The Energy Security Strategy - No Quick FixBy Carver Oakley
The UK government has revived the concept of energy security, timely given events in Ukraine and the squeeze on global energy prices, with their recently released Energy Security Strategy. 2022 has revived scrutiny of global energy security with many countries suffering from a dramatic rise in fuel prices. A renewed focus on this critical element to global supply chains and the world economy was long overdue, yet it is regrettable that it took the tragic fighting in Ukraine to restore its prominence.
Energy prices, which were already high due to the global economy’s emergence from the COVID-19 pandemic, have skyrocketed following speculation and now a reduction in Russian supply of gas and oil. Far from remaining a geopolitical issue for pundits, the rise in prices is affecting consumers who are already struggling with an increase in the cost of living. In response, the UK government has released its own Energy Security Strategy. The Strategy outlines how the UK will become energy self-sufficient, what new infrastructure is required, and how quickly the UK will reach net-zero carbon emissions. The Energy Security Strategy certainly aims to make the UK’s energy mix more independent, however many argue that it will not come into effect quick enough nor help alleviate the cost-of-living crisis. Nuclear energy is the government’s big bet on how the UK will secure domestic supply. Yet, the focus on nuclear power plants has left critics wondering why the government is not doing more to support wind farms. Wind Energy can be harnessed quicker and cheaper than nuclear and is therefore more responsive to the current energy crisis. The implications of this policy are generally positive as it does decrease the UK’s reliance on foreign fossil fuels. However, as the strategy is not expected to impact consumer bills for at least five years, it will fail to ease the current cost of living squeeze.
The UK has been one of the most significantly affected by energy price rises, meaning a move away from imported fossil fuels is not just a geostrategic necessity but one of social crisis. The UK is the second largest net importer of energy in Europe, relying on gas imports principally. This reliance showed itself as a vulnerability in January 2022 when Russia decreased its supply of gas to Europe by 40%. Although the UK does not directly rely on Russian gas, the decreased supply to international markets meant spot prices rose globally. The UK’s quasi-crippling reliance upon global supply has created significant economic difficulties, with consumers in the UK feeling the squeeze. Whilst the Energy Security Strategy was geared to provide answers, its vision is clearly set in preventing future energy issues and does little to address current challenges. Yet, this does not mean the strategy is completely moribund.
The strategy sets out the aim for 95% of the UK’s electricity to come from low carbon sources by 2030. In achieving this, the government has set up the new ‘Great British Nuclear’ body to oversee the construction of one nuclear reactor a year. If the strategy delivers, 25% of the UK’s energy mix will be represented by nuclear in under ten years. Alongside this, the strategy hopes a boost in offshore wind farms will produce enough electricity to power every UK home by 2030. Yet, to the dismay of many environmentalists, there will also be greater oil and gas exploration in the North Sea. The strategy’s green credentials are further questioned by virtue of its neglect to reform legislation surrounding onshore wind farms. Since 2015, onshore wind farms subsidies have been removed and strict planning regulations imposed. Onshore wind farms are so rarely approved despite the fact they are the cheapest renewable energy and have direct community benefits, such as fixed price guarantees.
The benefits of onshore wind suggest the strategy’s near total focus on nuclear energy is misguided. As the only low carbon energy source that has increased in cost in recent years, it is not clear why support for nuclear energy seems to come at the cost of wind. Some see the government’s decision to double down on nuclear energy as kowtowing to their MPs. The PM’s Conservative colleagues insist their constituents could not bear to have a glimpse of a windmill in their eye line, with Transport Secretary Grant Shapps describing them as an “eyesore”. However, with the rebirth of the UK’s nuclear era, a windmill here and there may seem positively utopian compared to a skyline of cooling towers. If both forms of energy production are controversial, yet one is a fraction of the price, it is hard to see why onshore wind farms will not be utilised to unburden the UK from its reliance upon international gas imports. Arguably, this strategy is exactly in line with a government who has shown a penchant for grand infrastructure projects, as demonstrated by the feasibility study on a bridge over the Irish Sea.
Furthermore, amongst the drama of oil rigs, power plants and turbines, the Energy Security Strategy has a key pitfall. The document does nothing to address successive governments’ failure to insulate Britain. UK homes are some of the least well insulated in Europe, they are old, only 40% have loft insulation, and as a result 80% of energy bills go on heating. It is questionable that the Energy Security Strategy did not include a scheme to retrofit insulation, especially as it could be delivered immediately and would cut consumers fuel bills by 25%. Whilst this scheme would cost £7.5 billion, a seemingly hefty sum, it is but a third of the cost of a nuclear power station. There is no reason, therefore, why such a scheme has been left out of the national energy plan.
Regardless, if the Energy Security Strategy does come to fruition the UK will be more secure from international price hikes, as a reliable domestic source of energy removes the need for imported fuels. The strategy also sets the UK well on the way to net-zero carbon emissions. Yet, the impact of both achievements on consumers could be greater if the government had not so dogmatically focused on nuclear. Security and net-zero could be achieved quicker and cheaper if wind and insulation had got the attention they deserve. The Energy Security Strategy is a solution to national energy insecurity, yet whether its credentials are sound remains to be seen.