By Charlie Wilson
Investing in new fossil fuel infrastructure is ‘moral and economic madness’.
António Guterres, UN Secretary General
The UK government claims that its new energy strategy will provide cleaner and more affordable energy this decade. It won’t.
Boris Johnson says that the crisis in Ukraine means that we have to give ourselves a ‘climate pass’. But we don’t get one of those. We either fix the crisis, or the crisis fixes us.
Given that they note that ‘Prices of renewables have been consistently decreasing, with the price of offshore wind dramatically falling by around 65% since 2015, onshore wind prices down 50% since 2013, and residential roof top solar panels are now less than 50% the price they were a decade ago’ you might assume that they would go hell for leather in that direction. Instead, they propose to advance and retreat at the same time.
They say they ‘will accelerate the deployment of wind, new nuclear, solar and hydrogen, whilst supporting the production of domestic oil and gas’ (our emphasis); a ‘press all the buttons at once’ approach. Except, some of them are the wrong buttons, and some of the right ones are barely being hit.
- They are going for exploring new oil and gas fields, with a new licensing round for new North Sea oil and gas projects to launch in Autumn, with ‘bespoke support to new developments’. Somehow, they’ve not noticed that these can’t go into production if we are to have any chance of staying under a 1.5C increase. The same applies to having another geological survey to try to fix the science to allow fracking. This diverts investment that should be going into renewables. New oil and gas fields would normally take until 2050 to come on stream using current procedures, but the FT has noted that the companies engaging in these projects are smaller than the energy majors and likely to get production started much quicker; presumably by cutting corners. What price Health and Safety and security from Deepwater Horizon type incidents if they move as recklessly fast as the FT projects? Disasters beckon. None of this will reduce energy bills right now, and their profitability relative to renewables is declining so sharply that it is likely to be in negative territory before they come on stream; unless they are subsidised. So, more emissions, higher prices. The opposite of what the government says it is aiming for.
- Insulation is virtually absent. All we have is a reduction in VAT on insulation materials and solar panel installation until 2027. So, those who can afford the upfront cost can have a small subsidy. This won’t do anything to address fuel poverty, as the people who need it won’t be able to afford to invest and are usually renting anyway. It won’t reduce carbon emissions on any scale because, as we have seen in the last decade, a ‘consumer demand led’ model produces tiny impacts. We need a national plan, rolled out through local authorities, using direct labour, properly trained with a link to FE colleges targeted to do whole areas at once to get economies of scale, cut costs and maximise impacts. The £6.6 billion scheduled ‘to improve energy efficiency and decarbonise heating over this parliament’ has not been increased in this ‘emergency’ and will not be enough to upgrade the half a million homes the government has targeted, let alone the 19 million homes that need it.
- They have trumpeted ‘a significant acceleration of nuclear, with an ambition of up to 24GW by 2050’ (around 25% of projected electricity demand). This will be organised by a new quango, the bombastically named Great British Nuclear, with their eyes on sites in Wylfa on Anglesey. But the Small Modular Reactors (SMRs) that are supposed to be the core of this drive are at prototype stage and Rolls Royce don’t envisage getting any built until 2029 at the earliest: and this is ‘subject to technology readiness from industry’. The slippages in timescale and escalation in cost of nuclear projects are notorious. This also applies to the target of building one large reactor a year. The current Hinckley C and Sizewell C projects are projected to have a combined capacity of 6GW. Hinckley should come on stream in 2026, three years late. So, this won’t generate electricity in the immediate term. Nuclear power is already more expensive than renewables, and will be ruinously so in the long term. So, double fail there too. The consensus on ‘new nuclear’ between the government, Labour and the majority of unions at the TUC, but the lengthy time scale involved, will make this a race between implementation and unravelling economic viability. Of course, no one wants a waste storage facility anywhere near them, especially Tory shire areas – darling, think of the house prices – and that radioactive can is likely to be kicked further down the road.
- More positively, the aim of 50GW of Offshore wind by 2030 is up from the previous 40GW target and the current 10.4GW capacity. It includes up to 5GW from floating offshore wind in deeper seas. Planning reforms will cut the approval times for new offshore wind farms from 4 years to 1 year.
- This is the least they could do, as their approach to onshore wind is a massive missed opportunity. ‘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’ (our emphasis) is a token gesture; as this is the cheapest form of energy currently available, and quick to erect. Once on site, a turbine can be built and running in a day. And every one that goes up reduces fuel bills and emissions from day 1. Current UK capacity is 14GW and this could grow much more sharply than the government is prepared to contemplate. There are 649 sites ready to go but blocked by planning procedures put in place by the Conservatives in 2013. 85% of people (and 85% of Conservative voters) support them. There is something staggeringly perverse about this and, as energy bills rise even further, support for expanding onshore wind at scale and speed will grow.
- A Heat Pump Investment Accelerator Competition in 2022 worth up to £30 million ‘to make British heat pumps’, is a token gesture if they want to install 600,000 a year by the end of the decade.
- The UK’s current 14GW of solar capacity ‘could’ grow up to 5 times by 2035 to 70GW. But just ‘consulting’ on the rules for solar projects for domestic and commercial rooftops, is likely to follow the same model as that for insulation; giving incentives to those who can afford it, not having a plan or an appropriate level of investment to reduce fuel poverty; and therefore, unable to realise that fivefold increase.
- The ‘ambition’ for ‘up to’ 10GW of hydrogen production capacity by 2030, envisages ‘at least half coming from green hydrogen…utilising excess offshore wind power’ So, ‘up to’ half will be produced using methods that create more CO2 emissions than natural gas does.
- There is no support for Tidal Power.
So,
- none of this will make a dent in energy bills in even the medium term.
- The nuclear element will actually increase them in the longer term.
- Continued investment in fossil fuels will not reduce bills but will increase carbon emissions.
- The failure to tax the energy companies allows them to make the investment decisions based on pursuit of profits not social and ecological imperatives.
- The failure to make enough of a dash for wind and solar, or start the systematic insulation of homes and public buildings, and invest in the skills and jobs needed to do it, means that bills and carbon emissions will be higher and time is slipping away.
The sheer bone headed perversity of this in the context of rapidly growing poverty and a climate that is visibly getting edgy makes campaigns for a windfall tax (at the permanent 56% rate used by Norway) increasing onshore wind, insulation and against new fossil fuel sites both possible and imperative, while putting the argument against nuclear as any kind of solution. This argument is winnable. The NEU is the latest – and largest – union to come out against new nuclear at its conference this week.
The notion on the right – both in government and parts of the opposition – that people will patriotically put up with fuel poverty because ‘these are Putin’s price rises’ is wishful thinking on their part. Governments that preside over sharp falls in living standards tend to get voted out.