Rules Brittania: the UK’s new Energy Security Strategy, and the bioeconomy

In the UK, the British Government announced its Energy Security Strategy to create a ‘flow of energy that is affordable, clean and above all secure. We need a power supply that’s made in Britain, for Britain – and that’s what this plan is all about.”

Prime Minister Boris Johnson observed, “for most of the industrial age, the UK was what we now call ‘energy independent’. The great coal fields of the North, the Midlands and South Wales heated our homes, fed the voracious boilers of Megawatt Valley and created vast volumes of town gas for municipalities across the country. In time they were joined by a steady flow of oil and natural gas extracted from deep below the waters of the North Sea. 

“Yet as the years passed we drifted into dependence on foreign sources. Sometimes this was through deliberate planning; more often it was the byproduct of policy fudges, decision-dodging and short-term thinking. Whatever the cause, the result today is all too obvious to anyone who receives an energy bill.

“Global energy costs have been rising for some time as demand soars and factories roar back into life after COVID-19; Putin’s invasion of Ukraine pushed them still higher and, ultimately, it is the consumer who ends up paying the price. For years, governments have dodged the big decisions on energy, but not this one.”

Johnson pledged that the policy will look forward towards clean energy instead of backwards to the days of coal, that his government will “take advantage of Britain’s inexhaustible resources of wind and – yes – sunshine. We’re going to produce vastly more hydrogen, which is easy to store, ready to go whenever we need it, and is a low carbon superfuel of the future. We’re embracing the safe, clean, affordable new generation of nuclear reactors, taking the UK back to pre-eminence in a field where we once led the world.”

The government touted actions to date on its 10-Point Plan. Let’s review those.

The UK’s 10-Point Plan: Delivery highlights so far

Advancing offshore wind

– Over £1.6 billion invested, securing 3,600 jobs 

– 11GW already generated, and another 12GW in the pipeline 

– Up to £320 million in government support for fixed bottom and floating wind ports and infrastructure 

– Additional government support for other low-cost renewables technologies

Driving the growth of low carbon hydrogen

– £7.5 million awarded to ITMs Gigastack Project, an early mover in the market, with potential to support up to 2,000 jobs over time 

– Preparing to allocate up to £100 million of revenue support to initial electrolytic projects 

– Launching £240 million to Net Zero Hydrogen Fund later in April 

– Developed indicative Heads of Terms for hydrogen business model contract

Delivering new and advanced nuclear power

– Committed to provide up to £1.7 billion of direct government funding to enable one nuclear project to FID this Parliament 

– Investing £100 million into Sizewell C to help develop this project 

– Investing £210 million to develop Small Modular Reactors with Rolls Royce 

– Announced a £120 million Future Nuclear Enabling Fund to progress new nuclear

Accelerating the shift to zero emission vehicles

– £4 billion of investment has flowed into the UK zero emission vehicle sector 

– Building 2 new gigafactories, in Sunderland and Blyth 

– 30,425 public charge-points in the UK with 100 new rapid chargers added to the UK network every month during 2021

Green public transport, cycling and walking

– 1,678 zero emission buses funded 

– Launched Active Travel England, increasing cycling by 75%

Jet zero and green ships

– Consulted on introduction of a UK Sustainable Aviation Fuel (SAF) mandate, requiring jet fuel suppliers to blend an increasing proportion of SAF into aviation fuel from 2025 

– Allocated £23 million as part of the Clean Maritime Demonstration Competition

Greener buildings

– Cut VAT for insulation and heat pumps 

– 46% of homes in England at EPC C or above, up from 9% in 2008, and 2,300 social housing homes in the process of being improved 

– Over 60,000 heat pumps installations estimated by industry, now offering households grants of £5,000 towards an air source heat pump so they are cost competitive compared to a gas boiler

Investing in CCUS

– Committed £1 billion in public investment to decarbonize our industrial clusters 

– Announced the first 2 clusters in Teeside, the Humber and Merseyside 

– Launched phase 2 of the Industrial Energy Transformation Fund, allocating £60 million to decarbonization technologies, with a further £100 million delivered in May and October this year

Protecting our natural environment

– Additional £124 million provided at Spending Review 2021 to the Nature for Climate Fund to support tree planting and peat restoration, going beyond 2019 manifesto commitment of £640 million

– 13,290 hectares of trees planted across the UK in 2020 to 2021 

– Launched 3 new Community Forests in Cumbria, Devon and the North-East 

– £5.2 billion invested in a 6 year programme of flood defences

Green finance and innovation

– £615 million allocated from the Net Zero Innovation Portfolio 

– Set the JET world record, with 59 megajoules of heat energy in a single fusion ‘shot’ that lasted 5 seconds

The Energy Security Strategy

The government is targeting energy efficiency, solar, wind, nuclear, utilizing the North Sea as a CO2 storage reserve, more on that here. Let’s look at hydrogen.

