The UK has the energy sources and capability to wean itself of gas fairly quickly. but political ambition is needed, writes REA’s chief executive Dr Nina Skorupska
As we all face exorbitant energy bills, it is important that the UK makes the most of its domestic energy resources to create an energy future, which is independent, secure, and stable.
Historically the UK has benefitted from a large energy supply of its own in the North Sea. We have also, over the last decade, made strong investments in the next generation of energy – renewables – which have reduced reliance on fossil gas produced by Russia. Europe has also benefitted from a warmer winter, which has reduced demand for Russian gas even further. We have, in effect, squeaked through to the end of this winter with just enough gas stored up – for now.
What happens next will be far more difficult. In the longer term there are many options, with further renewable investment being the obvious cost-effective choice for both energy security and climate stability. But replacing Russian gas over the next two or three winters will present Britain and Europe with an exceptionally steep challenge.
Whereas reactionaries like Nigel Farage have leapt on the chance to attack climate policies and demand a new wave of fracking, they are leading public debate down a dead end. Fossil gas is likely to be with us for some time, even on an accelerated path to net zero, but Farage, Lord Frost et al ignore both the timeframe of this immediate crisis and the political realities on the ground.
Pursuing shale gas was government policy for much of the past decade. It was driven by then-Chancellor George Osborne and his flagship vision of a Northern Powerhouse, a precursor to ‘Levelling Up’. Yet communities reacted with outrage at the potential arrival of house-shaking tremors as fracking progressed. All shale gas developments were suspended by regulations and the Johnson administration placed a moratorium on new wells to secure votes in Tory shires and the ‘Red Wall’. It would take years to unpick this political knot and begin to deliver fossil gas at a time when we need to pursue a secure and decarbonised energy system. The shale industry’s own ‘best case scenario’ says that five per cent of our gas demand could be delivered by UK shale in five years. This optimistically assumes that it will not be held up again by strong – and warranted – public opposition. More to the point, Vladimir Putin has not offered us a luxurious five years to ramp up domestic supply.
Fortunately, there are solutions in the meantime that mean we, and our European allies, can cut reliance on Russian gas dramatically and begin to reduce the cost of our energy bills too. Crucially, this can be done at the same time as achieving our long-term goal of energy independence and climate stability, rather than away from it. Whereas much of the commentary has considered renewable energy as a long-term solution, there are several green policies that can achieve a lot in the short-term and these should be prioritised in the Prime Minister’s forthcoming Energy Security Strategy.
Firstly, we must ramp up green alternatives to fossil gas in home heating. Heat pumps are an obvious choice and deployment should be accelerated. Biomass boilers also have a strong role to play, particularly in rural areas and in buildings that need a lot energy to heat. Biomethane offers a direct alternative to the fossil-based gas, and simply lifting the cap on the ‘Green Gas Support Scheme’ would give an immediate boost.
Biomass and biomethane are a subset of bioenergy – our biggest source of renewable energy in the UK. Bioenergy is central to the circular economy, it is a sustainable resource produced from agriculture and forestry by-products in the UK or from nations like the USA, Canada and those of the EU – our liberal democratic allies. It can produce gas, solid or liquid fuels that are reliable and green, so they back up other renewables brilliantly. There is huge scope to increase capacity of bioenergy sustainably and the International Energy Agency says it’s a key tool in our response to Russia. We can and should use it to heat homes and industry.
The government should provide a support mechanism for industrial and commercial customers to enable them to switch their industrial heating process from fossil fuel and onto clean alternatives. This could take the form of a ‘Fuel Switching Tariff’, which would provide price certainty for every unit of clean heat generated, and as such create an attractive market that enables companies to invest in their heat systems and drive change. What’s more it could be started quickly as we would be able to re-use the rules and processes from a similar, now ended, mechanism called the non-domestic renewable heat incentive. As gas prices are higher than before, such government contracts could also be shorter than they would normally be, cutting the policy risk and concerns of costs to government and consumers.
Second, let’s accelerate the electricity sector’s transition towards wind, solar, waste-to-energy and bioenergy by holding an emergency round of ‘Contracts for Difference’, the scheme that has delivered huge success and cost reductions in offshore wind. An auction this autumn could help to bring forward projects that are ready to go quickly, including wind, solar, bioenergy, geothermal and other sources of energy independence. Coupled with new legislation to speed up grid connections, large scale renewable energy can transform the energy market in the UK, allowing us to move away from fossil fuels permanently.
Third, energy efficiency. Some of the fastest and greatest wins come by simply reducing demand for energy. Last week, the Chancellor cut VAT from all energy saving materials, something the REA has, for some time, been campaigning for – this is a big step in the right direction. Not everyone, however, has savings to pay for installation upfront. To ensure everyone can benefit and see a reduction in their bills, the government must financially back insulation and installation of domestic renewable technology, in the form of grants, interest free loans and incentives, for homeowners, renters, local authorities and housing associations alike.
Energy efficiency relies on millions of people to take action. A ‘Dig for Victory’-style campaign, showing people how to make the most of their smart meter and reducing your boiler’s flow rate can help us take on Putin and cut those eye-watering energy bills. For companies, who mostly don’t pay VAT, extending the super-deduction on capital investment beyond next year for energy saving materials would further encourage take up of efficiency measures.
In addition, there needs to be another attempt at a national energy efficiency scheme – there would be real economic benefits in doing so. A well-implemented efficiency programme can act as an economic stimulus that is spread across the whole of the UK, be immediately effective and limit the risks of stagflation brought by high energy prices. Multiple policy options exist – the key is to choose and move quickly.
The UK set a course to cut emissions a long time ago, but we knew it would have to be balanced with energy security. It is true that some renewables depend on the weather, but others do not. Together, they make a system that can deliver energy security and climate stability. Even in the face of Putin’s aggression, the green energy revolution doesn’t need to wait.
Dr Nina Skorupska is chief executive of the Association For Renewable Energy and Clean Technology (REA).