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05 Jun 2023

Policies

Francis Mcgowan analyses the government’s plans for achieving energy security and net zero carbon emissions as set out in the recent ‘Powering up Britain’ strategy, highlighting the uncertainty that remains around certain aspects of the plans.  

At the end of March the government published ‘Powering up Britain‘, described by Grant  Shapps, the Secretary of State for Energy Security and Net Zero, as his recently-created department’s ‘manifesto for the future’.  At the heart of around 3000 pages of (re)statements, initiatives and consultations are plans for meeting the twin objectives of increasing energy security and achieving net zero emissions.

By all accounts, the government’s presentation of the plan was abruptly reconfigured to emphasise energy security over the original intention of addressing how the UK would reach its net zero objectives and respond to the challenge of the Biden administration’s Inflation Reduction Act (IRA) – a programme of incentives designed to subsidise the development of clean energy industries in the US.

This was due in part to unresolved optics within government about the appropriate response, which is now due in the autumn. Nevertheless, ‘Powering up Britain’ is very much a strategy comprising two overlapping parts: an Energy Security Plan and a Net Zero Growth Plan.

The pursuit of the twin goals of achieving net zero and greater energy security has been a preoccupation of the government in recent years. Chairing COP26 in 2021 prompted the Johnson government to clarify how it planned to reduce the UK’s carbon emissions while the Russian invasion of Ukraine in 2022 and the associated disruptions to energy markets pushed energy security concerns up the political agenda.

Given these and other earlier initiatives, many have questioned why there was a need for yet another statement of intent, particularly as so many of the measures highlighted in the new strategy have been flagged up in those earlier schemes (as the table below shows).

Perhaps ironically, given the emphasis on security at the launch of the initiative, the most pressing reason for government action was the need to comply with a High Court ruling to clarify how its net zero ambitions would be met.

The government had been criticised by its own Climate Change Committee for failing to specify how its goal would be delivered. In 2022, following legal action brought by environmental NGOs and lawyers, the High Court concurred. It ruled that the government needed to report to Parliament how it would meet its planned reductions in carbon emissions before the beginning of April 2023.

One of the many documents released to support the government’s strategy – and central to demonstrating its compliance with the High Court ruling – is a Carbon Budget Delivery Plan. The plan outlines in detail how the government will achieve emissions reductions on a policy-by-policy basis (over 300 measures are specified, of which nearly 200 are quantified).

As it turns out, the government’s projections fall short of meeting both its pledge to cut emissions by 2030 under the 2015 Paris Agreement, and its own binding ‘carbon budget’ for 2033-37. However, the shortfall is relatively modest, and the government is likely to have done enough to have prevented – or at least to be able to defend itself against – a further legal challenge.

While the government has been more explicit in demonstrating how it will move towards its objective of net zero emissions, there have been criticisms directed at how it balances this objective with its plans for energy security.

In many respects, achieving net zero is not at odds with achieving greater energy security: by definition, relying less on carbon-emitting energy should reduce dependence on such fuels whether from domestic or imported sources. Yet the government’s strategy envisages continued, if decreasing, reliance on fossil fuels throughout the coming decades. This is most clearly demonstrated by its support for the continued development of North Sea oil and gas and the expansion of liquefied natural gas import capacity.

The consumption of both oil and gas is projected to decline significantly through the deployment of renewables, nuclear and hydrogen on the supply side and increased take-up of technologies such as electric vehicles and heat pumps on the demand side. But the government’s continued commitment to a small but significant role for fossil fuels still seems at odds with its objective of decarbonising the economy.

The resolution of this contradiction relies upon the successful deployment of Carbon Capture Utilisation and Storage facilities, a technology which has yet to be successfully demonstrated at scale after decades of discussion.

Uncertainty prevails over other aspects of the government’s strategy as well – namely nuclear, renewables, and reducing energy demand.

The government reiterates its objective of significantly increasing nuclear capacity as part of its strategy – to 24 GW by 2050 (accounting for 25% of electricity needs). However, it is not clear how such an expansion – which is much higher than other projections of net zero have envisaged – will be achieved.  Most of the existing fleet of reactors will be retired this decade and only one, Hinkley Point C, is under construction. The government is committed to a further large-scale reactor, Sizewell C, but a final investment decision has yet to be made given difficulties in securing funding.

These difficulties reflect the problems which new nuclear projects (in the UK and elsewhere) have encountered over the last decade in terms of construction delays and cost overruns.

By contrast, renewable sources of electricity, the other principal component of the government’s strategy, have experienced significant cost reductions in recent years.  Here the uncertainty is less about its economic viability and more about whether the government is doing enough to encourage their timely deployment.

The strategy’s minimal engagement with on-shore wind has been particularly criticised. Although the government has subsequently launched a consultation on how to encourage such developments, there are concerns that the proposed changes will not be sufficient to overcome what is regarded as a de facto ban in England.

While the strategy restates the government’s goal of a 15% reduction in energy demand by 2030, there is very little indication of how this will be achieved.  A ‘Great British Insulation Scheme’, announced in the strategy, is so far limited to an additional £1billion to support improvements for 300,000 of the least energy efficient houses.

The relative neglect of energy efficiency in the government’s strategy is not new but is seen by many as a lost opportunity in achieving emission reductions, greater energy security and lower fuel bills.

Addressing these and other uncertainties will be pivotal to ensuring that the government delivers on its energy security and net zero ambitions.

By Francis Mcgowan, Senior Lecturer in Politics, University of Sussex.

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