Nuclear and renewables to spearhead UK energy security

A new body, Great British Nuclear, will drive up to eight new reactor projects and the UK will ramp up offshore wind developments

The UK Government has today committed to accelerating nuclear and renewables investment under its Energy Security Strategy.

A new government body, Great British Nuclear, will be set up immediately to bring forward new projects, backed by a £120mn Future Nuclear Enabling Fund which launches this month. The UK will target 24GW of nuclear power generation by 2050, representing around 25% of projected electricity demand. 

Subject to technology readiness from industry, Small Modular Reactors will form a key part of an eight-reactor nuclear project pipeline.

The Advanced Nuclear Fund  includes up to £210mn announced in November 2021 for Rolls-Royce to develop the design for one of the world’s first Small Modular Reactors, although they are unlikely to be ready until the early 2030s.

The Wylfa site in Anglesey (pictured), where work on the plant has been suspended since January 2019, is among the main sites set to be revived (click here to read the back story).

Currently Hinkley Point C in Somerset is the only new build underway, although its first reactor won't come online until June 2026, while the government remains in "constructive negotiations" on the Sizewell C project in Suffolk. SMRs have power output roughly a fifth to a third of the larger and more traditional reactors such as Hinkley Point C. 

Business and Energy Secretary, Kwasi Kwarteng, said we have seen record high gas prices around the world and the UK needs to protect itself from price spikes in the future by accelerating cleaner, cheaper, home-grown energy.

"The simple truth is that the more cheap, clean power we generate within our borders, the less exposed we will be to eye watering fossil fuel prices set by global markets we can’t control," he said. "Scaling up cheap renewables and new nuclear, while maximising North Sea production, is the best and only way to ensure our energy independence over the coming years."

The Energy Security Strategy's plans also include:

Solar energy

The UK will look to increase its current 14GW of solar capacity by up to five times by 2035, capitalising on domestic and commercial rooftop potential.

Offshore wind

A new ambition of up to 50GW generated by offshore wind by 2030 – more than enough to power every home in the UK – with up to 5GW from floating offshore wind in deeper seas. This will be underpinned by new planning reforms to cut the approval times for new offshore wind farms from 4 years to 1 year and an overall streamlining which will radically reduce the time it takes for new projects to reach construction stages while improving the environment.

Onshore wind

The UK Government will 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. The principal challenge is likely to be securing planning permission at local council level.

Green hydrogen

The UK aims to double its low carbon hydrogen production capacity to 10GW by 2030, with at least half coming from green hydrogen and utilising excess offshore wind power to bring down costs.

Oil and gas

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 – recognising the importance of these fuels to the transition and to our energy security, and that producing gas in the UK has a lower carbon footprint than imported from abroad. The government is under pressure to increase oil and gas supplies following Russia's invasion of Ukraine but fossil fuel investment is becoming increasingly hard to reconcile, particularly following this week's IPCC report (click here).

Heat pump manufacturing 

A  £30mn Heat Pump Investment Accelerator Competition will be held in 2022, to make British heat pumps, which will reduce gas demand.

Industry reaction to UK Energy Security Strategy

Jo Lappin, Chief Executive of Cumbria LEP, said it was excellent to see nuclear take centre stage in the Government’s strategy when it comes to the UK’s energy future.

“Cumbria and the North West is uniquely placed to make a low carbon future a reality," she said. "We have the skilled workforce and pioneering spirit that established the region as the UK’s centre for nuclear excellence. With a key decision on where to locate the STEP nuclear fusion facility to be made this year, Moorside is the clear choice. We were the first for fission, and we’re well-qualified to be the first for fusion. We’re ready to work as a partner to Government and the new Great British Nuclear to deliver on these promising nuclear commitments.”

Ged Barlow, Chief Executive of Net Zero North West, said its members are facing a collective energy bill of up to £1bn in 2022 – a projected increase of around 65% since 2020. The current challenges only serve to highlight why we need an integrated and resilient net zero energy strategy in the UK, which will help to protect us against pressures such as increasing energy prices while enabling the transition to net zero, he said.

“Today’s strategy recognises the role that natural gas will continue to play and that producing it in the UK has a lower carbon footprint than imported from abroad," he said.

He said it had previously called for more ambitious hydrogen targets, so welcome the Government’s plans to double hydrogen production.

"However we need the correct pricing policy to support it," he said. "We also welcome the commitment to more nuclear, however alongside fission and small modular reactors, we also need to lay the foundations for nuclear fusion including prototype sites such as Moorside, Cumbria in the North West. 

