North Sea and UK’s regions at heart of energy security plan

The government has announced its long-awaited plans into how the UK will fuel its transition to net zero by 2050. The Energy Security Strategy pledges more nuclear and renewable energy generation.

Сopenhagen, Denmark - December 26, 2014: Øresund is the sound separating the danish island of Zealand from Sweden. A substantial number of windmills are erected in the sound.

Ruth Holmes

8 April 2022

Amid rapidly rising utility costs for consumers and businesses and the race to net zero, the government’s Energy Security Strategy sets out how it will accelerate the deployment of wind, nuclear, solar and hydrogen power, while supporting the production of domestic oil and gas in the nearer term.The government believes its plans could see 95% of electricity by 2030 being low carbon.

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Nuclear to power future plans

The strategy will see a significant acceleration of nuclear, which it is anticipated will provide up to around 25% of projected electricity demand. Small Modular Reactors will form a key part of the nuclear project pipeline subject to the readiness of the technology.A new government body, Great British Nuclear, and a £120 million Future Nuclear Enabling Fund will spur the commissioning of up to eight new reactors, including Wylfa site in Anglesey.The plan also sets out plans to boost on- and offshore wind and solar power, the launch of a new licensing round for North Sea oil and gas projects, and to double low carbon hydrogen production capacity by 2030 to provide cleaner energy for British industries and transition the economy away from fossil fuels.

Job creation in the clean energy economy

Launching the strategy, Prime Minister, Boris Johnson, said: “We’re setting out bold plans to scale up and accelerate affordable, clean and secure energy made in Britain, for Britain – from new nuclear to offshore wind – in the decade ahead.“This will reduce our dependence on power sources exposed to volatile international prices we cannot control, so we can enjoy greater energy self-sufficiency with cheaper bills.“This plan comes in light of rising global energy prices, provoked by surging demand after the pandemic as well as Russia’s invasion of Ukraine. This will be central to weaning Britain off expensive fossil fuels, which are subject to volatile gas prices set by international markets we are unable to control and boosting our diverse sources of homegrown energy for greater energy security in the long-term.”The government expects the British Energy Security Strategy to increase the number of clean jobs in the UK by supporting; 90,000 jobs in offshore wind by 2028 – 30,000 more than previously expected; 10,000 jobs in solar power by 2028 – almost double its previous expectations; and 12,000 jobs in the UK hydrogen industry by 2030 – 3,000 more than previously expected.

Energy security strategy receives lukewarm response

Responding to the Energy Security Strategy, ACE, the association for the UK’s professional consultancies and engineering companies operating in the social and economic infrastructure sectors, Stephen Marcos Jones, CEO of ACE said: “Be it wind, solar, hydrogen or nuclear energy, our members are critical to the successful delivery of complex infrastructure projects. They stand ready to work in close partnership with government in the creation and design of a more secure, and less carbon intensive, domestic energy system.”“We welcome the investment in up to eight new nuclear plants alongside increased investments in offshore wind, solar and hydrogen – crucial if we are to enhance energy security and meet net zero targets in an affordable way for consumers.“However, to help us on our net zero journey, we would have liked to have seen more to encourage the delivery of the cheapest forms of renewable energy, onshore wind and solar, as well as more on driving greater energy efficiency. We must not forget that it will take time for any new strategy to deliver results – for energy security, our net zero targets, or on affordability. Nevertheless, the strategy outlines a positive and proactive intent.”The plan has also prompted a mixed reaction from business representative bodies. Rain Newton-Smith, CBI Chief Economist, said: "This strategy sets an ambitious bar for a more resilient, low carbon energy system for the future. Bold words must now be matched by bold actions from the government. The proof will be in the strategy’s delivery, in partnership between business and government. Business believes greater energy independence must go hand-in-hand with delivering a net-zero, higher growth economy."Increasing our domestic generating capacity is an essential part of dealing with the current energy crisis. Big bets on nuclear will provide clean and stable power for consumers and businesses. This scale of ambition should be replicated for other renewable technologies like onshore wind. Commitment to planning reforms and rapid approvals is what will really make the difference now.”

Energy efficiency focus lacking

While welcoming the long-term view as “a step in the right direction”, the British Chambers of Commerce (BCC) voiced its concern that businesses need support now to deal with high energy costs, echoing the CBI in its call for help through an extension of the Recovery Loan Scheme.Alex Veitch, Director of Policy and Public Affairs at the BCC, said: “The government’s energy strategy is a welcome step in the right direction which will help meet our net zero targets and reduce firms and households' exposure to volatile global energy markets in the long term.“The first step in any energy security strategy must be to reduce demand yet this plan fails to bring forward support for energy efficiency measures.“The transition to the cheaper, cleaner energy sources of tomorrow is vital, however prices are soaring today, and businesses need support now. This strategy is a missed opportunity to provide that which is why we are urging government to introduce a temporary SME Price Cap, expansion of the energy bills rebate scheme to include SMEs, and a six-month extension to the Recovery Loan Scheme.”

Businesses squeezed by energy costs

Alex (Alexandra) Hall-Chen, Senior Policy Advisor at the Institute of Directors, said the commitment to low carbon energy production is welcome, but greater ambition and leadership is needed to rapidly increase renewable energy production improve energy efficiency and help businesses now. “Business leaders want two things from a national energy security policy. Firstly, they want price stability so that they can plan. In our most recent poll, 53% reported the cost of energy having a negative impact on their business, up from only 17% this time last year. We are also concerned that the measures announced will do little to help businesses facing high energy costs in the immediate future.“It is also important that small and medium sized businesses are given greater incentives and support from government to help them invest in measures to become more energy resilient and energy efficient which, to date, has been a gap in the government’s climate change strategy."

Renewable energy fuels levelling up agenda

Simone Rossi, UK CEO of energy company, EDF, which is constructing the new nuclear power station at Hinkley Point C, said: “Britain is right to take control of its energy future, with a step change in ambition for electricity from wind, nuclear and solar, and greater energy efficiency.“Building more new nuclear will reduce Britain’s dependence on overseas gas and keep energy prices stable, creating thousands of jobs while we’re doing it. “At Hinkley Point C we’re already building British nuclear, with 3,600 British businesses and 22,000 people making it happen, including over 800 apprentices. The fastest way to get more nuclear in Britain is get on with the next two units at Sizewell C. It’s a copy of Hinkley Point C, the design is approved and ready to go, and British manufacturers are experts in how to build it. Building more of the same design is the best way to bring down costs and develop a strong UK supply chain.”