As expected, there was an emphasis on nuclear energy; carbon capture, use and storage (CCUS); and renewables, including solar, floating offshore wind, hydrogen; as well as acceleration of grid infrastructure expansion to deliver more clean power; in addition to electricity market reform. However, there was disappointment regarding a lack of emphasis on improving energy efficiency. And notably, no mention of boosting subsidies to encourage the decarbonisation of transport, homes or industry for that matter, which could have created many thousand of jobs.

There was also concern that the Treasury failed to recognise the need to match the scale of renewables investment shown by the Inflation Reduction Act (IRA) in the US or the European Union’s (EU) Renewable Energy Directive. Indeed, the European Commission has said additional investments of €113bn ($123bn) in renewable energy and hydrogen infrastructure will be needed by 2030 if EU countries are to end their reliance on Russian fossil fuels.

UK Secretary of State Grant Shapps presented ‘ambitious plans to scale-up affordable, clean, homegrown power and build thriving green industries in Britain to boost the country’s energy security and independence, reducing household bills for the long term and maintaining a world-leading position in achieving net zero’, in the 2,500 page Powering up Britain report.

Shapps said he was proud to be announcing the new Department for Energy Security and Net Zero’s (DESZN) manifesto for the future. ‘By setting Britain on course to greater energy independence. By bringing down bills to deliver consumer security. By embracing renewables and nuclear power, it will deliver climate security. And by creating new green industries, it will deliver economic security.’

To meet this bold ambition the Powering up Britain report sets out a wide-ranging package of plans aimed to fully decarbonise the power system by 2035, ‘subject to security of supply’ – a clear reminder that the government is still licensing oil and gas developments in the North Sea as well as giving approval for a controversial coal mine in Cumbria before Christmas 2022.

The report also recognises that the UK will need to move to a power system that primarily relies on low-carbon technologies, and references the country’s ‘underlying vulnerability to international fossil fuel prices’.

Having already announced investing up to £20bn for CCUS in the Spring Budget 2023, and the £120mn Future Nuclear Enabling Fund, the new DESZN will shortly announce a shortlist of applications.

Key elements of the government’s energy strategy and net zero plans include:

• Great British Nuclear (GBN) will be responsible for driving delivery of new nuclear projects, through British Nuclear Fuels as operator. The first priority for GBN is to launch a competitive process to select the best small modular reactor (SMR) technologies, commencing in April, with ‘down-selection’ in the summer, to assess and decide on the leading technologies by the autumn. The government has also launched the Future Nuclear Enabling Fund of up to £120mn for targeted (pilot-based) support.
• Committing to CCUS, with plans for eight projects. Starting with two CCUS clusters in the north-east and north-west, scheduled for expansion later this year under Track-1, with confirmation promised of the next clusters for deployment in Track-2 to follow.
• Delivering a hydrogen economy, with ambition of 2030 hydrogen production to generate enough clean electricity to power all of London for a year.
• Accelerating deployment of renewables with the goal of developing up to 50 GW of offshore wind by 2030 and to quintuple solar power by 2035. The latest allocation round of the Contracts for Difference (CfD) scheme is to be opened. A £160mn fund is to be spent under the Heat Pump Investment Accelerator, with the aim that heat pumps are manufactured in the UK at a scale never seen before. 
• Increasing energy efficiency, with a new Energy Company Obligation scheme to help reduce heating costs in about 300,000 of the country’s least energy efficient homes, as part of a £1bn energy efficiency programme by March 2026 – as part of the aim of 15% demand reduction by 2030 ‘to not only help lower bills, but also support our net zero objectives’.
• Decarbonising transport with more than £350mn investment in electric vehicle (EV) charging infrastructure. And consultation on a long-term strategy for sustainable aviation fuel (SAF) uptake in the UK through a mandate to be introduced from 2025.
• Speeding up planning and networks with publication of the government’s Nationally Significant Infrastructure Project in February 2023, which sets out reform to the consenting process.
• Mobilising private investment with an updated 2023 Green Finance Strategy, aiming to put the UK at the forefront of the growing green finance market, to maximise initiatives such as the UK Infrastructure Bank with its £22bn of financial capital.

So, what was the reaction?

Policy advisors at E3G felt the government’s green policy package was ‘underwhelming and fails to get the UK back in the race to net zero or ensure that the UK is internationally competitive in the clean tech industries of tomorrow’. Ed Matthew, Campaigns Director at E3G, added: ‘The vast majority of the policies were announced last year and there is little new money on the table. The package as a whole is underwhelming. Although it marks progress, it is unlikely to convince international investors that the UK can retain leadership as the green industrial revolution unfolds. Without finance, nothing on net zero will get done. However, the revised Green Finance Strategy sets out some welcome steps towards the Prime Minister’s ambition of forging [the UK as] a world-leading net zero financial centre.’

Alwyn Hopkins at EY UK&I said: ‘The UK’s policy on decarbonisation in the aviation industry has included a focus on sustainable aviation fuel (SAF) for some time now, so to see the latest roadmap for a SAF mandate and a second consultation is no surprise.’

Greenpeace suggested that: ‘Green Day has turned into Groundhog Day, with yet another government failure on climate action.’ It continued: ‘This piecemeal, re-heated and confusing announcement is just not enough to meaningfully tackle climate change or to provide secure, affordable energy for households, where hundreds of thousands of homes will remain uninsulated by next winter… Cheap wind power is still effectively banned onshore in England.’ However, while it welcomed the £380mn announced by the government to boost EV charging infrastructure; Greenpeace added: ‘The measures do not go far enough.’

Meanwhile, Jess Ralston, Head of Energy at the Energy and Climate Intelligence Unit, complained that: ‘The gas crisis has made it clear that real energy security comes from moving away from oil and gas, particularly as the North Sea inevitably declines. With bills still high, no new money for insulation will leave many households in the cold.’ Moreover, ‘The Chancellor pushing response back to the US Inflation Reduction Act and the EU Net Zero Industry Act to the autumn could be the final nail in the coffin for businesses and offshore wind investors, who will simply move investment to where there is long-term policy and regulatory certainty.’

Gillian Charlesworth, CEO of the Building Research Establishment, welcomed the government’s latest plans to drive investment in reforming the UK’s energy system. She said: ‘We need a clear plan to transition our homes and buildings to clean heat, and this latest announcement is a key step forward in achieving this. However, I am concerned that there is not enough sense of urgency about the scale of the challenge we face.’