Innovate UK KTN's response to the Energy Security Strategy

The strategy sets out the Government’s plan to ensure the UK has a secure, clean and affordable energy system for the long term. The strategy described how the Government will incentivise and fund the changes that need to be made to move away from our dependency on fossil fuels to a truly Net Zero carbon future.

Highlights

The highlights of the strategy are listed below. These targets are positive steps that need to be made by 2030 so we welcome the scale of ambition from the Government and look forward to further announcements on capital investment support to drive this forward.

Government says: 95% of the UK’s electricity supply will be generated from low carbon sources by 2030, with 25% of our electricity demand being met by nuclear including small modular reactors.

We say: These targets are to be applauded; however, achieving 25% of the UK’s power supply from nuclear by 2030 will be a challenge with the majority of existing nuclear sites being decommissioned in the same period.

Government says: 50GW of offshore wind will be installed by 2030.

We say: We welcome plans to streamline the planning process from 4 years to 1 year to accelerate deployment, whilst protecting the needs of the environment.

Government says: We will scale up to 10GW of hydrogen production by 2030 with 50% of the hydrogen produced being electrolytic or ‘green’ hydrogen.

We say: We support the move from 5GW to the new 10GW target which shows a real commitment to the hydrogen sector in the UK. To find out more about future possibilities in this area, sign up for our briefing event about the forthcoming Net Zero Hydrogen Fund (9.30am, Tue 26th April).

Government says: We will providing £30m for heat pump manufacturing sites to be established in the UK to support the supply chain needed for the Boiler Upgrade Scheme.

We say: This is a positive step towards decarbonising heating in homes in the UK. We hope that support for low carbon domestic heating will continue throughout the decade.

Areas on which to build

Whilst setting a strong foundation the strategy needs strengthening in the areas listed below. This needs to happen at pace to avoid counteracting the good work being proposed in the highlights above.

The strategy commits to Continue making UK homes more comfortable and cheaper to run. Every therm of gas saved grows our energy security and brings jobs to the UK.

Our response: The strategy mentions the importance of domestic energy efficiency but there is a lack of detail on how the Government intends to support the average family home in this respect. Whilst we agree with the need to scale up UK manufacturing of heat pumps, and welcome the Boiler Upgrade Scheme supporting homeowners to install heat pumps, there is a major gap in support for the ‘fabric first’ approach that was mentioned in the Heat and Buildings Strategy. The energy efficiency scheme that is provided to low-income families should be extended to all UK homes, especially as the criteria for receiving the Boiler Upgrade grant is dependent on loft and wall insulation being in place, with no outstanding recommendations on the EPC.  If homeowners need to complete energy efficiency measures and aren’t supported by the Government to do so this may have a detrimental impact on the uptake of the Boiler Upgrade Scheme too.

Another issue that hasn’t been addressed by the Strategy is the need for substantial training to increase the number of MSC accredited heat pumps installers in the UK, to ensure we have the resources to meet demand for heat pump installations, and that standards of installation are maintained.

The strategy says Gas is currently the glue that holds our electricity system together and it will be an important transition fuel.

Our response: Whilst we agree that the UK will be reliant on natural gas for near term energy security and to ensure the scaling up of CCS enabled hydrogen production, issuing new licenses for oil and gas fields in the North Sea sends the wrong message to energy investors. Acknowledging the current energy crisis and global uncertainty, we question the need for new, long term, gas reserves to be produced.

Finally, the strategy talks about how Accelerating our domestic supply of clean and affordable electricity also requires accelerating the connecting network infrastructure to support it.

Our response: Overall, the ambition to achieve 95% generation of electricity from low carbon sources by 2030, and the intention to accelerate the network infrastructure required to support it, is encouraging. However, while recognising that the Ofgem Strategic Innovation Fund will contribute significantly to the development of enabling technologies and services, the strategy lacks the detail on how Ofgem will expedite its approvals process to build networks in anticipation of major new sources of generation and demand. We look forward to reading the forthcoming Strategy and Policy Statement for Ofgem.