of the strategy paper:
"We are taking a balanced approach to this unique subterranean asset. There is no contradiction between our commitment to net zero and our commitment to a strong and evolving North Sea industry. Indeed, one depends on the other".
To recognise the need to begin improving energy security in the short term, additional licences will be released in autumn 2022, improving the proportion of domestic gas on the National Grid.
New project "regulatory accelerators" will be established to reduce the lead in time for developing the most complex sites, whilst industry investment in electrification of offshore production will further enhance gas as a low carbon fuel source.
Onshore Gas (fracking)
There is a cautious softening of tone on accessing onshore gas reserves (in simple terms fracking). The British Geological Society will undertake a review of shale gas in terms of seismic impact for government to consider.
In the interim, the moratorium on fracking remains in place. Any exploration or development of shale gas that is agreed would need to meet rigorous safety and environmental standards both above and below ground.
Oil
The report is light on detail in relation to oil and omits to mention any targets for production or reduction. It confirms that an estimated 7.9 Bn barrels of oil reserves remain under the North Sea.
In terms of infrastructure, the UK currently has around 290 offshore installations, over 10,000 KM of pipelines, 15 onshore terminals and over 2,500 wells.
It is clearer however as to why the government has chosen not to levy a windfall tax on the profits of oil producers, with the industry required to invest billions in the development of "clean technologies", including hydrogen as well as carbon capture facilities.
The strategy reiterates the government's commitment of £1Bn to carbon capture usage and storage clusters ("CCUS") by 2030, with the first two sites in the North East and North West.
Coal
There is no mention of coal in the strategy paper apart from phasing out purchases from Russia. This is somewhat surprising as although coal only provides around 3% of the UK's energy requirements, 1/3 of it has historically been imported from Russia.
Renewables
The government gives itself a pat on the back for it's 10 point plan for a "green industrial revolution" which has delivered £40Bn of private investment in under 2 years. By the end of 2023, the ambition is to increase capacity by a further 15% by building on the UK's "global leadership" in offshore wind.
Don't expect to see the renewables levy removed from your electricity bills any time soon.
Offshore wind
Given the difficulties of harnessing and storing the energy produced by wind and it's unpredictability, I have concluded that the ambitious targets being set for 2030, are the brainchild of Net Zero zealots rather than scientific potential.
It is clear that the government is determined to make a success of offshore wind, including railroading through "oven ready" schemes, at pace. I remain unconvinced of the ability to store the excess energy produced by wind.
The report is somewhat more enthusiastic:
a.. Our shallow sea beds and high winds uniquely position the UK for global leadership in offshore wind and as pioneers of floating wind;
b.. Whilst maintaining high environmental standards, the government will increase the pace of deployment by 25%, with the ambition to deliver up to 50GW by 2030, including up to 5GW of floating wind;
c.. The UK's expertise in North Sea oil and gas is transferable to other sub-sea technology. We have built the world's first floating offshore wind farms off the coast of Aberdeenshire. The potential to replicate this in the Irish and Celtic sea is significant. By 2030, the government believes we will have more than enough wind capacity to power every home in Britain.
The government retains the ambition for the UK to be the Saudi Arabia of wind power, with the expectation that by 2030 over half our renewable generation capacity will be wind, generating tens of thousands of high skilled jobs (90,000 by 2030).
The report accepts that the development and deployment of offshore wind farms still takes up to 13 years, despite generally receiving public support and are a net benefit to the environment by mitigating habitat damage occasioned by climate change, whilst the unit cost of offshore wind power has fallen by around 2/3 since conception.
Commitment to offshore wind is positively effusive, with the commitment to more than halve the time it takes to bring a new wind farm on stream. This will require:
a.. Slashing consent time from up to 4 years down to 1 year;
b.. Doubling down on the importance of energy security and Net Zero by strengthening the Renewable National Policy Statements;
c.. Addressing environmental considerations at a strategic level to speed up the process while improving the marine environment;
d.. Introducing "strategic compensation environmental measures" (including for projects already in the system) to offset environmental effects and reduce delays to projects;
e.. Reforming how Habitats Regulations Assessments are carried out for all projects making applications from late 2023 to maintain valued protection for wildlife, whilst reducing reams of paperwork;
f.. Implementing an Offshore Wind Environmental Improvement Package including an industry funded Marine Recovery Fund and nature based design standards to accelerate deployment whilst enhancing the marine environment;
g.. Working with the Offshore Wind Acceleration Task Force (a group of industry experts);
h.. Establishing a fast track consenting route for priority cases where quality standards are met, by amending the Planning Act 2008 so the relevant Secretary of State can set shorter examination timescales.
Onshore wind
In recognition perhaps of the polarising views of the public on clusters of wind turbines on the skyline, there is rather less detail and ambition in this energy source, despite the claim that it is one of the cheapest forms of renewable power.
The government will prioritise putting local communities in control of whether or not they wish to have a wind farm and will not introduce wholesale changes to current planning regulations.
