Utility Week

8 | MAY 2022 | UTILITY WEEK Energy Analysis Energy strategy misses small steps in favour of giant leaps The government's Energy Security Strategy contained some bold new targets on nuclear and offshore wind but critics argue it does little to address immediate concerns. David Blackman asks experts how the strategy measures up. A pril 7 2022 provided a fleeting glimpse of the UK's low-carbon generation future. As the country was buffeted by strong winds, while bathing in spring sunshine, the contribution of solar and wind power to the generation mix climbed to 53% at lunchtime. It was also the day the government unveiled the British Energy Security Strat- egy, which is designed to wean the UK off dependence on gas generation, an issue brought into such sharp focus by Russia's invasion of Ukraine. The strategy has made big bets on off- shore wind, nuclear and solar. One of "the best things" about the strat- egy is that the government hasn't given up on net zero, says Josh Buckland, a former special adviser within government on energy issues. The months running up to the strate- gy's publication had seen mounting political pressure on the government to water down its 2050 target. Mike Thompson, director of analysis at the Climate Change Committee (CCC), points out that ministers have not only "stuck to their guns on net zero", but have gone beyond on his own body's advice on targets for nuclear and wind power. The flip-side, though, is that the strategy has stopped short of an anticipated dou- bling of onshore wind capacity, while largely ignoring energy efficiency. Daniel Newport, head of net zero at the Tony Blair Institute and until recently the government's head of heat and buildings strategy, believes that despite the ambition in some areas, the strategy isn't an adequate response to the scale of the looming energy security crisis faced by the UK. He says: "This isn't a reaction to the cri- sis that prompted the promise of an energy security strategy, which was supposed to help consumers in one of the worst price crises we have ever faced. It doesn't do any of these things, partly because policy deci- sions are to back big, expensive, risky steps as opposed to quick wins." So how does the government's strategy measure up? Nuclear The big winner from last month's announce- ment is nuclear power. Ašer decades of false starts, prime minister Boris Johnson has committed to building eight new nuclear power plants by 2050. These mega-plants will be supplemented by small modular reactors, which are claimed to be cheaper to build and can be deployed in more places across the country. Adam Bell, the Department for Business, Energy & Industrial Strategy's (BEIS's) for- mer head of energy strategy, hails the devel- opment as a "revolutionary" day for nuclear developers, providing them with a pipeline stretching over several decades. The government's ambitious headline 24GW target, together with steps like the establishment of a dedicated new delivery body, will help to kickstart projects at the very early stage of the development process, says Buckland "The sense of drive and ambition matters when investors are making decisions. The ambition is much clearer than it has been for a decade," he says, while adding the caveat that the strategy's nuclear section lacks suf- ficient detail on delivery. While the strategy supplies some of the building blocks for getting nuclear projects off the ground, delivering the prime minis- ter's ambitions will mean keeping the Treas- ury on board, says Howard. Another big problem with nuclear power remains the shortage of reliable suppliers able to deliver what are ošen technically complex and hugely expensive projects. The government is clearly keen to encour- age developers, like Hitachi, which withdrew from the North Wales Wylfa project ašer baulking at the financial risks. Recently passed legislation to allow the regulated asset base (RAB) model to finance nuclear projects may help here too, Bell says: "It might be enough to tempt Hitachi back in – but for a while it will just be Westinghouse and EDF in the game." Pointing out that the market capitalisa- tion of the French company is not much more than the projected cost of delivering Hin- kley Point C alone, Howard says: "You can't expect EDF to shoulder all of this itself." With just the Somerset plant likely to be delivered this decade and Sizewell in the 2030s, Bell reckons that "three or four" new large nuclear plants are a more realistic ambition than the PM's eight. The Tony Blair Institute's Newport sees the far-off nature of the government's targets as a "distraction" from the more pressing energy security issues that the strategy was meant to address. While building 24GW by 2050 may be a valuable contribution in the long term, he describes it as "irrelevant to the problems we are seeking to solve. "Nobody will hold you accountable for whether are delivering because it's 10 to 20 years hence. Choosing nuclear is choosing the thing that you can't be held accountable for." Offshore wind The second major winner from the security strategy was offshore wind as the govern- ment added another 10GW on to its already ambitious target to deliver 40GW. Kwasi Kwarteng insisted that the raised target is "stretching but doable" in an

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