THE AUGURIES were poor. For several days before the British government released its energy-security strategy, cabinet ministers blew hot and cold on the subject of onshore wind turbines. The Treasury was reported to have turned down ministerial requests for more money to pay for home insulation. It looked alarmingly as though the government did not actually have an energy strategy.
When the document appeared, on April 7th, all doubt was dispelled. It is now plain that the government does not have a proper energy strategy. Instead it has a collection of preferences and hopes, which reveal more about how Boris Johnson’s government goes about its business than about the future of energy in Britain.
To be charitable, Britain is trying to do something enormously difficult. The spur to the new energy strategy is the Russian invasion of Ukraine, which has reminded politicians of the undesirability of relying on autocratic fuel exporters. But as well as becoming more self-sufficient, Britain must reach zero net greenhouse-gas emissions by the year 2050. That entails decarbonising electricity generation while producing far more of it. Most homes will have to be heated by electric heat pumps rather than gas; and cars must be powered by batteries rather than oil. At the same time Britain must try to make energy cheaper. A sharp rise in wholesale gas prices is now feeding through into household fuel bills, causing terrifying increases in the cost of living.
In short, as Mr Johnson puts it, “we need a flow of energy that is affordable, clean and above all secure…a power supply that’s made in Britain, for Britain.” That confident, we-can-do-it tone suffuses the entire document. Britain, it boasts, will become “the Saudi Arabia of wind power”. The government will “reverse decades of myopia” and make “the big call” on nuclear power. And did you know that Britain’s power distribution lines, if laid end-to-end, would stretch 20 times around the world?
The document is Johnsonian not only in its bombast, but also in its reliance on targets and vaguer “ambitions”, many of them reassuringly far in the future. The government’s ambition is that Britain will have 50 gigawatts of offshore wind capacity by 2030—almost five times as much as today. Its aim is to have up to eight more nuclear reactors, and up to 24GW of deployed nuclear power by 2050. It expects that some of the new ones will be small modular reactors, a new technology being developed by Rolls-Royce. Its ambition for low-carbon hydrogen production by 2030 is twice as high as it was before.
In contrast to its excitement about these three technologies, the strategy downplays energy efficiency. Instead of a bold plan to improve Britain’s leaky homes, the government envisages “a gradual transition following the grain of behaviour” involving little state spending. When it comes to onshore wind, the bombast abruptly vanishes. “The government recognises the range of views on onshore wind,” it says. Rather than alter planning rules to make it easier to build turbines, it will hold a consultation about entering into partnerships with “a limited number of supportive communities” that might be interested in hosting wind farms in exchange for something, such as lower bills.
These choices have puzzled and disappointed greens, who argue that suppressing demand through energy-efficiency measures and building wind turbines on land are among the cheapest, quickest ways of cutting greenhouse-gas emissions. But the big problem is not that Britain will end up spending more money and cutting emissions more slowly than it needs to. Rather, by favouring expensive and sometimes untried technologies it is setting itself up to do not much at all. Nuclear power stations are expensive and slow to build, and under the “regulated asset base” model that the government favours, many of the costs will be loaded onto customers’ bills years before they begin operating. It would take a brave prime minister to approve many of them, when the time comes. Michael Grubb, an energy expert at University College London, thinks the government might sign off on one new project, probably the 3.2GW Sizewell C in Suffolk, but not 24GW worth.
The government has put forward one good idea. It announced this week that it will create a new independent body, the Future System Operator, to help manage the energy system and advise on strategy. That is sorely needed. Britain’s power mix has already changed dramatically (see chart) and will continue to alter as ever more wind and solar farms are connected to the grid. Hydrogen will add further opportunities and complexities.
The rapid rise in solar and wind power, though welcome, has been tricky to accommodate in an electricity system that was designed for fossil fuels. Because wind and solar power are intermittent, they force many other generators to operate intermittently, raising their costs. And Britain’s wholesale electricity market operates on the “merit order” principle, under which all active generators receive the price paid to the most expensive generator required to meet demand at a particular time. That generally means all power—even solar and wind, which has a marginal generation cost close to zero—is priced like gas power.
Energy experts such as Mr Grubb and Sir Dieter Helm of Oxford University have pointed out these problems (and others) for years. Successive governments have tended to ignore them. The energy strategy suggests that Mr Johnson’s administration is not capable of thinking realistically about the future. Perhaps the Future System Operator will be able to do some of the thinking for it.