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New energy strategy boosts role of nuclear in UK energy transition

13/4/2022

UK nuclear power station Hinkley Point C’s unit 2 under construction Photo: EDF Energy
UK nuclear power station Hinkley Point C’s unit 2 under construction – eight more reactors to come potentially in the UK in this decade Photo: EDF Energy

The UK’s new Energy Security Strategy promises to ramp up nuclear energy along with accelerated deployment of wind, solar and hydrogen. The plan also supports continued exploitation of North Sea oil and gas ‘in the nearer term’ and aims for 95% of UK electricity generation to be low carbon by 2030.

However, there was a mixed reaction to the strategy, with environmentalists such as Greenpeace claiming that the UK government’s plans defied some net zero targets, while some experts suggested the measures should provide quicker relief from higher energy bills.

 

Announcing the strategy on 7 April 2022, UK Prime Minister Boris Johnson said: ‘We are setting out bold plans to scale up and accelerate affordable, clean and secure energy – 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.’

 

The strategy aims to accelerate nuclear up to 24 GW by 2050, representing about 25% of projected electricity demand. Small modular reactors are likely to form a key part ‘subject to technology readiness’. A new government body, Great British Nuclear, has been set up and will launch a £120mn Future Nuclear Enabling Fund this month. Ambitious plans are in progress to deliver up to eight reactors – equivalent to one reactor a year, rather than one a decade typically, including the Wylfa site in Anglesey.

 

The strategy offers a wide-ranging plan that includes:

  • Increasing nuclear capacity from 7 GW to 24 GW, including two plants at Sizewell and in Suffolk.
  • Raising offshore wind from 40 GW to 50 GW by 2050, which the Department for Business, Energy and Industrial Strategy (BEIS) said would be ‘more than enough to power every home in the UK’. This move will be underpinned by new planning reforms to cut approval times for new offshore wind farms from four years to one.
  • Solar power is targeted to grow five-fold from 14 GW to 70 GW by 2035, with potential reform of rules for installation of solar panels on homes and commercial buildings.
  • A new oil and gas licensing round is planned for North Sea oil and gas projects in the autumn, supported by a new task force.
  • An ‘impartial’ review of fracking is to be undertaken – despite continued strong opposition.
  • Up to 10 GW of hydrogen power is forecast by 2030, with at least half coming from green hydrogen, utilising excess offshore wind power to bring down costs, according to BEIS.

 

Despite concerns within the Conservative party itself, there will also be consultations on developing onshore wind by developing partnerships with ‘a limited number of supportive communities’ who wish to host new onshore wind infrastructure in return for lower energy bills. UK Transport Secretary Grant Shapps has been a vocal opponent of offshore wind, which he has claimed is an ‘eyesore’, and there has been heated debate among a group of MPs to thwart a major roll-out in England. Meanwhile, the UK government remains ‘open-minded’ about onshore reserves, having commissioned an impartial technical review on shale gas by the British Geological Society.

 

The strategy also notes plans to run a Heat Pump Accelerator Competition in 2022, worth up to £30mn to help reduce demand for gas.

 

The long-awaited energy security strategy comes in the light of a triple energy crisis caused by the climate emergency, rapidly rising global energy prices, provoked by surging demand after the COVID-19 pandemic and Russia’s invasion of Ukraine. 

 

Following the recent Inter-Governmental Panel on Climate Change (IPCC) report which suggests that developing new fossil fuel production should cease within 18 months to meet the 1.5oC climate target, BEIS claims the UK government’s new strategy ‘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’.

 

Mixed reaction

Commenting on publication of the energy security strategy, Nick Wayth, Chief Executive of the Energy Institute, said: ‘It’s great to see the ambition, scale and diversity of the government’s announcements today. In particular, its support for offshore wind – a huge UK success story – as well as hydrogen and new nuclear, which needs to be part of the energy mix and replace our ageing nuclear fleet.’ However, he expressed disappointment ‘at the lack of focus on cheap and immediate options’. He remarked: ‘There is little to address energy efficiency, the single thing that would make a permanent difference on bills today and in the long-term. And disappointment on onshore wind, the cheapest source of supply in the UK, which according to the government’s own polling is supported by 80% of the public.’

 

The Centre for Policy Studies (CPS) also welcomed the new energy strategy but warned that it may do little to bring down bills in the short term. The CPS appreciated the planned expansion of nuclear, hydrogen and offshore wind, and said that the return to annual North Sea licensing rounds for oil and gas was ‘overdue’. However, the lack of significant support for onshore wind, fracking and demand-side measures such as home insulation represented ‘a significant missed opportunity’. The CPS felt that incentivising communities to accept onshore wind was a good move (as mentioned by Greg Jackson, CEO of Octopus Energy, at the Energy Institute’s recent International Energy Week conference).

 

‘Supercharging ambition on green energy security is to be welcomed – we have the projects and are ready to build them… but we’ve got to get real on moving the barriers to make more clean, green, homegrown electricity a reality,’ added Keith Anderson, CEO of Scottish Power.

 

Meanwhile, TUC General Secretary Frances O’Grady was adamant that the energy strategy ‘fails to rise to the challenge of the climate emergency; and does little to reassure the millions of workers facing big falls in their living standards due to soaring energy costs’. He noted that the TUC had suggested that a mass home insulation programme would slash bills and create over 200,000 jobs, but this was ‘entirely missing from the strategy’.

 

On the positive side, Peter Jones, CEO of Neptune Energy, commented: ‘The government’s energy security strategy sends a clear message to investors that the UK is re-open for business. By recognising the inter-related importance of North Sea production, renewables, nuclear and energy efficiency, the strategy will help bring forward the investment needed to maximise the UK’s oil and gas reserves, reduce emissions and increase the sector’s contribution to achieving net zero.’