Is the UK’s recently announced energy security strategy a serious plan for the future? Or does it fail to deliver on essential detail?
Last year saw the biggest increase in global electricity usage since 2010 when the world began its recovery from the 2008 financial crisis. In 2021, according to the International Energy Agency’s annual electricity report, global demand for electricity surged by more than 6%, with around half the unprecedented 1500 TWh increase in demand coming from China.
While renewables also grew by 6%, most of the demand was met by coal-fired power stations, resulting in a 7% increase in CO2 emissions caused by electricity generation. The global situation has been exacerbated by Russia’s war with Ukraine and the consequent threat to European supplies of oil and gas from Russian fields.
400% increase in wholesale prices
As a result, prices have risen dramatically. The IEA calculates that the cost of wholesale electricity in the final quarter of 2021 was four times higher than the average for 2015-2020.
It’s against this backdrop that Governments around the world have been setting out their energy strategies. As hosts of the COP26 conference on climate change in Glasgow in 2021, the UK Government’s strategy was the subject of much anticipation and speculation.
UK strategy announced
When the strategy was finally unveiled earlier this month, the emphasis was on energy security or, as the strategy document called it: “Secure, clean and affordable British energy for the long term.”
The key points include a commitment to build up to eight new nuclear reactors, taking nuclear from about 15% of the UK energy mix now to around 25% by 2050. However, the strategy also sees an extension of the exploitation of North Sea oil and gas reserves so that the country’s continuing demand for fossil fuels can be less reliant on foreign suppliers.
Wind concentrated offshore
A much-trailed commitment to open up onshore wind farms has been quietly dropped from the strategy, with greater emphasis given to the development of offshore wind resources.
Solar power is also due to be expanded, from 14GW now to a proposed 70GW by 2035. Given the relative land mass necessary, it is unclear if this is a practical proposition. Tidal and geothermal sources also get a passing mention. Hydrogen, however, is flagged as a major part of the future energy mix for the UK – despite there being very little capacity or capability currently in existence that could be used as a foundation for expansion. While hydrogen is a very fashionable topic right now, its inclusion in the strategy may turn out to be something of a red herring unless serious consideration is given to its method of use, transport and storage.
The political expediency of the strategy document – written as much to appease different factions within UK politics as to appear to set out a coherent plan for the future – is reflected in the space it gives to short-term schemes designed to alleviate high rises in consumer energy bills this year. This has political implications for the popularity of the Government but has little to do with establishing a long-term energy strategy.
Lofty ambitions but short on detail
Overall, the UK energy strategy could be described as full of lofty ambitions but lacking in clarity of thinking. There is a need to make practical, costed steps for turning those ambitions into reality. There is no mention, for example, of the role of interconnectors or the changes to the gas distribution infrastructure that, say, a switch to hydrogen for domestic heating would require.
While the strategy document is a start, its lack of clarity and detail raises more questions than it answers for generators, utilities and the wider public. In its current format the policy is lacking in significant areas; immediate relief through schemes for improving domestic insulation, Grid-scale storage, Network Reinforcement / necessary efficiencies in the grid connection process plus details of the necessary major long term fiscal outlay that – we would hope – has been adequately vetted against the Green Book, the UK Treasury’s guidance for appraising public policies, programs and projects. Only time will tell if this is the case, but in its current form, the strategy is flawed by its lack of attention to important detail.
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