Analysis

Energy Security Strategy: What Can We Expect?

Andrew McQuillan

This Thursday the Government is set to publish its long-awaited Energy Security Strategy in response to the turbulence unleashed in the sector as a consequence of Russia’s invasion of Ukraine. Ahead of its release, we set out what we can expect the Strategy to say and the likely political ramifications.

What is it?

The Strategy is focused on making the UK’s domestic energy sector fundamentally more resilient and, in the words of the Prime Minister, “wean the country off its dependency on Russian hydrocarbons”.

While Ministers are agreed on the importance of that objective, there have been clear divisions at Cabinet level on how best to achieve it. Predictably, the Treasury has expressed concerns about the cost of some of the flagship announcements such as more nuclear power stations, while there has been resistance from Nimbyish backbenchers and their allies in Government around more onshore wind farm developments.

All of this has contributed to a series of delays to the Strategy’s publication until it was finally signed off last week.

 

What’s going to be in it?

New nuclear reactors look set to be order of the day after years of inertia; the Prime Minister is an enthusiastic proponent, with BEIS Secretary Kwasi Kwarteng pointing to the example of France as a country which has derived energy independence from its strategic investment in nuclear over several decades. Six or seven new power stations by 2030 have been mooted, while a new company called Great British Nuclear will be established to support the small modular reactor sector. This is despite well-documented Treasury squeamishness about the cost.

Offshore wind is set to be the other big winner, with the Prime Minister keen on appointing a “Kate-Bingham like” figure to lead a substantial expansion of the sector. Solar is another green technology which will play a part, with financial incentives and planning changes to stimulate adoption set for inclusion in the plan.

There may also be a reprieve for the North Sea oil and gas sector, with the Prime Minister repeatedly stressing the importance of increased domestic production. Plans for further exploration would however open another front in Westminster’s ever terse relationship with Holyrood; only recently, the SNP Government – supported by the Scottish Greens – said a new oilfield near Shetland should not proceed.

 

What’s unlikely to feature?

Despite some enthusiastic briefing over recent weeks about a potential renaissance for onshore wind turbines – the bête noire of shire Tories – they seem likely to play a less prominent role based on the indications coming out from Government. A counteroffensive led by some backbenchers and their Cabinet allies, notably the Chief Whip Christ Heaton-Harris, who is a longstanding campaigner against onshore wind, appears to have won the day.

It therefore seems unlikely that the effective ban on new onshore wind farms introduced in 2015 will be scrapped in the Strategy, though a review of planning legislation could take place – Kwasi Kwarteng has been keen to emphasise the importance of “community consent” in shaping the delivery of any new developments included in the Strategy.

The science and safety of fracking, which has been enthusiastically championed by some Tory MPs, is to be reviewed again but is unlikely to emerge from the long grass this time round given the controversy which still surrounds it.

 

What happens next?

The Government have positioned the Strategy as essential for the long-term. However, given the problems posed by the cost-of-living crisis, its benefits may not be immediately clear to those people across the country dealing with spiralling bills.

As with the recent Spring Statement, goodwill is likely to be limited – Keir Starmer has already set out his stall, stating the Strategy needs to go harder and faster on hydrogen, onshore wind and tackling energy inefficient building stock.

However, with the emphasis particularly on nuclear, it does signal a step-change in the UK’s energy approach and presents an opportunity for business which seemed unlikely even a few months ago.

The PA team will provide a full summary of the Strategy, detailing key announcements and reaction, following its publication on Thursday.