The overdue British Energy Security Strategy has been published, aiming to make ninety-five percent of electricity generation be low-cost and low-carbon by 2030. Its arrival is vital: with Russia invading Ukraine, and subsequent sanctions on oil exports, compounding the cost of living crisis hitting working families. Energy regulator Ofgem has raised the price cap on energy tariffs by fifty-four percent — after energy firms went bust, unable to pass increasing production costs off onto consumers. This arms race between suppliers and regulators is projected to add £693 to the average family’s bills. Therefore, the Strategy makes explicit its aim not to subsidise rising costs with redistributed taxpayer cash, but to instead bring down bills themselves in the short and long-term. Can the Strategy rectify decades of complacency, ensuring long-term national and energy security? Or must more be done to ensure Britain has heated homes and full petrol tanks?
The Prime Minister said there is a “Limit to [the] amount of taxpayer’s money” dedicated to reducing energy costs. He is right: windfall taxes and one-off loans are band-aids over the internal bleeding in our energy supply-chain. To reduce household bills long-term, Britain must repatriate fuel-source production.
The PM asserts that the only way to ensure the UK “can’t be blackmailed by Putin again” is to phase out reliance on fossil fuels entirely. Boris has instead promised to further harness “Britain’s inexhaustible resources of wind and – yes – sunshine.” The Strategy aims to power every home in the UK with 50GW of offshore wind by 2030, and quintuple the existing 14GW of solar capacity by 2035. But renewables are reliant on notoriously unreliable British weather patterns. Decreased wind produced eleven percent generation troughs in 2021. Inversely, turbine-breaking storms hit this February, with many blades feathered and production halted. A reliance on Goldilocks conditions doesn’t jive with warnings of imminent adverse weather conditions from doomsday prophets. Even if wind and solar could double grid contributions, consumer costs would increase by £10 every MWh.
The fully renewables grid the Green Party promises would cost upwards of £3 trillion, require quadruple existing grid capacity, and still fall short of existing consumer demand (30GW) by 74.5 percent. This expansion is modelled on Australia’s world-leading Hornsdale facility: itself only capable of storing twenty-four minutes of energy when the adjacent wind firm works at full capacity.
That’s saying nothing of associated construction costs: with our other adversary, China, controlling seventy percent of solar panel production, eighty percent of battery capacity manufacturing, and vast lithium reserves in countries like Zimbabwe, Argentina, and Afghanistan. Relying only on renewables is an economic and environmental liability.
Our interim option is to repatriate gas extraction. Half of present demand is met with existing supplies, but tapping just ten percent of the 7.9 billion barrels of oil, and 560 billion cubic metres of gas in the North Sea would satisfy national need for fifty years. It is encouraging, then, that Business and Energy Secretary, Kwasi Kwarteng announced intentions to “maximise domestic production in the North Sea.” The Strategy details that the North Sea Transition Authority will issue another licensing round this autumn, and that government has commissioned the British Geological Society to undertake an impartial technical review into shale gas.
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Another way of lowering costs involves leveraging pressure on global markets. In the Prime Minister’s foreword, he blames global gas price hikes on “factories roar[ing] back into life after COVID-19” and “Putin’s invasion of Ukraine”. Neglecting to blame President Biden’s anti–energy strategy for America being unable to supersede Russia as Europe’s leading gas supplier is a lie by omission. Pressuring Biden to reverse ideological anti-gas policies is a short-term solution to securing reliable energy imports.
The White House announced it has partnered with the European Commission to launch a task force to “reduce Europe’s dependence on fossil fuels”. The cross-continental group will diversify Europe’s liquid natural gas supply sources, whilst strategizing how to reduce gas demand using building retrofitting, and expediting planning for renewables and hydrogen storage infrastructure. The UK should be exploring a similar partnership with the United States. However, the instabilities of present renewables already mentioned in this article produced Germany’s reliance on Russia in the first place. Both the EU and UK should seek access to American liquid natural gas assets, without tying their buyer’s rights to renewables quotas.
But what about long-term energy independence?
Looking to make this Energy Security Strategy a “three, four, five year answer,” the government is investing billions, and leveraging private equity, to construct nuclear power plants and small modular reactors. The PM has promised “a new reactor every year” by 2030, with these eight reactors producing twenty-five percent of projected increasing electricity demand. Greg Hands MP incorporated my recommendation into the Nuclear Energy (Financing) Bill: switching existing Feed-In Tariffs to a Regulated Base Asset (RAB) model, and saving over £30 ($39) billion on each new plant. RABs allow energy companies to factor projected construction costs into the price of energy generated from existing sources. This mitigates risk involved in nuclear power’s high upfront capital, and lessens the likelihood of companies going bust due to government price caps. The previously mentioned policies to lower gas costs will offset the projected average of £80 ($104) a year added onto household bills until these plants are built.
A combined strategy of repatriated gas production, and new nuclear power stations, can provide a consistent, dispatchable energy baseload for a diversified, decarbonising grid. With the eventual adoption of renewables (should battery or hydrogen storage capacity come leaps and bounds along), and carbon capture and storage, Britain can become a low-cost, low-emission, energy independent archipelago.
In the interim, government must cut the twenty-five percent of energy bills spent on “green levies” for the renewables industry, to allow households to cope with the costs of pandemic policies, and allow markets — not bureaucrats — to pick the power sources of the future.
Connor Tomlinson is the Head of Research for the British Conservation Alliance and a political commentator for Young Voices UK. He appears regularly in American Spectator and on talkRadio. Follow him on Twitter: @Con_Tomlinson