Campaigners have slammed the UK’s long-awaited energy independence plan, warning Ministers have missed a major opportunity to boost energy security and climate action – but was it really that bad?
After weeks of delay and much political wrangling, the UK’s Energy Security Strategy was finally released yesterday, sparking a decidedly mixed response from across the green economy.
The government claims the long-overdue plan will deliver a “major acceleration of homegrown power” that can protect British energy consumers from both the threats to energy security posed by the Kremlin and the soaring international oil and gas prices driving the current cost-of-living crisis. And some of the measures set out in the plan were duly welcomed by the green economy, with developers and investors broadly praising the increased targets for offshore wind, nuclear, and hydrogen projects.
But praise for the roadmap from the wider green community was thin on the ground, with campaigners, politicians, and green business leaders branding the Strategy a “missed opportunity” that does next to nothing to boost energy security and tackling soaring energy bills in the near term thanks to its failure to offer significant new support to the measures that could be deployed fastest – namely solar, onshore wind, and energy efficiency.
Offshore wind, nuclear, and oil and gas may all have received supportive new policies, but observers have warned these sectors will take years to bring new projects online and will prove more expensive than the onshore renewables and efficiency projects that could help cut gas imports over the next two years. Others have pointed out that expanding oil and gas production will have no effect on prices, while locking in fossil fuel infrastructure that could harm UK climate goals if it is not accompanied with major investment in expensive carbon capture and storage (CCS) capabilities.
Ed Matthew, campaigns director at environmental think tank E3G, did not mince words in his assessment of the new Strategy, warning it would do nothing to bring down bills or reduce the UK’s imports of Russian gas. “The person who will be happiest with it is Vladimir Putin,” he said. Helen Clarkson, CEO of the Climate Group, offered a similar analysis, arguing the plan was “all about jam tomorrow when we need deep emissions cuts today”. Her concerns were echoed by Green Party MP Caroline Lucas, who slammed the plan as “economically and environmentally illiterate”.
Green business groups were only slightly more muted in their criticism of the plan. Eliot Whittington from the Cambridge Institute for Sustainability Leadership (CISL) dubbed the plan as a “go slow strategy in a fast-moving world”. And Aldersgate Group’s Ana Musat welcomed the support for offshore wind, but argued that the “ambitions on low-cost onshore wind could be much bolder and it is disappointing to see so little focus on new regulatory measures and incentives to drive more investment in energy efficiency”. Even some those on the political right gave key parts of the plan short shrift, with the chief executive of the Bright Blue think tank Ryan Shorthouse noting that “households and businesses still face grim months ahead” in the wake of the underpowered plan.
So where did it all go wrong for the Energy Security Strategy? After all, there had been high hopes the interwoven Ukraine and energy costs crises would encourage Ministers to embark on a genuinely transformative plan that would slash oil and gas imports and rapidly accelerate the renewables development and energy efficiency upgrades that can drive down energy bills. A number of studies have indicated there is huge public appetite for clean energy and energy efficiency measures that simultanesouly reduce the UK’s reliance on Russian fossil fuels, curb bills, and cut carbon emissions.
Moreover, various briefings to the media over the past month suggested these bold measures had cheerleaders in all the right places within government. Just a few weeks ago, the Business Secretary briefed the i newspaper the energy independence plan would relax planning rules for onshore wind introduced by David Cameron’s government that have brought the sector to a standstill. And separate reports indicated that the Prime Minister was “passionate” about the potential for onshore wind. Ministers did little to dampen expectations the plan would boost clean energy development of all types and would send a clear signal to both the Kremlin and the UK’s allies that the government is serious about slashing imports.
But it appears that the Prime Minister and Business Secretary enthusiasm for these projects was in the end trumped by pressure from Cabinet Ministers and backbenchers opposed to onshore clean energy development, and a Chancellor unwilling to deviate from budgets established last autumn and unlock additional emergency funds for energy efficiency measures. Or at least, that is the verdict from opposition politicians and climate and energy experts in the wake of the strategy’s publication.
Shadow Secretary of State for Climate Change and Net Zero, Ed Miliband, noted that Boris Johnson had “completely caved to his own backbenchers” with his failure introduce more supportive measures for wind and solar projects. And Green MP Caroline Lucas said it was “utterly shameful” that the Prime Minister had “bow[ed] to Tory backbenchers by refusing the end of the moratorium on onshore wind, which is almost six times cheaper than guess”.
