The government has unveiled its “British Energy Security Strategy”, but Kwasi Kwarteng has admitted it will not deescalate energy bills anytime soon.
The government will present its plans to increase nuclear, hydrogen, and offshore winds, as well returning to the annual North Sea licensing rounds.
Sky News was informed by the business and energy secretary that plans to reduce soaring energy costs could take up to five more years.
“I mean in terms of people’s energy bills, people’s energy bills this year, we have announced a number of measures, a £9.1billion package, £150 off council tax for people in bands A to D, £200 to pay those bills,” he explained, adding: And of course you are right to say that the strategy is more of a medium term, three, four, five year answer.
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“But that doesn’t mean we can’t address this. He said that he believes it is crucial that we have an energy strategy and policy that allows us to have greater security and independence over the coming years.
This plan comes following soaring global energy prices since mid-2021, accelerated by Russia’s invasion of Ukraine. The government says this new strategy will help “wean” Britain off pricey fossil fuels, which are subject to volatile gas prices set by international markets.
The strategy will result in a significant acceleration in nuclear power in Britain. It is envisioned that the country could have up to 24GW of nuclear power by 2050. This would account for approximately 25% of the projected UK electricity demand. According to the government, Small Modular reactors will be a key component of the nuclear project pipeline, provided that industry is ready to accept technology.
The strategy will establish a national oversight via a new body, “Great British Nuclear”, to ensure the production of 8 new nuclear reactors by 2030.
The government will henceforth be consulting developing partnerships with a limited number of “supportive” communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills. Because of its requirement for wind turbine construction in scenic rural locations, onshore wind is often seen as unfavorable.
A Heat Pump Investment Accelerator Competition will be run this year, worth up to £30 million to make British heat pumps, which reduce gas demand.
They also say they will aim to increase the UK’s current 14GW of solar capacity which could grow up to 5 times by 2035.
The strategy also pledges to double the UK’s ambition of producing up to 10GW of low carbon hydrogen by 2030, with at least half coming from green hydrogen and utilising excess offshore wind power to bring down costs. Hydrogen can be used as a cleaner source of power, transport, and heat.
Energy and climate change minister Greg Hands said ahead of today’s announcement: “Boosting our renewable energy supply is the only way for us to take control of energy prices. We are already a leader in offshore wind but we want to go faster and more efficiently so that clean, affordable energy becomes the norm.
“Although we don’t rely on Russian energy, accelerating our transition to renewable energy is the best thing we can do to protect the British people and to drive economic growth.”
Robert Colvile, director of centre-right think tank the Centre for Policy Studies, said: “As the view for household energy bills gets bleaker by the day, the government is right to plan ahead to bolster domestic supply and boost UK energy security. The role of hydrogen and nuclear in this is key, as we have argued, and the government’s recognition of this is extremely welcome.
“Despite this, it is disappointing to see that the government’s ambitions have not carried over to other alternative energy sources, such as onshore wind and fracking. Nor have they taken the opportunity to promote demand-side energy efficiency, including via insulation – which in turn will help reduce the most significant costs and support the push for Net Zero. Highly alarming is the decision to nationalize core National Grid responsibilities.
“While this strategy will expand power supply, it will take several years for its full effects to be felt. In the meantime, consumers and businesses should brace themselves for painfully high energy costs to continue.”
Rain Newton-Smith, CBI Chief Economist, said: “This Strategy sets an ambitious bar for a more resilient, low carbon energy system for the future. Bold words need to be matched by bold government actions. The proof will be in the Strategy’s delivery, in partnership between business and Government. Business believes that greater energy independence must be accompanied by a higher growth rate and a net-zero economy.
“Increasing our domestic generating capacity is an essential part of dealing with the current energy crisis. Big bets on the future of nuclear will ensure that consumers and businesses have reliable and clean power. This ambition should be replicated in other renewable technologies such as onshore wind. The key to making a difference is to be committed to planning reforms as well as rapid approvals.
“While it’s welcome this Strategy addresses some long-standing challenges, companies are continuing to really struggle with increased wholesale energy costs right now. The government’s next step should be to provide immediate cashflow support for firms through the Recovery Loan Scheme – and move to cut bills for Energy Intensive Industries to maintain competitiveness.
“Kickstarting an ambitious national programme for household energy efficiency upgrades should follow this Strategy too – making people’s bills more affordable and cutting carbon across the country.”
Luke Murphy, associate director for energy and climate at progressive think tank the IPPR said: “This energy strategy appears to be a recipe for failure. The government’s choices will make consumers pay more, leave the UK less secure and expose us to greater climate change risk than if we had made different choices.
“This plan should have been a route map for the UK to make significant progress towards a more affordable, secure, and clean energy future, but from what we’ve seen so far, it falls short on every test.
“Onshore wind to boost clean energy supply and energy efficiency measures to reduce energy demand should have been at the heart of this strategy, but energy efficiency hasn’t been mentioned and the proposals for onshore wind appear pitiful.
“The government has instead placed a bet big on nuclear, which has a role, but remains too expensive and will take years to make a difference. It is difficult to believe that the government decided to increase exploration of oil and natural gas and reassess Fracking. Phasing out fossil fuels is not only essential for tackling the climate crisis and protecting future generations, but it is also in the interests of our energy and economic security.”
