A debate has been scheduled in Westminster Hall for 9.30am on Wednesday 7 December on government support for marine renewables. The debate will be opened by Alistair Carmichael MP.
British Energy Security Strategy
On 7 April 2022, the UK Government published its British Energy Security Strategy. The strategy proposes to accelerate the UK towards a low-carbon, energy independent future.
Concerns over the UK’s energy supply
The strategy was published in response to concern over the security, affordability, and sustainability of the UK’s energy supply. This concern is caused by both global and local issues, including spikes in global wholesale gas prices, the impact of the Russian invasion of Ukraine, the recent failure of several UK energy suppliers, and the rise in the energy price cap as set by the electricity and gas regulator Ofgem.
What policies are in the strategy?
The strategy focuses on expanding domestic UK energy supply alongside commitments to completely remove Russian oil and coal imports by the end of 2022, and Russian gas “as soon as possible thereafter”. The policies include:
- plans to further utilise North Sea reserves
- commissioning a scientific review of shale gas extraction
- plans to develop four new carbon capture, utilisation, and storage clusters by 2030
- a proposal for over 40% reduction in gas consumption by 2030
- increased targets for low-carbon power generation compared to previous targets in the Energy White Paper
- reduced consent times for offshore wind planning from four years to one
- a new delivery body for nuclear power (Great British Nuclear) to bring the proposed eight new large nuclear reactors to final investment decisions by 2030; and
- a North Sea Transition Deal setting out plans for necessary investment and infrastructure to aid ‘decarbonised’ oil and gas extraction.
Further details of how the Government proposes to implement the strategy will be included in The Energy Security Bill announced in the Queen’s Speech 2022.
Reaction to the British Energy Security Strategy
Reaction to the strategy has been mixed. A Government press release featured widespread industry support for the targets from several sectors. For example, state involvement in nuclear development was welcomed by the Nuclear Industry Association. The Climate Change Committee’s (CCC) initial response credited the “hugely ambitious” strategy for going beyond some of its own recommendations in The Sixth Carbon Budget.
However the CCC’s recent progress report to Parliament highlighted that policy gaps remain to meet net zero. It added that while the strategy’s supply-side ambitions were “broadly appropriate”, actions related to demand-side were “limited and could have gone further”. There is also a perceived “limited focus” on energy efficiency measures. Several organisations, such as E.ON and the Energy Savings Trust have called for more to be done.
More broadly, the Institute for Government (IfG) said the security of the UK’s physical energy supply will “likely hold up” following possible Russian gas export disruptions to the EU. This is even without measures from the strategy, due to diversity of supply.
The debate’s sponsor, Mick Whitley MP, wishes to highlight community energy as one area that could help address some of the UK’s energy challenges.
Community energy refers to energy projects that are wholly or partially owned and controlled by local communities. The projects can include generation (usually renewable or low carbon), or demand reduction (such as energy efficiency).
One initiative to support community energy that has been raised in Parliament in the past is the Local Electricity Bill. This was introduced as a Private Member’s Bill in both the 2017-2019 and 2019-2021 sessions, but in both cases did not complete its progress. The Bill sought to support community groups that wanted to sell the electricity they generated to local consumers.
Ofgem, the electricity and gas regulator, is responsible for regulating energy suppliers and ensuring they meet Energy Supply Licences. Currently, licensed suppliers are subject to a duty to supply and must offer terms to any domestic consumer that requests them. This means that suppliers must offer to supply energy to customers nationwide.
While there are some specific exemptions for geography-limited supply licences, the Bill’s proponents believed this was not enough to encourage community energy groups to sell locally. The Bill sought to change the Electricity Act so that Ofgem could grant ‘local electricity supply licenses’ to local generators and set the designated area where these licenses would apply. This would have been after consultation with relevant stakeholders such as the local authority.
More information on community energy, and the Local Electricity Bill, is available in the Library debate pack on Empowering Community Energy Schemes.
Further reading on Government energy strategies
The British Energy Security Strategy is the latest in several recent Government strategies on energy, including the Net Zero Strategy (October 2021), the Energy White Paper (December 2020) and sector specific plans such as the UK hydrogen Strategy (August 2021) and the Smart Systems and Flexibility Plan (July 2021).
More information on the strategy, energy policy in general and the causes of recent energy price rises is available in:
- The Library Insight, Where will Britain’s future energy supply come from?
- The Library briefings on Energy Policy: an overview and Domestic energy prices
This Library briefing gives an overview of how the profits from North Sea oil and gas production are taxed, and how the fiscal regime has been reformed in recent years.
Household energy bills increased by 54% in April 2022 and were due to increase by a further 80% in October. The new Energy Price Guarantee will limit the October increase to 27%, with a further increase of 20% in April 2023.