Her Majesty’s (HM) Government’s new Energy Security Strategy[↗] is broadly formed of three pillars. One is the bringing of more cheap renewables online faster, which will cut the cost of energy and use less expensive gas for power production. Second, there will be a big bet on nuclear energy, bringing it in from the cold after decades of slow decline. And, third, the UK will develop more assets in the North Sea to reduce British dependence on foreign imports as it continues to transition to Net Zero. Overall, it is simply an acceleration of the clean energy transition, which is now about national security as much as Net Zero because of Russia’s dominance in the European gas market. Decarbonisation now means ‘de-Putinisation’.
The expansion of zero carbon power in the form of nuclear and renewables will certainly enhance the security of the United Kingdom’s (UK) supply. While Vladimir Putin, President of Russia, can influence the price of oil and gas because Russia is the largest supplier of both to Europe, he cannot influence the price of nuclear power stations, or the cost of the electricity made from wind and solar – which are now the cheapest[↗] sources available to the UK. For most in politics and the energy industry, the popularity and favourable economics of the clean energy transition made it a ‘no brainer’, so it is little surprise that HM Government has accelerated it.
Although onshore wind joins solar power in being the cheapest power available to the UK, misconceptions about public support appear to have prevented the Government from lifting the de facto ban on it in England and Wales. HM Government polling[↗] found four-fifths of the public supporting onshore wind, and YouGov[↗] further found increasing support for it over the past few years. But the opportunity to return to a more balanced framework, where those that work with developers to build wind farms are given money directly off their bills, has unfortunately been missed.
Likewise, insulation is another surefire way to cut bills relatively fast. Rishi Sunak, Chancellor of the Exchequer, recently announced[↗] a VAT cut to 0% for home upgrades and wrote to the UK Infrastructure Bank to prioritise the built environment, which should unlock the private finance required – both big wins for those who have been campaigning for more insulation. Patience is required to build energy efficiency supply chains, not least because the UK does not[↗] have enough qualified installers.
But a trick has been missed in not expanding the successful Energy Company Obligation[↗] (ECO), which targets fuel poor households and helps them to insulate their homes and thereby waste less gas – cutting bills, emissions, and, most importantly, our reliance on imported energy. While ECO has not been expanded, the number of fuel poor households is growing every day. By the time of the next Budget in the Autumn, the average UK household may be looking at bills of £2,500-£3,000 per year[↗].
While clean energy will reduce Britain’s reliance on gas, the country will still need it beyond 2050. There is more than enough in the North Sea, even if it is a mature and oil-weighted basin. HM Government’s new leasing round for the small gas fields that remain and a task force to speed up project development will help to secure Europe’s supplies to some degree. Even though the North Sea oil and gas sector could never displace the amount Russia provides to Europe, or bring down the price of its gas, it is clear the threat caused by European dependence on Russian gas warrants an effort to consolidate the security of Britain’s gas supply, and energy supply more broadly.
Overall, the course of British energy security strategy remains firmly in the direction of a transition to a clean energy supply. The reduction of gas demand due to the Energy Security Strategy amounts to around 40%. If this is accurate, the UK might even become an energy exporter to Europe on windy days. With this in mind, HM Government should be wary of stranded assets in the North Sea, and mindful of the potential for more reductions in the shape of onshore wind and insulation. By drawing these elements together, the UK could strengthen its sovereignty in terms of energy security.
Jack Richardson is James Blyth Early Career Associate Fellow at the Council on Geostrategy. He is also Climate Programmes Manager at the Conservative Environment Network.
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