These are unsettling times. As scientists have issued ringing warnings about the dangers we face from continued fossil fuel burning, an energy crisis has been triggered by the Russian invasion of Ukraine. This unprecedented double threat clearly requires an urgent response, which the government supplied last week in the form of its energy security strategy. And it includes some eye-catching headlines, particularly on the expansion of nuclear power.
But does it deliver what it says on the tin?
The answer is straightforward. It fails. At the heart of most definitions of energy security is reliability of supplies for households and businesses. This is usually complemented by a focus on affordability. It is no good if energy is available, but the price is too high for businesses to function or households to keep warm.
The new strategy does very little to deal with the immediate impacts of high fossil fuel prices. While the government has announced some help for households via loans and a council tax reduction, this is simply not enough. The energy price cap has already risen to almost £2,000 a year and a further rise is due in the autumn. This comes on top of a wider cost of living crisis and high levels of inflation.
While more money to help people pay their bills is needed, this must be accompanied by action to prevent these acute impacts in future. This means making homes more efficient and switching away from fossil fuels for heating. It is nearly a decade since effective policies for home energy efficiency were cancelled and replaced with new approaches, such as the green deal, which have failed spectacularly. As a result, the steady improvements in efficiency and financial benefits to households have virtually stopped. A new programme of home upgrades is urgently needed. This would not only reduce our dependence on gas, but would also cut bills and carbon emissions.
According to many headlines, nuclear power is the “centrepiece” of the strategy. The government’s plans are ambitious, but delivery will be difficult. New nuclear plants will not have an impact for many years. The Treasury’s fingerprints are visible in the careful caveats in the strategy, including an insistence that new projects are “subject to a value for money and relevant approvals”. This reflects the long history of rising costs within the nuclear sector and the financial risks that consumers or taxpayers will be exposed to.
British nuclear power programmes have been the subject of many false dawns. In 1979, energy minister David Howell announced a programme of 10 nuclear reactors over the next decade. Only one reactor was built, at Sizewell in Suffolk. In 2010, the coalition government agreed to another eight-reactor programme. That new programme has also produced only one plant: Hinkley C in Somerset, which is due to start operating in 2026. While nuclear can reduce emissions and improve some aspects of energy security, the new plans will only be realised if the industry can bring down costs.
The real heart of the strategy is increased ambition for offshore wind, which is due to expand at least fourfold by 2030. This is a genuine British success story from which politicians should learn lessons. Initially very expensive, it has been supported by a series of policies by successive governments – and that has brought costs down dramatically. Pushing further with an increased target makes a lot of sense. But it will require more investment in electricity network infrastructure, not just the wind turbines themselves.
The government’s willingness to learn from success has clear limits, though. When the strategy turns its attention to onshore wind and solar, logic fails. The costs of both technologies have also fallen dramatically in recent years. They get some warm words, including aspiration that solar capacity will expand by five times by 2035. There are also innovative plans for a few local communities to share the benefits of new onshore wind farms. But a target to double capacity by 2030 was taken out at the 11th hour and very restrictive planning rules for onshore wind remain.
Realising these increased ambitions for renewable electricity will require further market reforms. At the moment, cheap renewable power does not translate into low bills for consumers. This is because gas plants often set the wholesale price and their costs are very high. Reforms are needed so that businesses and households can get access to the economic benefits of cheaper renewables. Reforms are also needed to ensure that there is enough flexibility in the system to deal with higher and higher shares of generation that depends on the wind and sun.
Finally, what of the role of fossil fuels, which are at the root of the crisis? Plans to produce more in the UK are understandable, but are not the long-term solution to climate change or energy security. They will have very little impact on prices, but could help to squeeze out some Russian imports. The promise of a new independent study of fracking is a distraction, however. It is clear that fracking in the UK is nowhere near as easy to implement as it has been in the United States. Its contribution to gas needs will be modest at best. Industry claims that fracking could produce a large share of the UK’s gas demand are not credible, based on the evidence we have so far.
In short, the government has pulled its punches and avoided measures that would have a more immediate impact on energy security – mainly by reducing the amount of energy we need to use. Instead, it has produced a mixed bag of energy supply proposals. While some are credible, a large nuclear power programme will require huge amounts of political and financial capital. History suggests that this will be very difficult to deliver.
