This is a precious opportunity to wean ourselves off volatile fossil fuels and tackle the cost of living crisis – the government mustn’t squander it.
Despite the resolve from Europe to quit its addiction to Russian energy, importing Russian fossil fuels into the EU has put almost £20bn in the Kremlin’s coffers since the invasion of Ukraine began. Through a mix of renewables, energy efficiency and importing more non-Russian fossil fuels, the EU wants to cut Russian gas imports by two-thirds this year and completely eliminate it by 2030. The UK is due to reveal its own new energy security strategy this week. The business secretary has stated his intention to cut our dependence on fossil fuels, but the strategy has already been delayed due to major differences of opinion within the government when it comes to public spending, nuclear power and fracking.
At the same time, the combined impact of high inflation and soaring energy bills means over 34% of the population will be unable to afford the cost of living this month. If the energy security strategy is also to deliver security for UK families, it cannot ignore the pain that millions of households are currently facing. The chancellor’s spring statement and energy support package were widely condemned as inadequate against a 54% rise in energy bills starting this month.
If the government really wants to stop importing Russian gas and make sure everyone can afford life’s essentials, here are nine things they should include in this week’s energy security strategy:
1. Go big on offshore wind
The government is reportedly considering a target to almost quintuple the UK’s offshore wind capacity by 2030. This massive increase will generate enough electricity, cumulatively, to more than replace all the gas-generated electricity we use today.
2. Triple onshore wind and solar
Boris Johnson is expected to drop plans to scale up the number of onshore wind turbines. But onshore wind is an extremely cheap source of clean energy, and we already have over 240 onshore wind projects in the pipeline with planning consent, and 33GW of onshore wind power at different stages of construction, approval or application. The government should offer a clear path to building trebling onshore wind capacity by 2030, with annual auctions, accelerating planning consents and more certainty on the variable costs of transmitting its electricity.
3. Slash energy demand
A Great Homes Upgrade programme retrofitting over 17m homes by 2030 would make sure everyone can live in a well-insulated home heated by clean, green energy. Upgrading homes could save at least £345 per family. Combined with investing an additional £9.75bn on low-carbon heating and energy efficiency, this could cut gas demand between 20 – 25% by 2030. Insulating homes and installing heat pumps could eliminate Russian gas imports within five years.
4. Support community energy
Distributed or small-scale energy generation owned by local communities or groups can help retain the profits of energy generation and management within communities while contributing to greater social benefits. The treasury could begin with the simple step of reinstating the social investment tax relief for community energy groups.
5. Reform the electricity market
Renewables are now amongst the cheapest energy sources we have, and the government should make sure this low cost trickles down to savings on our energy bills. If the government sets bold targets for renewables, it will ultimately reduce wholesale prices, possibly even to levels where power suppliers could pay money to customers for several weeks a year. The market design should enable and incentivise energy demand reduction and energy system flexibility to manage variations in renewable energy generation caused by sunless nights and windless days.
6. Build nuclear — but not on the backs of ordinary households
The government has indicated that it intends to take a 20% equity stake in the Sizewell C nuclear plant in Suffolk. Nuclear power is notoriously expensive and, unlike other technologies, deploying more nuclear power has only led to costs going up. Boris Johnson is enthusiastic about nuclear power, but this needs to be tempered with assurances that further costs aren’t loaded on to bills for low-income households.
7. Support local authorities
Local authorities are best placed to help their constituents cut energy use and undertake detailed local energy planning. The Local Authority Delivery scheme for retrofits has been effective in making homes warmer but only 10,000 households have benefitted from it so far, each saving an average of around £120 a year. Scaling that programme up and offering long-term resources for local authorities to have a clear statutory duty to manage their local energy supplies can push us towards greater energy democracy and a more cost-effective energy system.
8. Don’t ignore network costs
As more renewables, heat pumps and electric vehicles connect to the grid, the wires that deliver that energy might not have the capacity to accommodate them, potentially raising the price we pay for new networks. Avoiding this will require a more flexible energy system that includes a lot more batteries to store spare electricity, and better demand management, potentially avoiding £4 – 15bn in network reinforcement costs.
9. Support household incomes right now
Insulating the nation’s homes and building more renewable power will take time — but energy bills are soaring today. An emergency uplift in benefits in line with today’s inflation rate, and reinstating the £20-a-week uplift to universal credit would form the first steps of a Living Income, a new social security system which would make sure everyone can afford life’s essentials.
This week’s energy security strategy is a precious opportunity to wean ourselves off volatile fossil fuels and tackle the cost of living crisis. Let’s hope the government doesn’t squander it.
Image: Scottish Government (CC BY-NC-ND 2.0)
