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UK energy strategy fails key tests

those of the United Kingdom energy security strategy is characterized by one thing: lag.

Urgent action came after the Russian invasion of Ukraine, which turned ideas on energy security on their head and highlighted the need for an accelerated transition to cleaner, cheaper, domestic renewable energy sources. Nevertheless, it took the government weeks of struggle to produce the Thursday weak effort.

The result was hampered by tight budgets at the Treasury, which apparently cannot keep up even with a land war in Europe. It was also gutted by the myopia of backbenchers, who can only see as far as a constituency view, which they mistakenly think voters would be horrified to add a wind turbine.

It’s heavy on grandiose long-term targets for nuclear power, wind and hydrogen, and light on anything that would make a difference in the short term on safety, climate or bills. Overall, it fails on two fundamental issues: demand and supply.

It’s bizarre and self-destructive Don’t tackle energy efficiency frontal. This does not require nanny stats on driving speeds. (Why explaining how to run a boiler efficiently is so offensive to British sensibilities remains a mystery). UK policy repeatedly failed to patch the country’s aging, leaky housing stock: Household energy efficiency installations have declined by 90 percent since 2012.

The lack of action is bad for energy security. A package of measures could cut demand by the equivalent of 80 percent of the UK’s Russian gas imports this year, says think tank E3G. By 2025, efficiency, clean heat and renewables like solar could replace four times the gas we import from Russia.

It also presented the best chance to help with the cost of living crisis, as one in three households will face fuel poverty when bills start to rise again later this year. E3G estimates that households would save an average of £130 to £170.

Even for Treasury, this should be an investment with little regret: there is a clear market failure and the labor and supply chain is needed in any conceivable energy transition scenario. In general, when the government invests money in big, shiny projects like nuclear power, it should also want to prevent the expensive electricity it produces from escaping unnecessarily out draughty windows.

There was also little confidence in the implementation of these ambitious projects. A clear commitment to new nuclear power is welcome, but it remains too expensive and uncertain to underpin the net-zero transition. Even if rising wholesale prices have flattered the economy of late, electricity from Hinkley Point would still cost more than £125 per megawatt-hour compared to projected market prices of £95 in 2025.

The goal of meeting a quarter of electricity needs from nuclear power by 2050 requires at least four — if not five or six — more Hinkleys. (Small modular reactors are unlikely to play a large role in this time frame.) This requires a new, untested funding mechanism. It also requires a cookie-cutter approach to production lines, argues energy analyst Peter Atherton, who replicates a technology better and faster every time – a method the UK has so far resisted.

Elsewhere, the government raised targets that had already been set different strategies in the past year. It raised concerns about onshore wind power, one of the fastest-to-deploy technologies, and vowed to only consult on “limited” opportunities. That’s stupid given that suggests a poll 70 percent support for onshore wind within communities. Nor does it bode well for other debates if even war and deprivation cannot assuage uneasiness about the prospect.

Meanwhile, raising an already ambitious 40GW offshore wind target to 50GW in 2030 makes it unattainable, especially as every European country will attempt a similar acceleration.

Promised reforms can help accelerate adoption. But one wonders if the Nimbys in Parliament have estimated the amount of onshore infrastructure required to bring offshore wind to its end users (which is the subject of another government strategy) and do so (hopefully) with plans centered around oil to integrate and gas production, hydrogen and carbon capture and storage in the North Sea.

This strategy was not bold and failed to connect the dots between energy affordability, security and climate change. What was in place requires greater coordination to have any chance of being efficiently delivered on time or delivering the promised jobs and economic benefits.

All of this requires a different strategy – perhaps a less belated and disappointing one.

helen.thomas@ft.com
@helentbiz

https://www.ft.com/content/ebfc8c0b-7acc-4695-b4be-45e0b8b0ba0f UK energy strategy fails key tests

Adam Bradshaw

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