In the context of Russian barbarism in Ukraine, landmark policy proposals have become even more painful. In addition to targeting clean zero-carbon emissions and fighting overly high energy bills, the UK is also trying to reduce its exposure to Kremlin-controlled oil and gas supplies. With the stakes so high, various industries and political factions are pushing their own special interests in the hope of steering the government – and billions of pounds of taxpayer funding – in the “right” direction. The cabinet is divided, with the Treasury being skeptical about the funding needed for a huge expansion of the UK nuclear fleet, and sections are also emerging as to whether more wind turbines will be built on land. So what can be reserved when the long-awaited strategy is finally published?
Are we going nuclear?
Yes. Boris Johnson and Kwasi Kwarteng, Minister of Enterprise, Energy and Industrial Strategy (BEIS), said they intended to reverse the industry’s long-term decline. Nuclear capacity reached nearly 13 GW in the late 1990s – about 25% of electricity demand – but will be reduced to just 3.6 GW by 2024 as reactors retire. Johnson wants to return to this 25% watermark. The National Grid estimates that the maximum electricity demand in the UK in 2050 will be around 85 GW, up from 60 GW now, due to factors such as vehicle electrification and home heating. This implies the required nuclear capacity of about 21 GW, which is equivalent to six to seven nuclear power plants. The first step is the 3.2 GW Hinkley Point C, which is expected to be completed in 2027, unless it is delayed again. The lifespan of the Sizewell B is likely to be extended until 2050, adding another 1.2 GW back to the mix. The Sizewell C and Wylfa in Anglesey – both of which are already in the early stages of design – the next steps are obvious, adding almost 6GW. Small nuclear reactors (SMRs), known as mini-nukes, are being developed by both Rolls-Royce and GE Hitachi, theoretically adding about another 5 GW by 2035. To achieve the government’s goal, two or even three large factories could be needed. In 2011, the government identified five other options. Oldbury in Gloucestershire, Moorside (Sellafield) in Cumbria, Bradwell in Essex, Heysham in Lancashire and Hartlepool, County Durham. The government has already given the green light to a model of “regulated asset base” financing through the nuclear financing bill, transferring part of the risk of many billions of pounds of major projects to taxpayers. Now the Ministry of Finance must give its blessing. However, nuclear projects take a long time. If we want energy security in the short term, we need something faster.
The wind and the sun are fast, aren’t they?
Speaking of which, yes. Offshore wind farms take about four years to build and onshore winds are even faster and cheaper and cleaner. The good news is that offshore wind power already has the full support of the government to increase from 11 GW to 40 GW. Ministers could go further this week and reach the target of 50 GW. Land-based wind expansion has potential, but it is politically complex. Capacity is now approaching 15 GW and the wind industry wants the blessing of the government to reach 30 GW. The big question is how much of that would be in England, amid a split in the cabinet. High wind speeds and remote locations in Scotland already make it more attractive. It has 8.6 GW of land wind and could reach 26 GW if the proposed projects get the green light. England has just 2.9 GW and just another 0.2 GW in the pipeline. This is due to the moratorium of 2015, which was introduced when Ukip was an electoral threat and had turned its face against wind farms. The subsidy block was lifted in 2020, but strengthening British onshore wind farms would also require a reform of the design laws enacted at the time, which is tantamount to a de facto ban. That’s where politics comes in. Transport Secretary Grant Shapps described the wind farms as a “look” at the weekend and is among a group of MPs hoping to prevent a major boom in England, with Kwarteng and Michael Gove being pushed back. Solar is also in line for a significant expansion with Kwarteng wanting to increase the 14GW to 50GW. This, too, could be contrasted. A proposed 600 600 million new solar farm in the east of England – covering an area eight times the size of Hyde Park in central London – has been identified as a potential “scourge” in the countryside.
Will they do the fracking back?
Not immediately but it is no longer ruled out. In 2019 the government imposed a moratorium on fracking, which pumps water, chemicals and sand underground under high pressure to break shale rocks and release trapped oil and gas. Kwarteng is said to be dead against him, with Boris Johnson only marginally less determined, depending on political expediency. But amid growing outcry from climate-skeptical Tory lawmakers, the government has reopened the debate. Kwarteng commissioned a study by the British Geographical Survey on new fracking techniques suitable for use in the UK, which will examine the impact of the vibrations, saying on Tuesday: “In the light of Putin’s criminal invasion of Ukraine, it is absolutely right. to explore all possible domestic energy sources “. And the freight company Cuadrilla recently received another year before it has to cement its wells in Lancashire. Watch this place.
But do all systems go for oil and gas in the North Sea?
More or less. Jacob Rees-Mogg said this week that the government wants “every last drop” of North Sea oil. There will almost certainly be no unexpected tax on oil explorers, as Kwarteng said such a plan, proposed by Labor to pay rebates on household energy bills, “would ruin investment and add uncertainty to oil markets”. Most likely they will be encouraged to continue drilling and maximize production. Shell certainly seems to think so. He had abandoned plans to develop the Cambo oil field in the North Sea before overturning the decision amid high oil prices. Days later, the stadium’s license was extended for two years.
Why is no one talking about insulation and energy efficiency?
Good question. The other important aspect of increasing energy production is the reduction of energy demand. In his spring statement, the chancellor announced that homeowners who install energy-efficient materials, such as solar panels, heat pumps or insulation, would not pay VAT, but was accused of simply “scratching the surface”. Few people can afford to spend thousands of pounds on retrofitting their homes even without tax. The Green Homes Grant closed last year, so the government could announce an energy efficiency plan for the home to replace it. The thinktank Energy and Climate Intelligent Unit (ECIU) supports more ambitious goals of insulating and replacing gas boilers with electric heat pumps. Annual gas savings from insulation upgrades will reach 18 terawatt hours (TWh) by 2027 for 5 million homes, they said, matching the production of the proposed new gas fields. The ECIU estimates that 1.5 million heat pumps could be installed before 2027, saving 17 TWh of gas per year.