The government writes: 

We have virtually no low-carbon hydrogen in our system today – but technology is making this a near-term reality with vast potential applications. By investing in the North Sea, renewables and nuclear through this plan, the UK is well-placed to exploit all forms of low carbon hydrogen production. Our drive on renewables makes green hydrogen especially valuable for flexibility and as a storage solution. Excess renewable electricity used to produce hydrogen can be stored over time and used to power the grid when needed. We will double our UK ambition for hydrogen production to up to 10GW by 2030, with at least half of this from electrolytic hydrogen.

We will offer clear long-term signals alongside immediate support:

•doubling our ambition to up to 10GW of low carbon hydrogen production capacity by 2030, subject to affordability and value for money, with at least half of this coming from electrolytic hydrogen. By efficiently using our surplus renewable power to make hydrogen, we will reduce electricity system costs

• aiming to run annual allocation rounds for electrolytic hydrogen, moving to price competitive allocation by 2025 as soon as legislation and market conditions allow, so that up to 1GW of electrolytic hydrogen is in construction or operational by 2025

• designing, by 2025, new business models for hydrogen transport and storage infrastructure, which will be essential to grow the hydrogen economy

• leveling the playing field by setting up a hydrogen certification scheme by 2025, to demonstrate high-grade British hydrogen for export and ensure any imported hydrogen meets the same high standards that UK companies expect

To support other countries to make the same transition to clean, affordable, secure energy, the UK is:

• leading the Clean Green Initiative, launched by the Prime Minister at COP26

• committing to double our International Climate Finance to £11.6 billion over 5 years

• collaborating with partners to reduce reliance on fossil fuels, from the Powering Past Coal Alliance, the Green Grids Initiative, to nuclear. The UK has decades of experience in uranium enrichment and fuel fabrication to support alternatives to Russian fuel. We are working with like-minded partners at the IAEA and other fora to form an alliance that shapes international regulations to drive SMR deployment. Our North Seas collaboration will accelerate the development of offshore windfarms with links to continental power grids, unleashing hundreds of gigawatts of clean energy into North Seas countries’ electricity systems

Reaction from the stakeholders

Overall, a chorus of “spend more in our sector”: was heard from the wind industry. Solar and hydrogen sector experts were pleased.

Econergy’s CEO, Eyal Podhorzer said, “The development of the UK’s solar PV capacity has a vital role to play in accelerating the low-carbon transition, and so we welcome the UK Government’s ambition on the potential for developing a five-fold increase in the amount of solar power as part of the new Energy Security Strategy. Solar power represents one of the quickest and affordable ways to reduce reliance on foreign fossil fuels and lower energy bills.

Glennmont Partners co-founder Peter Dickson said: “The Government’s Energy Security Strategy [published today] was an opportunity to demonstrate the UK’s commitment to producing as much secure, low carbon energy capacity as possible, in the shortest available time, to reduce our reliance on foreign fossil fuel imports. While we welcome the Government’s ambition to increase the UK’s offshore wind capacity to 50GW by 2030 and ramp up domestic solar capacity, it is our belief that the measures announced should have gone further, especially in the field of onshore wind.

Salah Mahdy, Global Director of Renewable Hydrogen at Howden, comments: “We welcome this move from the UK government which recognises how crucial hydrogen production is to the energy transition and broader energy security. Doubling the hydrogen production targets will attract more investment to this market, will create more new jobs, strengthen the economy in the long term, and eventually it would mean that the potential huge economic benefits of the hydrogen industry are kept in the UK.

The Bottom Line

We didn’t hear much about transport — the UK has indicated that energy security starts — and finishes in the home. 

We note there are billions for zero emission vehicles, and overall the UK has outlined 14.729 billion for its strategy, but announced only 23 million for transport fuel innovation, focused entirely on green marine. That’s 0.2 percent of spending on an area representing some 25 percent or more of overall emissions.

So, of course we like the ambition, but the allocations are laughable. It’s like spending $200 million on salaries for a football team of international stars and investing just $125,000 in the goalkeepers. You’re bound to lose, and lose, and lose.

For sure, the UK has an ambitious aviation target and the renewable fuels industry is going to have to deliver there with massive increases in capacity. Prime Minister Boris Johnson blames “policy fudges, decision-dodging and short-term thinking” for the UK’s problems, and well should he understand that, for rarely has a document indulged more in all that in the name of energy security. For nuclear, billions, for aviation, “Consultations”. For wind, a billion, for switching fuels for lorries, nothing. For low-carbon ZEVs, billions, for carbon-negative fuels, nothing.

There is nothing wrong with transforming the prospects for nuclear, hydrogen, heat pumps and electric vehicles. Expecting the hardest sector – heavy-duty transportation — to do the hard yards of defossilization entirely alone, well, what can we say? 

The Prime Minister talks of delivering a signal and he has done it — it’s “electrify everything”, British-style.