Keeping the home fires burning - British Energy Security Strategy

On 7 April 2022, the UK Government published the British Energy Security Strategy, setting out how the UK can become increasingly self-sufficient in its energy generation while continuing to (and in some cases accelerating) transition to cleaner energy sources.

The strategy comes at a time of soaring domestic energy bills, and focuses on how the UK can end its dependence on energy imports. The bulk of the strategy, and associated funding, is firmly focused on increasing home-grown energy production.

The expectation is that by 2035 the electricity system will be decarbonised. Offshore wind and solar are expected to provide the majority of the UK’s energy needs by 2050, supported by a number of new nuclear reactors (including small modular reactors) and a fast-growing hydrogen sector. The strategy is not a dramatic departure from previous announcements (e.g. The Ten Point Plan for a Green Industrial Revolution; the Net Zero Strategy), instead it builds on them with a sharper focus on how to secure energy supplies longer term.

Lighting a fire under nuclear and low carbon hydrogen

The strategy confirms and increases the ambition on nuclear (the “reliable, low carbon electricity” generator) – £1.7bn of direct government funding to enable one nuclear project this Parliament, £210m to develop small modular reactors with Rolls Royce and a £120m Future Nuclear Enabling Fund, together with the establishment of a new Government body (Great British Nuclear). The aim is for a three-fold increase in civil nuclear by 2050 (up to 24GW).

Hydrogen is a slower burn, with no specific investment figures provided but a goal of up to 10GW of low carbon hydrogen production capacity by 2030 (with at least half from electrolytic hydrogen), annual allocation rounds for electrolytic hydrogen with price competitive allocation by 2025, and establishing a hydrogen certification scheme to distinguish between the different forms.

Bonfire of red tape

There is also a focus on streamlining processes and reducing regulatory burdens so that infrastructure can be delivered much faster.

• There is an ambition to more than halve the time it can take to develop and deploy offshore wind. Proposals include slashing the time taken for consent and streamlining environmental processes.
• On solar there will be a consultation on amending planning rules to favour development on non-protected land, and streamlining network charging rules.
• In addition, Government intends to halve the time taken to deliver onshore transmission infrastructure by the mid-2020s. In part, this will come from the delivery of a blueprint for the whole system, which will be recognised in National Policy Statements to increase certainty and speed up delivery. Ofgem will also be encouraged to expedite its approvals process.

Such ambitions are attractive, but invariably it is all about the detail – the measures ultimately put forward will need to be coherent and carefully considered; they are not without risk. But keeping environmental standards high while dramatically cutting timeframes, for example, is an enticing goal. Simplifying and streamlining processes such as planning could indeed help to deliver the targeted 50GW of offshore wind, including floating wind, by 2030 and 70GW of solar by 2035.

Not yet the end of the road for oil and gas

While the headline is about transitioning away from oil and gas, the short term goal is to boost domestic energy production as quickly as possible to insulate consumers from international energy price shocks and, crucially, from reliance on Russia. This means more, not less, investment in the North Sea, with a particular focus on delivering more domestic gas. There will be another licensing round this autumn, and the Government will seek to provide support to facilitate swift development of projects. The door is left open for shale gas, but no firm commitments are made.

Forward looking 

This is a high level document, but it nevertheless provides some clear milestones on the pathway to decarbonisation. While it builds on previous announcements, there is a sense of renewed urgency and focus. Previous messages are reinforced and strengthened and, in particular, the Government’s commitment to nuclear (as the ultimate backstop) is brought into sharp relief. The push to streamline regulation, if delivered, is particularly welcome.

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