5 things you need to know about the UK’s new energy strategy

The UK government has unveiled details of its new energy strategy, outlining how Britain will boost domestic production in a bid to reduce reliance on Russian gas exports and move towards cleaner energy.

The strategy is a response to soaring oil and gas prices worldwide, exacerbated by the war in Ukraine.

This month, millions of UK households were hit by huge increases in energy costs as the price cap was removed, passing on the higher costs of energy to consumers.

Boris Johnson said the “bold” new strategy outlined the country’s plans to “scale up and accelerate affordable, clean and secure energy made in Britain, for Britain”, with a full version to be published imminently.

But environmental and climate groups disagree. They have labelled the strategy a failure because it includes no measures for reducing energy demand and insulating homes.

So what do we know about the strategy so far, and how will it affect you? Read on for all you need to know.

Nuclear

Nuclear power is undoubtedly the star of the show in this new strategy, with plans to ramp up capacity to 24GW by 2050.

This would represent around 25 per cent of total electricity demand by 2050 – up from 16 per cent currently.

To achieve this, the government says it will pursue small modular reactor technology as well as setting up a new government body – Great British Nuclear – to bring forward new projects.

This month the government will launch a £120 million “Future Nuclear Enabling Fund” to kickstart several projects, including a site in Anglesey. The government says this could mean delivering up to one reactor a year over the next eight years.

This is perhaps the most controversial part of the energy strategy, with ongoing plans for expansion of nuclear power in Suffolk having faced local opposition for several years, and a number of environmental and climate campaigners against nuclear power as a solution to the climate crisis.

Friends of the Earth energy campaigner, Danny Gross, said nuclear power is “not the solution”.

“New nuclear power stations would take well over a decade to build and they’re expensive, hazardous and produce waste that will remain highly radioactive for thousands of years,” he said.

“We have been here before, with eight nuclear sites announced in 2010. Over a decade on, the only one under construction is seriously behind schedule and over budget, with a price far above current renewables.”

Wind and solar 

If the UK’s terrible weather is good for one thing, it’s clean energy.

In recent years, Britain has been ramping up its capacity for wind power, with offshore wind projects previously given the green light to increase capacity from 11GW to 40GW.

The new strategy has now raised that ambition, with aims to reach a capacity of 50GW by 2030.

Onshore wind is a different story, however. Currently, projects can be vetoed with just a single objection during the planning stages, and some ministers had hoped the new energy strategy would remove this caveat to increase the capacity of onshore wind. 

Onshore wind projects have broad public support, according to polling. A recent poll from 38 degrees found 83 per cent of respondents backed more onshore windfarms in general, while 76 per cent supported expansion even if in their own area.

In spite of this, top ministers have poured cold water on the idea of more onshore wind in recent weeks, with transport secretary Grant Shapps calling onshore windfarms “an eyesore”.

This negative view of onshore expansion has been reflected in very low ambitions in the energy strategy. The government says it will only 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”.

Lisa Fischer, programme lead at think tank E3G criticised the government as “weak” for failing to back onshore wind expansion.

“Failing to back onshore wind despite it being cheapest is succumbing to backbench pressure at the expense of Britain’s communities and consumers,” she said.

Solar power has also been factored into the energy strategy, with an ambition to increase the UK’s current 14GW of solar capacity by up to five times by 2035.

Fossil fuels 

This week, MP Jacob Rees-Mogg sparked controversy after suggesting the energy crisis could be tackled by extracting “every last drop” of oil from the North Sea.

Experts and climate scientists have repeatedly warned countries around the world must move away from fossil fuels to avoid climate catastrophe, yet the energy strategy has outlined plans for a fresh round of oil and gas licensing in the North Sea this year.

“A licensing round for new North Sea oil and gas projects planned to launch in Autumn, with a new taskforce providing bespoke support to new developments,” the strategy reads.

The government says oil and gas will play a role in the transition away from fossil fuels in “the nearer term”.

The potential for fracking projects to be reinstated has also caused controversy in recent weeks, with business secretary Kwasi Kwarteng ordering a scientific review into the impact of fracking this week.

Fracking was banned in 2019 amid strong opposition from environmental groups and concerns over earthquake tremors.

Hydrogen

Alongside nuclear, wind and solar, the government will also be looking to hydrogen as a route out of energy dependence on Russia.

The new energy strategy announced a doubling of ambition on hydrogen, with an aim of producing up to 10GW by 2030.

At least half of this will come from “green hydrogen”, the government says, which is hydrogen produced using renewable energy or other low-carbon methods.

Home insulation

For decades, experts and environmental groups alike have been pointing to the obvious solution to both fuel poverty and the climate crisis: insulating Britain’s leaky homes.

Britain has some of the worst-insulated and least energy efficient housing stock in Europe, meaning more heat is required to heat up homes and keep them at a stable temperature.

Delay on upgrading homes has already cost the government and ordinary people dearly, with the coalition government’s scrapping of “green crap” efficiency measures estimated to have cost £8.3bn. That’s £150 extra on every household’s energy bills today.

And despite the furore over Insulate Britain protests last year, polling from YouGov also shows that 84 per cent of the public support energy efficiency measures as a way to wean the country off of Russian gas supplies.

Given the circumstances, you might expect energy efficiency and insulation measures to be a central feature of the energy strategy – but the Treasury reportedly blocked a current scheme which provides funding for insulation and energy efficiency measures in households. 

Reports say Number 10 and business ministers had called for an expansion of the Energy Company Obligation (ECO) scheme which provides efficiency and insulation measures to some households in receipt of benefits. 

The scheme is funded via a levy added to energy bills. 

Reports suggest this was rejected by Rishi Sunak in order to abide by existing spending agreements.

Analysis from the Energy and Climate Intelligent Unit (ECIU) shows this package could have allowed 22,500 households a year to benefit from insulation upgrades. This could have saved these households up to £600 a year on energy costs.

Last month, the chancellor announced homeowners installing energy efficiency materials such as solar panels, heat pumps or insulation would not have to pay VAT, but many campaigners panned this policy as ineffective.

Sepi Golzari-Munro, deputy director at ECIUsaid: “Soaring gas prices are responsible for adding at least £500 to energy bills, forcing another 2.5million households into fuel poverty. Without help to insulate their homes to bring down gas bills there may be little prospect they can afford to keep their homes warm.”

Luke Murphy of think tank the Institute for Public Policy Research said the strategy was a “recipe for failure”.

“The choices the government appears to have made will see consumers pay more, leave the UK less secure, and expose us all to a greater risk from climate change, than if different choices had been made,” he said.