"The commitment to more jobs is also welcome although more detail is needed on how we create the skills to deliver on this ambition and ensure these opportunities are kept in the UK.”

Salah Mahdy, Global Director of Renewable Hydrogen at Howden, welcomed the UK government's strategy and role of hydrogen production to the energy transition and broader energy security.

"This is a significant step in the right direction toward developing a leading hydrogen economy in the UK. It conveys an important message to the market and shows a further commitment from the government to protect the next generations by creating the low carbon future the world needs," he said.

“Doubling the hydrogen production targets will attract more investment to this market, will create more new jobs, strengthen the economy in the long term, and eventually it would mean that the potential huge economic benefits of the hydrogen industry are kept in the UK.

“It’s also important that when increasing targets, the infrastructure in place can accommodate the larger capacities required. Having the right equipment in place, like Howden’s compression solutions, is key to supporting this growth.”

Steve Scrimshaw, VP at Siemens Energy UK & Ireland, said today’s UK Energy Strategy highlights the need for low carbon, homegrown energy supplies for two essential reasons; firstly to increase our energy independence and security, and secondly, because it is crucial we accelerate towards net-zero.

"This week’s IPCC report gave a clear statement that all countries must move faster on delivering the energy transition to net zero," he said. "It’s clear that renewables in the form of nuclear, hydrogen and wind are the crucial for the UK’s energy future. To meet our 2035 targets and make the change we need clear investment and action now. This is a move in the right direction, but we need understand more about the practical steps to bring this ambitious strategy to life."

Concerns that every energy option 'will take many years to develop'

Richard Smith, partner at Sandstone Law, said it is an "understatement" to say that there is high level of anticipation over the content of the Government’s energy strategy statement, and it is long overdue. 

He said the focus on offshore wind makes sense but it isn't a panacea; nuclear power stations take decades to build and remain controversial; and hydrogen may be a 'game changer' one day but it is a very long way from becoming a commonplace solution. 

"New oil and gas exploration licences in the North Sea are inevitable and this will be impossible to reconcile with the IPCC's clarion call for urgent reductions in fossil fuels over the next eight years," he said. 

"Every option will take many years to develop. It will certainly involve more reliance on technology that does not yet exist. Hopefully we will see a change of approach with implementation at the heart of the new strategy, rather than just more broad policies that gaze decades into the future; we need some reassurance now.”

Professor John Underhill, Director of the University of Aberdeen’s Centre of Energy Transition, said arguably it is the first time in decades that there has been a deep appreciation of where and from whom we get energy from, the role oil and gas plays in the UK energy mix, and how we move towards a low-carbon energy future. 

“It presents a holistic approach governed by the need for secure, affordable, ethical, environmentally sustainable, and low-carbon energy supplies," he said.

“At the same time, it recognises the role oil and gas currently plays, and the need to wean ourselves off that dependency by deploying renewable and decarbonising technologies like carbon storage at scale and at pace.

"The new strategy will go a long way to reassuring communities in Aberdeen and the north-east that there is a renewed commitment to jobs associated with the oil and gas industry and to developing new ones linked to the growth of renewable technologies to ensure a just transition, as set out a year ago in the North Sea Transition Deal.”

Although the strategy includes a commitment to a new North Sea licensing round in the autumn, any gas and oil production that follows from an exploration licensing round is years away and so is not a short-term solution for the UK’s gas supplies.

“Whilst the strategy paints a long-term picture, in the short term there may be a need to develop existing gas discoveries in the North Sea and West Shetlands and re-purposing depleted gas fields in the Southern North Sea as new sites for gas storage," he said. 

“These options also carry a lower carbon footprint than imports, are proven technologies, have lower environmental impact and are cheaper allow existing infrastructure to be used.”

Eduardo Monteiro, Co-CIO of Victory Hill Capital Advisors, said while he appreciates the Government’s ambitions to tackle soaring energy prices with its new strategy, this unfortunately misses the mark.

"As ever, we continue to see misplaced trust in nuclear energy and an overdependence on intermittent power in the wider push to net zero," he said. 

“The Government’s focus on nuclear is hugely problematic. The strategy reaffirms a broader assumption that nuclear is not harmful. While nuclear does not emit CO2 at point of energy generation, it is far from green with regards to the extraction and disposal of its fuel source, and likewise in the materials used in construction of plants."

He said we must be more innovative and instead of nuclear, distributed generation through Microgrids and Behind the Meter solutions using existing renewable technologies such as solar, wind and batteries should be prioritised.

