Crucial gaps remain for the UK’s path to energy independence and net zero
Rishi Sunak wants his government to focus on delivery. Yesterday, it delivered thousands of pages of documents and policies that have been missing in action for months.
Strong progress has been made in some critical areas, including carbon capture, electric cars, and small modular reactors. But gaps remain for the United Kingdom’s pathway to energy independence and net zero.
Promisingly, this government understands that energy security and net zero are “two sides of the same coin”. Britain is reliant on fossil fuels for most of its heat and transport fuel and almost half of its power, but we have no real choice to buy oil and gas off volatile international markets. This exposes all of us, as Vladimir Putin knew.
Our future economic growth is dependent on remaining competitive in the net zero age
The government also gets that a massive arms race for clean technologies is now underway. Those countries which excel in capturing carbon, fueling the aviation revolution, or producing the materials that modern life is built upon, will be richer and more secure in the coming decades. As a result, our future economic growth is dependent on remaining competitive in the net zero age.
But it’s not just about economic growth and getting rich through saving the planet. We are witnessing the return of geo-economic statecraft. Some commentators think that net zero simply means swapping Russian oil and gas for Chinese lithium and rare earths. But the reality is that China has been beating us at industrial strategy for decades across the board. And these critical minerals are crucial for much more beyond wind turbines, solar panels and electric vehicles.
Thankfully, this is another challenge the government has grasped. The Energy Security Plan includes cooperation with Kazakhstan on critical minerals, following the Foreign Secretary’s visit last month. This builds on a lot of progress made over the past year, including new partnerships with the United States, Vietnam, South Africa, and Canada. Next, the government should consider securing suppliers of last resort for rare earth minerals in conjunction with our allies to hasten diversification of supply chains away from China.
The Chancellor has also announced we will compete in the race to net zero in the “British way”, by leveraging billions in private capital. This is absolutely the right approach: we cannot outgun the United States, European Union or China in subsidies. To achieve this, he must maximise capital allowances for long-life assets which contribute to our energy independence, and make them permanent – rather than just the existing three years.
But while it’s important to remember the international context these crucial documents are being published in, we should not forget the opportunities for British citizens. Getting British homes insulated and off gas boilers, for instance, is vital to our energy security given our dependence on gas imports – but it also cuts fuel poverty and shields households from the volatile gas market.
The government has suggested it will focus on electrification for heat, backed up with lots of new policies for heat pumps such as the boiler upgrade scheme extension to 2028 and a target of 1.9 million installations per year by 2035. Heat pumps are a better alternative to gas than hydrogen, which continues to struggle with safety trials.
The next step is rethinking hydrogen for heat altogether, which the Climate Change Committee has identified as an energy security risk. And while the development of a clean hydrogen economy is vital, plans to place a new green levy on bill payers to pay for it would be politically risky and unfair. The government should seek other ways to support development.
Energy and climate wonks will be pouring over these documents for weeks. The devil will be in the detail and judgment will be reserved for how much of it is actually delivered. But despite wranglings over framings and some crucial gaps still persisting, it is absolutely clear that the government at least understands the reality of energy security policy in the 2020s: go green or go home.
Jack Richardson, head of energy and climate at Onward
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