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Sam Hall: Will the government's plan power up Britain?


Sam Hall (CEN Director)

The ‘Powering up Britain’ plan is as much about strengthening energy security as cutting carbon emissions. Because of our energy insecurity, the state has had to subsidise half of people’s energy bills this winter, inflation has reached eye-watering rates, and business costs have spiralled. The consequences have been more borrowing, higher cost of living, and slower economic growth. It’s not hard to understand why energy security is such a priority for the government.


The only way to strengthen our energy security is to reduce our reliance on international fossil fuel markets. The world’s biggest oil and gas reserves are controlled by foreign powers, not all of whom are friendly to Britain, meaning they set the prices. To achieve energy sovereignty, we must build more clean energy, improve energy efficiency, and electrify as much of the economy as possible. This is also the most efficient route to net zero.


The new plan suggests ministers share this analysis. New clean energy is being accelerated, with the establishment of Great British Nuclear and fresh planning guidance for offshore wind and solar to speed up approvals. Funding to upgrade British ports will unlock floating offshore wind - a new renewable technology that harnesses wind energy in the deeper waters of the Celtic and North seas.


But we’re still not building as much new energy as we could. The cheapest forms of new power, wind and solar, are being held back by overly stringent planning rules, a lack of grid infrastructure, and high taxes. The government recently proposed allowing new onshore wind in England where communities support it, following a campaign by Simon Clarke to lift the de facto planning ban which has been in place since 2015. But greater certainty around how local consent will be measured is needed if developers are to invest money bringing forward new projects.


Renewables projects which do get planning consent are often unable to connect to the grid until the 2030s. There’s a huge queue of new energy projects waiting for grid connections. The queue could be prioritised, so projects with consents and financing can connect first. But to reduce delays and add capacity, Ofgem could go further in enabling firms to build more grid ahead of anticipated demand. And finally, the three-year full capital expensing policy announced by the Chancellor in the Budget will help developers manage rising supply chain costs, but might not lead to new energy investment unless it’s made permanent.


The plan gave a welcome funding boost to home energy efficiency too. A new ‘Great British Insulation Scheme’ will give out grants to 300,000 households to help them install insulation measures to cut their energy bills and gas imports. There is still plenty of work for the recently established Energy Efficiency Taskforce to do, however - especially around raising minimum efficiency standards for private renters and incentivising the full spectrum of homeowners to invest in insulation.


Perhaps the most significant measure in the plan was the Zero Emission Vehicle mandate. This will accelerate EV uptake as the government withdraws public subsidies, saving taxpayers’ money. It will expand the supply of affordable electric cars on the market by requiring car firms to sell a growing share of zero-emission vehicles each year. The shift to electric vehicles will be a boon for energy security, as battery-powered cars are four times as energy efficient as combustion engines and reduce oil imports in favour of homegrown electricity. But we urgently need to expand capacity in planning authorities and network operators, so charge points can be installed more quickly.


Electrifying heating is another key energy security policy. Heat pumps are three times more energy efficient than gas boilers, and so reduce our reliance on imported gas. The plan included an extension to the heat pump grant scheme, which will bring down the currently high upfront costs, and give the industry greater certainty to invest, innovate, and scale up. The proposals to move some green levies on to higher carbon gas from lower carbon electricity will reduce heat pump running costs and make them more affordable.


So far energy security and net zero goals are aligned, but one area where they are often presented as being in conflict is the continued extraction of oil and gas. It is true that, at a global level, we do have to leave some fossil fuels unburnt if we’re to limit global warming to 1.5 or even 2 degrees. It is also true that, in the UK, we will continue to use oil and gas beyond 2050 in every Climate Change Committee net zero scenario, albeit much less.


But the reality is that North Sea oil and gas extraction is in long-term decline, as most of the easily accessible reserves have been exploited, and is not globally competitive due to high production costs. Economics, rather than climate concerns, are driving down oil and gas production. We can’t be energy independent through oil and gas. Instead we have to urgently scale up homegrown, clean alternatives to ensure we are not short of energy, reducing reliance on volatile fossil fuel markets and creating new employment opportunities for oil and gas workers.


While the plan understandably focused on energy security, the government must not lose its focus on tackling climate change - in rhetorical or policy terms. The environment continues to be among voters’ top four concerns. Without a clear and prominent narrative about why safeguarding the environment is important to the Conservatives, backed up by an ambitious suite of policies, voters might question the party’s commitment in this crucial area come the next election. The party should embrace the opportunity of another ‘Green Day’ or two before polling day.


For the most part, Powering up Britain brought together the government’s complementary goals of net zero and energy security. Ministers now have a big job ahead with delivering this programme at pace and filling the remaining gaps.

 

If you are a CEN supporter, councillor, or parliamentarian and would like to write for the CEN blog, please email your idea to cameron@cen.uk.com.





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