"Other technologies including carbon capture and storage should also be supported. These can all provide reliable energy and can reduce energy bills in scale and crucially be delivered in far shorter time horizons that than the 10 years needed to build a nuclear power plant," he said.

“Wind and renewables can and must play a part in the net zero transition but we must recognise their shortcomings in terms of intermittency. The UK’s energy strategy needs a lot more innovation and joined up thinking to achieve net zero and cheap energy in the near term.”

Luke Fletcher, Director at climate change investment and advisory firm Pollination, also picked up on the timings. He said while the long-awaited energy strategy proposes a number of solutions that support the UK’s net zero transition, the Government has "fundamentally misunderstood" the immediate climate challenge through a focus on solutions that will take years to implement and even longer to deliver tangible impact.

“The government needs to refocus on options that can be deployed now," he said.

"At a time when all solutions need to be on the table, the current proposal rests on the acceleration of nuclear whilst omitting some of the easiest, fastest and cheapest alternatives. The strategy fails to detail demand-side opportunities, including energy efficiency and home insulation measures. There is clear public support for more renewable power to help guarantee the UK’s energy security, but more guidance will be needed on exactly what this will look like."

He said another major absence from the strategy is onshore wind and it's clear the government is "kicking these vital solutions down the road" by developing partnerships with a limited number of communities.

"Such vague commitments come in spite of recent research from the European Climate Foundation which found that a decisive near 70% of people in the UK would support new onshore wind projects near where they live," he added.

"Delaying the implementation of onshore wind solutions is another nail in the coffin of the climate crisis and the lack of urgency demonstrated simply highlights a lack of understanding of the challenges and risks we face.”

Not enough on energy efficiency and courting innovation at local level

Jonathan Maxwell, CEO and founder of Sustainable Development Capital (SDCL), was surprised to learn that the Government is not doing more to drive energy efficiency.

“The International Energy Agency has already pointed to energy efficiency measures in buildings and industry as a way of reducing reliance on Russian gas, but it often gets less attention than it deserves. This must change," he said.

Most people will be shocked to learn that we waste two-thirds of the world’s energy, he said. Energy efficiency measures can be introduced rapidly to deliver immediate benefits. This is a real advantage now, and especially when renewable and nuclear energy sources can take years to develop.

“Furthermore, energy efficiency measures quickly pay for themselves in terms of the cost savings they deliver, and then go on to produce further savings. There is an investment case, an environmental case and a national security case for putting energy efficiency at the heart of Government energy policy," he said. 

“We have the opportunity to create a better system, so that when clean energy at scale does arrive, it’s not wasted. Energy efficiency is one of the best, fastest and cheapest ways of improving energy security.”

Myles Kitcher, Executive Director, Peel NRE, which is developing the UK's first plastic-to-hydrogen facility at Peel NRE's Protos in Cheshire, said today’s strategy recognises that we can have secure and affordable energy while still meeting net zero obligations. 

“We need the right policy climate to support these ambitions and allow innovation at a local level," he said. "At Protos we’ve developed a blueprint for clustering together different low carbon energy technologies and creating a circular economy. This includes plans for a local CO2 network with carbon capture and storage inevitably going to be a critical part of our transition to net zero," he said.

Reaching the Government’s ambition for 95% of electricity being low carbon by 2030 is going to require a huge roll out of renewables, he added.

"We would have liked to see a firmer commitment to the role that onshore wind can play and a removal of the current moratorium as well as recognising the huge potential of solar farms. These are the projects that will deliver in the short term, before new nuclear and offshore wind come online.”

Jonathan Chapman, UK Managing Director, Burns & McDonnell, said the strategy was a "symbolic step forward" and welcomed the proposals to collaborate with developers and the supply chain to accelerate procurement timelines by increasing pipeline certainty and visibility, as well as finding further savings in the manufacture and construction phases where possible. 

"Throughout this transition, as the UK aims to meet decarbonisation goals and sustain reliable generation no matter the conditions, various technologies for dispatchable generation will come to the fore. Battery storage, reciprocating engines and gas turbines with black start capabilities can support wind and solar generation dips, especially in the face of unpredictable weather patterns and rising electricity demand as a result of new technologies such as electric vehicles," he said.

"Whatever the technology or approach that assists the transition from fossil fuels to increased wind and solar energy, it is essential that utilities and industry come together to plan for the integration of such solutions. Reliability cannot be sacrificed along the way. For overall resilience, the system operators should assess their critical loads and, at minimum, develop detailed plans to meet those critical loads."

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