A leaked draft of the strategy, shared with the i, reveals how proposals designed to boost clean energy development and tackle fuel poverty had indeed been in contention. The document, dated March 2022 and marked “official sensitive”, sets out a number of proposals that would have given a major boost to the UK’s energy efficiency, onshore wind and solar industries.
The document reveals that BEIS officials put forward plans for primary legislation to create “a more facilitative planning policy for onshore wind” that could grow its capacity to 30GW by 2030 and 45GW by 2035. It also notes that officials initially wanted the plan to establish specific solar capacity goals, with the document stating the UK could achieve as much as 50GW of capacity by 2030 and 70GW by 2035. Significantly, it also proposed increasing the recently announced energy ‘rebate’ scheme for households from £200 to “£500 or more” and exempting “at least some fuel poor households” from having to repay what is effectively a government loan.
But none of these proposals made it into the final document. While the Energy Security Strategy does outline a plan for government to work in partnership with “a limited number of supportive communities” that might agree to host wind farms to offer them lower energy bills, the effective moratorium on onshore wind development in England remains in place. And while the final version does note that the UK’s solar sector has the potential to grow five-fold and outlines government’s intention to consult on easing planning rules for projects, specific capacity target for the sector are nowhere to be seen. Meanwhile, the Strategy does not propose any additional funding for fuel poor households facing crippling energy bills, either through direct financial support or energy efficiency improvement programmes, seemingly confirming reports from earlier this week that Chancellor Rishi Sunak had moved to block plans to expand the ECO energy efficiency programme over cost concerns.
ECIU deputy director Sepi Golzari-Munro noted the decision to scrap the mooted plan to boost funding for energy efficiency programmes could cause trouble for the government later down the line. “Rumours that Chancellor Rishi Sunak blocked moves to boost the successful ECO energy efficiency scheme that’s saved low income households £1.2bn on their energy bills this year, could raise tough questions as the gas price crisis continues to bite,” she said. “It’s all the more striking, since insulation is the public’s top priority in the current gas crisis with 84 per cent backing it as the best way to cut our reliance on gas and cut bills. With any extra UK gas production having no effect on prices, it begs the question whether having gas that households can’t afford to use counts as ‘energy security’ to them.”
The bolder proposals that could have helped curb fossil fuel imports and cut bills as quickly as possible appear to have fallen foul of a combination of fiscal hawkism and Conservative nimbyism, after Sunak blocked any new spending commitments and Transport Secretary Grant Shapps, Brexit Minister Jacob Rees-Mogg, and Chief Whip Chris Heaton-Harris combined to oppose new onshore wind development.
However, there is a counter narrative available. The government maintains that the new plans could result in 95 per cent of UK power coming from domestic low carbon sources by 2030, which would represent a significant improvement on previous plans. The proposals to fast track planning and permitting for offshore wind farms could remove one of the biggest challenges facing the industry, while the nuclear sector has some long term clarity even if questions about the cost of new reactors will continue. Green hydrogen is clearly in favour and could help tackle some of the energy storage and industrial decarbonisation challenges facing the UK as it shifts towards a more renewables-reliant grid – a fact underlined by today’s announcement of a major new £340m support package for the nascent hydrogen industry.
In addition, as Business Secretary Kwasi Kwarteng was at pains to point out yesterday, the door is not fully closed to onshore renewables. The consultation on relaxing planning rules for solar projects and various measures to boost the market for rooftop solar should provide a further boost to a sector that is already growing fast in response to rising energy costs. Onshore wind in England may continue to face significant planning barriers, but the plans for new incentives for communities that do support projects and the imminent clean power contract auction for onshore projects could yet help deliver a wave of new developments in Scotland, Wales, and Northern Ireland.
“The Prime Minister’s ambitious new strategy puts the rocket boosters under the UK’s transition to renewable energy and will cut consumer bills,” said RenewableUK chief executive Dan McGrail. “The new targets mean that our world-leading offshore wind industry will do the heavy lifting in getting Britain permanently off the hook of gas power by boosting our nation’s home-grown energy supply. Reforms to speed up the planning system and how quickly we connect new offshore wind are essential to meet these new ambitions. We need to make use of every tool in the box to boost our energy independence, so it’s right that government is looking again at planning rules so that onshore wind can proceed in parts of England where there is support, as it’s the cheapest source of new power and the quickest to build.”