Recognising that the scope for expansion of onshore wind farms in England in particular may be limited, the government will consult on developing local partnerships for a limited number of supportive communities who wish to host new onshore wind infrastructure in return for benefits, including lower energy bills. The consultation will consider how clear support can be demonstrated by local communities, local authorities and MPs.
UK onshore wind capacity is currently 14GW of onshore wind, with a strong pipeline of future projects in Scotland. The government will improve national network infrastructure and, in England, support a number of new projects with strong local backing, whilst collaborating with the Scottish Parliament to further develop pipeline opportunities and Welsh Assembly to improve grid connections.
Finally, the government will look at how to support the repowering of existing onshore wind sites when they require updating or replacement, through technological advances to enhance capacity and "provide new opportunities for communities to benefit".
Solar
Solar is currently producing 14GW of capacity through a combination of large scale projects to smaller scale rooftops.
The cost of solar infrastructure has fallen by around 85% in the last 10 years and can be installed in a day on a domestic roof, with a 400% increase in deployment expected by 2035. The removal of VAT on domestic solar infrastructure until 2027 is a further nudge by reducing capital cost.
To support the proliferation of solar panel installation, the government is reviewing facilitating low cost finance from retail lenders to drive up installations alongside other energy efficiency measures.
Design performance standards will also be introduced to make installation of solar panels and other renewables, the presumption in new homes and buildings.
The government plans to reduce bills and increase jobs by:
"radically simplifying planning processes with a consultation on relevant permitted development rights and will consider the best way to make use of public sector rooftops".
The report recognises the sensitivities around ground based solar farms. The government will consult on planning rules to favour development on non-protected (e.g. green belt) land (particularly low value sites or those that have previously been developed (known as brownfield sites)) but respecting where community opposition is strong. Use of greenfield sites will ideally be avoided or at worst mitigated through compensation.
The government will seek to maximise the efficiency of land use by co-locating solar farms with other functions (e.g. agriculture, onshore wind generation, or storage).
Tidal and geothermal
Many commentators have mused on the feasibility of utilising our island status, given tidal flows are predictable for many decades ahead. A short paragraph confirms the government will "aggressively explore renewable opportunities afforded by our geography and geology, including tidal and geothermal".
I won't hold my breath.
Hydrogen
The report acknowledges that hydrogen is currently all but non-existent in today's energy mix but that technology will change this in the short term, recognising the potential multiple end uses of hydrogen both as a fuel and for its long term storage capabilities.
It is envisaged that by 2030, subject to establishing value for money, 10GW of hydrogen power will be available to the National Grid, with the potential for hydrogen to become 20% of total energy mix in the long term. The government intends to use surplus renewable power to make hydrogen, to reduce overall electricity costs to end users.
The report states:
"Hydrogen is the most abundant chemical element in the universe, but needs releasing from water, hydrocarbons, or other organic matter before we can use it. The UK will look to be a leader in developing a domestic source of this super-fuel, in this ever-increasing internationally competitive space. And we fully support hydrogen as a relatively frictionless way to decarbonise our lives in the near-term".
Hydrogen production is predominantly derived from 3 methods:
a.. "Blue" hydrogen splits natural gas into hydrogen and carbon dioxide, with the carbon captured and stored;
b.. "Green" hydrogen uses electrolysis, passing electricity through water to separate out the hydrogen and oxygen;
c.. "Pink" hydrogen also uses electrolysis, but with energy from a nuclear power plant.
By 2025, the report states the ambition is to have:
a.. Business models for hydrogen transport and storage infrastructure, which are essential to growing the hydrogen economy;
b.. A hydrogen certification scheme to demonstrate high grade British hydrogen for export and ensure any imported hydrogen meets the same standards.
Infrastructure & ownership
The report recognises that accelerating affordable, "clean" electricity requires a parallel acceleration in supporting network infrastructure. It also recognises the network has been slow to evolve, with a target to halve the time it takes to construct new infrastructure, given the expectation that electricity demand will double by 2050.
There are 2 priorities for this decade:
- Anticipating need to minimise cost and public disruption;
- Flexibility in matching supply and demand to minimise energy waste, through "an efficient, locally-responsive system (which) could bring down costs by up to £10Bn a year by 2050".There is acceptance that building ahead of need, where good value for money often means paying more in the capital cost of constructing an asset that will not be efficiently utilised immediately but is the most cost effective option over the long term and mitigates repeated disruptive works to continually upgrade the system.
There is also recognition of the need for competition and that the private sector will deliver far more efficient distribution of power than a state owned system.
How to solve the Russian problem
The Russian invasion of Ukraine has undoubtedly contributed to the government's belated recognition of the importance of energy security, whilst the stratospheric increases in wholesale energy costs, which the UK is excessively exposed to due to over reliance on imports, has forced a strategic pivot.
To reduce global reliance on Russian fossil fuels, the UK is committed to phasing out purchasing Russian oil and coal by the end of 2022 and will end imports of Russian liquefied natural gas as soon as possible thereafter.
The government intends to strengthen relationships with non-Russian OPEC countries and the US to support market stability through the availability of alternative supplies of oil and gas.