Thu. Jul 7th, 2022

The UK’s energy security strategy has been characterized by one thing: delay.

There was an urgent need for action after Russia’s invasion of Ukraine, which upended notions of energy security and made self-evident the need to accelerate the shift to cleaner, cheaper, domestic sources of renewable energy. Yet it has taken weeks of government wrangling to produce Thursday’s insipid effort.

The result has been hobbled by penny-pinching at the Treasury, which apparently can not get itself on to a war footing even when there is a land war in Europe. It has also been gutted by the myopia of backbenchers, who can only see as far as a constituency view to which they wrongly presume voters would be aghast to add a wind turbine.

It is heavy on grandiose long-term targets for nuclear, wind and hydrogen, and light on anything that would make a difference in the near term on security, climate or bills. Overall, it flunks on two basic issues: demand and delivery.

It is bizarre and self-defeating not to tackle energy efficiency head-on. This does not require nanny-statism about driving speeds. (Why explaining how to run a boiler efficiently is so offensive to British sensibilities remains a mystery). UK policy has repeatedly failed to patch up the nation’s aging, leaky housing stock: household installations on energy efficiency have fallen 90 per cent since 2012.

The absence of action is bad for energy security. A package of measures could cut demand by the equivalent of 80 per cent of the UK’s Russian gas imports this year, says think-tank E3G. By 2025, efficiency, clean heat and renewables such as solar could replace four times the gas we import from Russia.

This also represented the best chance of helping with the cost of living crisis, with one in three households facing fuel poverty when bills rise again later this year. E3G reckons households would see a saving of £ 130 to £ 170 on average.

Even for the Treasury, this should be low-regret investment: there is a clear market failure, and the work and supply chain is needed in any conceivable energy transition scenario. On a basic level, if the government is putting money into big, shiny projects like nuclear, it should also want to stop the expensive electricity produced leaking unnecessarily out of draughty windows.

There was little to inspire confidence in the delivery of those ambitious projects either. Clear commitment to new nuclear is welcome but it remains too expensive and too uncertain to underpin the net zero transition. Even if soaring wholesale prices have recently flattered its economics, power from Hinkley Point would still cost more than £ 125 per megawatt hour compared to forecast market prices of £ 95 in 2025.

The target for nuclear to meet a quarter of electricity demand by 2050 requires at least four – if not five or six – more Hinkleys. (Small modular reactors are unlikely to play a major role in that timeframe.) This needs a new, untested funding mechanism. It also requires a cookie-cutter production line approach, argues energy analyst Peter Atherton, replicating one technology better and faster each time – a method the UK has previously resisted.

Elsewhere, the government mainly upped targets that had already been set as part of various strategies last year. It caved to concerns about onshore wind, one of the quickest technologies to deploy, pledging only to consult on “limited” opportunities. This is silly given that polling suggests 70 per cent support for onshore wind within communities. It also bodes ill for other debates if even war and deprivation cannot see off unease about the view.

Meanwhile, increasing an already ambitious 40GW target for offshore wind in 2030 to 50GW does not make it any more achievable, especially as every European country will be attempting a similar acceleration.

Promised reforms may help speed the rollout. But one wonders if the Nimbys in parliament have appreciated the scale of infrastructure required on land to get offshore wind to its end users (which is the subject of yet another government strategy), as well as to integrate that (hopefully) with plans around oil and gas production, hydrogen, and carbon capture and storage in the North Sea.

This strategy was not bold and failed to connect the dots between energy affordability, security and the climate transition. What was there will require greater co-ordination to stand a chance of being delivered efficiently in the timescale envisaged, or of creating the jobs and economic benefits promised.

It all calls for another strategy – perhaps one less delayed and disappointing.

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