Even the Strategy’s glaring omission of new measures to boost building energy efficiency and curb demand for oil from transport may not be as bad as they first appear. Alongside the Energy Security Strategy the government yesterday launched a consultation on its Zero Emission Vehicle mandate, which should help further accelerate the already booming electric vehicle (EV) market. Meanwhile, the combination of soaring energy costs, the removal of VAT on domestic clean technologies, and the new heat pump grant scheme should help drive demand for energy efficiency upgrades, even if the new Strategy offered nothing new on this front.
There is also a feeling across Westminster that the Treasury may be keeping its powder dry on domestic energy bills and could come forward with more support in the autumn if energy bills continue to rise as some fear. Similarly, politicians who are currently reluctant to advise the public to take steps to save energy would surely be forced to pull that lever if the Kremlin did move to restrict exports further.
However, for all the progress the Strategy represents, the sense of frustration at its failure to do more to curb fossil fuel imports this year and next in the face of the worst threat to the UK’s energy security in nearly 50 years remains palpable.
Critiques of the plan extends beyond its failure to tackle energy efficiency and set out measures that could ramp up supplies of solar and onshore wind. Critics also voiced widespread concern about the focus on the most capital intensive power projects that take years – and in some cases decades – to come online. The government’s new plan to build eight new nuclear power plants is hugely ambitious and could play a starring role in the drive a zero-carbon grid. But many infrastructure and energy experts noted these projects will take many years to realise and as such will do nothing to relieve current energy market woes. Similarly, they have warned North Sea oil and gas exploration projects set to be consented in the fresh licensing round announced in the strategy will be far more expensive to build than renewables projects, and will also take several decades to come online. As such, critics have argued that Ministers penchant for megaprojects over less flashy energy efficiency measures will hurt consumers and businesses around the country by leaving them exposed to volatile energy markets for many more years.
“The government should be credited with its scale of ambition to expand offshore wind and solar generation,” said National Infrastrucutre Commission chair Sir John Armitt. “The challenge is to take these stretching targets and turn them into delivery of cheaper electricity into people’s homes as quickly as possible. The steps on onshore wind are unlikely to unlock significant new capacity rapidly, while government’s aim to build more major nuclear plants will also take many years to realise.” E3G’s Ed Mattthew’s assessment was more blunt. “With no new support to save energy and by holding back on solar power and on-shore wind, this strategy will do nothing to help the UK get off Russian gas this year,” he said. “Instead, the government has prioritised policies that will keep us dependent on high cost fossil fuels and nuclear power. This isn’t an energy security strategy and will do nothing to bring down energy bills.”
Writing on Twitter, former Labour government advisor Michael Jacobs said the Strategy was “almost a textbook case of short-term intra-party political interests, lobbying and ideology outweighing the stated policy objectives of the government”, adding the final version of the plan “almost literally reverses the rational merit order, emphasising new North Sea exploration and nuclear, barely supporting new onshore wind and doing nothing more for energy saving”.
As Jacob’s argues the Energy Security Strategy’s objectives have been massively undermined by short term polical concerns, which have in turn led to mismanaged expectations. While the final Strategy claims to be focused on securing the UK’s energy security, it has in reality morphed into a long term energy generation strategy of the type that should have already been produced alongside last year’s Net Zero Strategy. As the reaction to the Strategy attests, it should help mobilise investment in low carbon energy infrastructure, but it is unlikely to reduce UK households and businesses’ vulnerability to expensive international fossil fuel markets that are being manipulated by Russia and time soon. With much of the document dedicated to summing up previous energy policies and charting the UK’s progress against the decarbonisation aims set out in 2020 by the Prime Minister’s 10 Point Plan for a Green Revolution, it reads less as concerted, war-time effort to shore up the UK’s energy independence in the face of a serious threat to energy supplies.
It could be argued the measures set out in the plan are broadly positive and provide yet more proof that the UK’s economy is headed decisively towards its net zero goals – it is notable that while the calls to curtail onshore wind development won out, the wider calls from some MPs to ditch the net zero agenda were decisively rejected. The hope remains that at some point in the future the Treasury will be decisively convinced of the need to offer more fulsome support to the net zero transition. But against a backdrop of continuing atrocities in Ukraine committed by a Russian war machine that is directly funded by fossil fuel exports, not to mention the worst cost of living crunch in recent history, it is no surprise that the Strategy is broadly seen to have fallen so badly short of expectations.