The government has released its long-awaited Energy Security Strategy, which it says includes “bold plans” for “cleaner and more affordable energy to be made in Great Britain to boost long-term energy independence, security and prosperity”.
However, it was published amid disagreement rumours between Number 10 and Number 11, and many energy industry and environmental commentators have been quick to point out that there is not much in it to help struggling businesses and households right now. Business Secretary Kwasi Kwarteng even admitted that it is "more of a medium three, four, five-year answer".
As such, some have dubbed it an Energy Supply rather than a ‘Security’ Strategy. For us, it feels like a missed opportunity to achieve some quick wins, particularly for businesses, who are struggling right now with short-term liquidity issues and high invoices caused by the volatile wholesale market.
For example, helping businesses reduce energy consumption through more innovative efficiency solutions is a real ‘no regrets’ action that could be taken. These can be implemented quickly and would result in immediate savings both in terms of their bottom line and decarbonisation efforts.
Similarly, incentivising businesses to become more self-sufficient through renewable on-site generation is a ‘win-win’ solution. It would protect businesses from market volatility and help them decarbonise. In addition, businesses with on-site assets can provide a much needed source of power during times of high demand.
So, with short-term actions lacking, what positives can businesses take from this latest announcement?
A growth in clean energy is a good thing
Clearly, any increase in homegrown power from low-carbon sources is a welcome move to help businesses become more energy independent, less carbon intensive and more resilient in the medium to long term.
The key headlines from the Strategy are:
One of the points of contention, however, is around oil and gas, with the government announcing that a licensing round for new North Sea oil and gas projects will launch in the autumn. It said it was to “recognise the importance of these fuels to the transition and to our energy security, and that producing gas in the UK has a lower carbon footprint than imported from abroad”, although many environmental campaigners would disagree.
- Acceleration of nuclear - the ambition is to have up to 24 gigawatt hours (GW) by 2050, representing up to around 25% of projected electricity demand. A new government body, Great British Nuclear, will be set up and there will be the launch of a £120 million Future Nuclear Enabling Fund this month
- Increase in offshore wind - a commitment to have up to 50GW by 2030, with up to 5GW from floating offshore wind in deeper seas. The government has pledged to cut planning approval times for new offshore wind farms from four years to one year to meet this target
- Consultations around onshore wind - despite the rumours that planning rules would be relaxed to allow more onshore wind, the Strategy has instead said that the government “will be consulting on developing partnerships with a limited number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills”
Increase in hydrogen production could help energy intensive industries (EIIs)
One of the key headlines is the intention to double the production capacity of low-carbon hydrogen by up to 10GW by 2030, with at least half coming from green hydrogen.
With hydrogen being highlighted as a key fuel to enable many industries to move away from fossil fuels, this could be a welcome announcement for the longer term.
Installing solar photovoltaic (PV) has become a popular way for businesses to generate their own renewable energy. The Strategy said it intends to “radically simplify planning processes with a consultation on relevant permitted development rights and will consider the best way to make use of public sector rooftops”. So, we will wait to see what this brings in terms of real benefits to public and private organisations.
Overall, with no new measures to help reduce consumption or counter the current market volatility, the Strategy does little to help businesses address the short-term issues they are facing right now.
That is why it is important to speak to your energy partner to help you navigate through these uncertain times. For further information or support, please get in touch with your Client Lead or Account Manager in the first instance, or drop us an email to email@example.com