British Energy Security Strategy published with accelerated clean energy targets

The government published the British Energy Security Strategy on 6 April 2022, setting out how Great Britain will accelerate the deployment of wind, new nuclear, solar and hydrogen while supporting domestic oil and gas production in the nearer term¹. The strategy was published by the Department for Business, Energy and Industrial Strategy with the Prime Minister's Office, Great British Nuclear, the Scottish Office and the Welsh Office¹.

On nuclear, the strategy sets an ambition of up to 24GW by 2050, which it says would represent up to around 25 per cent of projected electricity demand, and could mean delivering up to 8 reactors, equivalent to one reactor a year instead of one a decade¹. A new government body, Great British Nuclear, will be set up immediately to bring forward new projects, and the £120 million Future Nuclear Enabling Fund was to launch in April¹. The strategy names the Wylfa site in Anglesey among projects to be progressed this decade¹. On offshore wind the ambition is up to 50GW by 2030, including up to 5GW from floating offshore wind, with planning reforms to cut approval times for new offshore wind farms from 4 years to 1 year¹. Solar capacity, currently 14GW, could grow up to five times by 2035, with a consultation on the rules for solar projects, particularly on domestic and commercial rooftops¹. Low carbon hydrogen production capacity is to be doubled to up to 10GW by 2030, with at least half from green hydrogen¹.

For households, the strategy confirms a temporary VAT cut on the installation of energy efficiency projects such as solar panels, insulation and heat pumps, in place for five years to 2027¹. The National Insulation Association estimates this will save families £200 off the cost of installation and reduce the cost of insulation, double glazing, solar panels and heat pumps³. A Heat Pump Investment Accelerator Competition worth up to £30 million will run in 2022 to make British heat pumps¹. The £450 million Boiler Upgrade Scheme was launched in April, and the £240 million Net Zero Hydrogen Fund later the same month². The Warm Home Discount will increase to £150 in October and extend its coverage to assist three million people, alongside a £200 reduction in energy bills from October for all households in Great Britain through the Energy Bills Support Scheme². The strategy also sets a 2035 date by which the government intends to phase out the sale of new and replacement gas boilers, and states it plans to blend up to 20 per cent hydrogen into the natural gas grid, with a final decision by the end of the following year².

"We're setting out bold plans to scale up and accelerate affordable, clean and secure energy made in Britain, for Britain, from new nuclear to offshore wind, in the decade ahead."

The Resolution Foundation said the strategy focused on supply-side measures and offered "minimal progress on lower cost onshore wind and solar", and that there are "few supply-side measures that can make a material difference to household energy costs this year"⁴. It said the policy package announced in February only covers half of April's price cap increase, with some estimates suggesting the price cap could rise to more than £2,500⁴. It also said nearly half (49 per cent) of the poorest fifth of households live in homes with uninsulated walls, and that the additional cost of heating a typical home with uninsulated cavity walls is set to near £200 in winter 2022, with a penalty of close to £400 for uninsulated solid walls⁴. The strategy states that consumer bills will be lower this decade than they otherwise would be as a result of the measures taken¹.

Why it matters for households

The strategy's headline numbers are mostly about generation built over the coming decade, so they do not change a household's bill or its energy independence in the near term. The measures that touch homes directly are the VAT cut on installing insulation, solar panels and heat pumps, the Boiler Upgrade Scheme, the Heat Pump Investment Accelerator Competition and the October bill support¹. The government has said it will consult on rebalancing costs placed on energy bills away from electricity, with proposals to be published in 2022, considering overall system impacts and limiting the impact on bills, particularly for low-income consumers³. The strategy also states an intention to phase out the sale of new and replacement gas boilers by 2035². For homes on gas, the strategy's hydrogen plans include a possible blend of up to 20 per cent hydrogen into the natural gas grid, with a final decision not yet taken². The Resolution Foundation notes that the strategy did not commit new taxpayer funds and that much progress towards net zero to date has been underpinned by levies on household bills, which it says account for £153 of the typical dual fuel bill of £1,971⁴.

What happens next

The strategy lists dated steps: the £120 million Future Nuclear Enabling Fund in April, the £240 million Net Zero Hydrogen Fund later in April, the first UK-Qatar Strategic Energy Dialogue in May, a comprehensive Energy Advice Service on GOV.UK by summer, a licensing round for new North Sea oil and gas projects in the autumn, and a final decision on hydrogen blending in the gas grid by the end of the following year¹. The government also said it would consult on partnerships with a limited number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills¹.

Sources4 cited

1. Major acceleration of homegrown power in Britain’s plan for greater energy independence - GOV.UK, gov.uk
2. British Energy Security Strategy, data.parliament.uk
3. British Energy Security Strategy - National Insulation Association, nia-uk.org
4. Low energy • Resolution Foundation, resolutionfoundation.org