A Guide to the UK’s Energy Security Strategy | Energy
What is the energy security strategy?
Soaring energy prices are helping to create a cost of living crisis, with the average family’s energy bill rising by 54%. The energy price cap has been raised to £1,971 and a further rise is expected later this year, which would take the average household bill to around £2,300. The government responded by offering a one-off £200 bill rebate from October, to be repaid over five years.
The UK is not alone: Energy prices are rising around the world as industries hit by Covid-19 shutdowns return to business, and energy supplies are yet to rise after plunging there two years ago during the first closures. The war in Ukraine compounds the problem: Vladimir Putin has used his dominance over EU energy supplies (Russia supplies 40% of Europe’s gas and 60% of Germany’s) as a weapon of war , and turned off the gas taps a quarter before the invasion.
Putin could further tighten supplies, and in any case, the EU wants to move away from Russian fossil fuels to stem the flow of money to the Kremlin war machine – Europe has paid more than 15 billion euros (£12.6 billion) for Russian gas, oil and coal since the start of the invasion.
The UK is less dependent on Russian fuel, which accounts for just 3% of UK gas supply and around 8% of oil, but UK consumers will be affected anyway as the price of gas is set by international markets which are hard hit by the war.
Now the government is releasing a strategy to secure the UK’s energy supply and try to mitigate soaring costs for consumers and industry.
What will be inside?
Renewables will play an important role, with the government planning to rapidly increase the offshore wind generation target and relax planning rules that have prevented the construction of onshore wind farms in England for most of the past decade.
Nuclear power will get a boost as the government seeks to help investors expand the UK’s reactor fleet. Keeping the UK’s existing nuclear power stations open for as long as possible will help ensure stability during the current crisis and beyond, but any new reactor will likely take more than a decade to start producing electricity.
Fossil fuels will also be at the center of the strategy, with the government seeking to boost UK gas and oil supplies, pumping more from the North Sea and making overtures to major Middle Eastern suppliers such as Saudi Arabia. New licenses for the North Sea, already in progress, will be brought forward.
What about fracking?
The government is leaving the door open for fracking, saying it could be allowed if health and safety conditions are met, but few in Whitehall see a real future for fracking in the UK. Large-scale fracking would require the industrialization of swathes of the UK landscape, would face huge local opposition, be expensive and take years to produce gas. It is not a solution to the current crisis and the carbon dioxide emissions it would generate would make it unsuitable for any future crisis.
Can we go back to coal?
Coal, the dirtiest form of electricity generation, is due to be phased out in the UK by 2024. But the government is said to have made informal contact with the UK’s other coal operators – EDF, Uniper and Drax, which has converted its boilers to biomass. but could eventually revert to coal – in an emergency.
Whitehall sources say it is only a matter of reasonably keeping options open should the crisis worsen, rather than ushering in a coal renaissance.
What will not be in the strategy?
A one-off tax on fossil fuel companies. Such a tax would have serious support – the International Energy Agency, considered the benchmark for advice on energy policy and little known for its radicalism, has advocated an exceptional tax in the EU, the proceeds of which would be used to reduce the energy bills of vulnerable people. people. Labor and the Liberal Democrats have also called for one in the UK.
Unfreezing the indexation of fuel taxes would raise billions that could be recycled to the poorest. Petrol taxes have remained flat since 2010, resulting in a loss to the Treasury of £11billion in 2019, and fuel-guzzling SUVs now account for around half of new cars purchased.
Free public transport would be a radical move to get people out of cars overnight and reduce demand for petrol and diesel while providing clearer skies, less air pollution and safer roads for walking and cycling.
And a national push to insulate every home to decent standards and install heat pumps instead of gas boilers would cut UK energy bills and end the need to import fossil fuels from this year if pursued quickly.
But these measures have been ruled out by the Treasury and other departments.
What happens to fossil fuel companies?
Party time. They are enjoying a windfall, with the BP chief boasting that his company was a ‘slot machine’ and his finance chief that he has ‘more money than we know what to do with’. Dangerously for the Earth’s climate, they use it to cement their lobbying power, telling governments they should invest in expanding oil, gas and even coal.
But a growing number of political leaders see the war in Ukraine as a sign that clean, locally-produced renewable energy can boost national security.
What will all of this do to net zero?
The government is expected to reaffirm its commitment to achieving net zero greenhouse gas emissions by 2050, despite agitation from a small number of right-wing Tory backbenchers and Nigel Farage. Boris Johnson is said to be a personal champion of green issues within the cabinet, and Michael Gove, the leveling secretary, has spoken out forcefully in favor of net zero this week.
Are energy prices the only factor behind the cost of living crisis?
No, the prices of food, clothing and other goods are also rising. Inflation is affecting many countries as economies recover from the Covid-19 recession, and the war in Ukraine has added to pressures, especially on food, as Ukraine and Russia are major exporters of grain and oil. But another factor unique to the UK driving up prices is Brexit, as imports and exports now face additional costs, red tape, staff shortages and other hurdles. But don’t expect this government to admit it.