Energy Security Strategy (ESS).

The Governments Energy Security Strategy (ESS) was issued last night under the headline of ‘major acceleration of homegrown power in Britain’s plan for greater energy independence’.

Agreed as part of COP26, The Glasgow Climate Pact focused minds upon addressing the challenges presented by climate change. Whilst there is still much to do in enacting the decisions and resolutions arising from COP26, subsequent international events have now led the discussion to the source, cost and security of our energy supply. Balancing the clear need to combat climate change, whilst making sure that the country and its population gets access to enough and cost-effective energy is now expressed within the Governments ES.

The key planks being:

• Boosting Britain’s energy security, in the face of rising global energy prices and volatility in international markets
• ‘Bold’ new commitments to ‘super charge’ clean energy and accelerate deployment.
• An objective to see 95% of Britain’s electricity set to be low carbon by 2030.
• Ambitious, quicker expansion of nuclear, wind, solar, hydrogens, oil and gas, including delivering the equivalent of one nuclear reactor a year, instead of one a decade.
• The creation of 40,000 more jobs in clean industries.

Alongside the Energy Strategy the Government has announced a new body to boost energy resilience, oversee the network, support new technology and build supply security.  The Future Systems Operator(FSO) will be launched once legislation is passed and timescales agreed with key parties.  It will work with energy suppliers and networks to balance UK electricity systems and ensure resilience and security of supply and strategic oversight of UK gas.

Nuclear

The key plank in the UK’s energy supply, nuclear power gets more support for further investment. This is already being stimulated by the announcement that the UK Government will buy a 20% stake (alongside EDF’s 20% stake) in the Sizewell C nuclear power plant. This follows the £215m investment in UK Small Modular Reactor programme, announced in 2020.

The ESS now advocates a significant acceleration of nuclear power, with a target of 24GW by 2050, representing 25% of our projected electricity demand. The deployment of Small Modular Reactors will form a key part of the deployment programme, with a new government body, Great British Nuclear to be immediately set up to bring forward new projects and a £120 million Future Nuclear Enabling Fund later this month.

Paul Burrell, Executive Director at Pegasus Group noted that ‘the ambition is clearly set high, but the acknowledgement that SMR in particular requires ‘technology readiness from industry’ shows the potential deployment difficulty. Clearly the consenting regime will require some finesse, this shall no doubt throw up the classic planning balance case, including the role of local communities and socio-economic benefits’.

Offshore Wind

A new target for up to 50GW of offshore wind is set, based on this providing enough power for every home in the UK. 5GW is proposed to be sourced from floating offshore wind in deeper seas. There is a direct link to hydrogen production from offshore wind, with the Government suggesting at least half of the country’s new 10GW target for low carbon hydrogen coming from the use of excess offshore wind power.

Picking up on planning reforms, Andy Cook, Executive Director at Pegasus Group said ‘the delivery of offshore wind through the planning system is forecast to be cut from 4 years to 1 year. This is a fundamental shift and if delivered, will provide greater confidence in the system by developers. This all aligns with the Prime Ministers previous pledge that offshore wind farms could power every home in the UK within a decade. However, with some onshore elements of projects such as East Anglia One North and East Anglia Two getting objection from Cabinet member Therese Coffey, showing that it is not all plain sailing ahead’.

Onshore Wind

This is understood to have been one of the most debated matters within the Cabinet, but the Government has determined to not support any significant changes to onshore wind planning policy. It intends to focus upon a consultation to develop partnerships, with a ‘limited’ number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills.

Chris Calvert, Executive Director at Pegasus Group said ‘this is very disappointing news, particularly as onshore wind has gathered more public support in recent times and is a proven technology within the UK. It feels like a missed opportunity, given the press around this issue, it is clear that a consensus around the Cabinet could not be met. However, the opportunity presented for supportive communities, albeit ‘limited’ in number will be keenly observed and if what appear to be a pipeline for pilot projects show success, this could change in the future. In the interim, it appears that the deployment of onshore wind in England will continue to be curtailed by the present content of  Footnote 54 of the NPPF[1]

[1] “Except for applications for the repowering of existing wind turbines, a proposed wind energy development involving one or more turbines should not be considered acceptable unless it is in an area identified as suitable for wind energy development in the development plan; and, following consultation, it can be demonstrated that the planning impacts identified by the affected local community have been fully addressed and the proposal has their backing”.

Solar

In the absence of positive onshore wind energy policy, solar schemes have shown themselves to be credible proposals through the planning and deployment phases. The ESS appears to recognise this.

Colin Virtue, Executive Director at Pegasus said ‘the Government has continued its support for solar schemes, showing a commitment to increase the UK’s current 14GW of solar capacity by 5 times by 2035. However, there is an indication of consultation ‘on the rules for solar projects, particularly on domestic and commercial rooftops that will need some clarity in the coming weeks’.

Oil and Gas

Fracking has not formed part of the ESS. However, a licensing round for new North Sea oil and gas projects is due to be launched in Autumn.

Dale Turner, Senior Director at Pegasus has observed that ‘whilst the objectives around reducing our reliance on these sources has not been met head on, the ESS acknowledges the balance between the transition to a cleaner energy supply against lower carbon footprints in UK gas production, when compared to foreign imported production’.

Job creation and energy costs

The ESS suggests that it will increase the number of ‘clean jobs’ in the UK, with 90,000 jobs in offshore wind, 10,000 jobs in solar and 12,000 jobs in the UK hydrogen industry. It predicts that these figures are nearly 40,000 new jobs, in comparison to previous projections and as a result of the ESS.

The Prime Minister has said that consumer bills will be lower this decade than they would otherwise be as a result of the ESS.

Richard Cook, Director at Pegasus has said ‘energy production within the UK has always provided employment, this particularly being the case with nuclear power. The effects of the ESS will take time to come to fruition, but any diversification of the energy sectors employment profile through new production streams can only be a good thing for the UK economy. The wider benefits to the economy, through predicted energy cost stabilisation and energy security, will ripple through businesses but only if the objectives of the ESS are realised’.  

Heat Pumps

More investment in these sources of energy is proposed, via a £30 million Heat Pump Investment Accelerator Competition later this year to make British Heat Pumps.

You can view the full policy paper on the GOV.uk website here. For more information about the contents of this article please contact us.