Industry

07 APR 2022

INDUSTRY RESPONDS POSITIVELY TO GOVERNMENT’S ENERGY STRATEGY

On the whole, senior industry leaders gave a fairly positive response to the government’s energy security strategy, announced today, with many highlighting the commitment to new nuclear, solar, hydrogen and offshore and onshore wind as key areas to be welcomed.

Here is some of the industry reaction to the new strategy received by Infrastructure Intelligence:

Sir John Armitt, chair of the National Infrastructure Commission, said: “The government should be credited with its scale of ambition to expand offshore wind and solar generation. The challenge is to take these stretching targets and turn them into delivery of cheaper electricity into people’s homes as quickly as possible. The steps on onshore wind are unlikely to unlock significant new capacity rapidly, while government’s aim to build more major nuclear plants will also take many years to realise.

“Alongside shifting supply away from fossil fuels, some of the quickest wins can be found in improving energy efficiency by better insulating our homes and public buildings to cut overall demand. The potential benefits are now bigger than ever, and we again call on government to set out a costed, long-term plan for meeting its own targets and help households make the right choices for their pocket and the planet.”

Chris Ball, managing director, nuclear and power EMEA at Atkins, said: “Strengthening security of supply means creating a resilient energy system, fuelled by a mix of low carbon technologies and renewable sources without dependence on any one fuel or region. The Energy Security Strategy unveiled by the UK government today will go some way towards achieving this in the medium to long term. 

“Accelerating momentum for UK nuclear and bringing forward reforms to fast-track offshore wind development are cornerstones of a plan to meet net zero targets and bolster our energy resilience. Boosting hydrogen production will help to swiftly establish the scale of its role as a low carbon fuel for industry and energy supply as well as its potential for storage to help balance the intermittency of renewables.”

Dawn James, vice president nuclear power at Jacobs, said: “The British Energy Security Strategy rightly identifies nuclear power as a key clean energy solution in the transition to a net zero carbon economy. Jacobs is a Lifetime Partner of EDF working to support the safe, reliable operation of the UK’s existing fleet of nuclear power stations and life extension of Sizewell B. We are working on Hinkley Point C, on the Rolls-Royce Small Modular Reactor, on Urenco’s U-Battery micro reactor and on nuclear fusion. 

“We believe that large scale reactors, small modular reactors and fusion power will play a crucial part in reducing our dependency on fossil fuels and we are working to ensure that the UK is at the forefront of developing them. We welcome the intention to progress the proposed Sizewell C nuclear power station at pace. It will produce enough electricity every year to avoid burning 5.4 billion cubic metres of gas. As well as providing the UK with security of supply, nuclear power has the lowest carbon footprint of any energy source, making it an important part of the mix of climate change solutions the world needs.”

Fiachra Ó Cléirigh, head of energy at WSP, said: “Renewable and low-carbon energy options available to mitigate climate change are diverse and at various stages of adoption and maturity. This strategy sets out a vision to accelerate both the energy transition and green jobs, with the vision of 95% of our electricity being low carbon by 2030. This plan to boost the UK’s energy security comes at absolutely the right time given the reality of rising global energy prices and ongoing volatility in international markets.

“We must dramatically reduce unabated fossil fuel consumption, scale-up renewables, encourage widespread electrification, and explore the different uses of hydrogen and other fuels, but no one solution will be a silver bullet. The focus on the role of nuclear energy in the government’s strategy could change the shape and timing of the energy transition significantly, providing flexibility in the pathway to net zero.  We welcome the government’s more ambitious target of 50GW of offshore wind by 2030 alongside the Holistic Network Design blueprint, to identify strategic infrastructure needed to deliver on this ambition.

“There will be a significant up-front cost associated with the infrastructure required for our energy transition, so we must focus on the lifetime environmental, social and economic value created by these investments. The government must create the conditions for the private sector to invest and deliver on a large-scale."

Jeff Woodward, global market sector leader and senior vice president, energy at AECOM, said: “At last, industry has a clear framework on which to focus investment and accelerate implementation. As we have seen with the current energy crisis, boosting the UK’s energy independence is vital for protecting our economy from future market shocks. It is therefore encouraging to see support for a mix of clean energy solutions in today’s much-anticipated Energy Security Strategy. 

“Scaling up offshore wind, which is relatively quick to get up and running, is welcome news and will play an important role in boosting renewable supply in the short term. The aim to double low carbon hydrogen production capacity by 2030 using excess offshore wind power is also a positive move. One of hydrogen’s most appealing qualities is its ability to act as a store for electricity production, which would fill gaps in renewable energy supply. Boosting its production is a significant signpost from government that it recognises the long-term value of green hydrogen. 

“Importantly, today’s energy measures should be coupled with a commitment to tackle energy efficiency. Improving energy efficiency across the UK’s building stock also has a critical role in delivering energy security and reaching net zero. The focus now must be on delivery and we cannot afford to lose momentum. Government will need to build confidence, establishing the right financial and operational climate to enable industry to step up and deliver.”

Stephen Marcos Jones, chief executive of the Association for Consultancy and Engineering, said: “Be it wind, solar, hydrogen or nuclear energy, our members are critical to the successful delivery of complex infrastructure projects. They stand ready to work in close partnership with government in the creation and design of a more secure, and less carbon intensive, domestic energy system.

“We welcome the investment in up to eight new nuclear plants alongside increased investments in offshore wind, solar and hydrogen – crucial if we are to enhance energy security and meet net zero targets in an affordable way for consumers. However, to help us on our net zero journey, we would have liked to have seen more to encourage the delivery of the cheapest forms of renewable energy, onshore wind and solar, as well as more on driving greater energy efficiency.

“We must not forget that it will take time for any new strategy to deliver results – for energy security, our net zero targets, or on affordability. Nevertheless, the strategy outlines a positive and proactive intent.”

Marie-Claude Hemming, director of operations for the Civil Engineering Contractors Association (CECA), said: “The plans announced by the UK government are only ambitious in that they rise to the challenge facing the nation in terms of energy security in a rapidly changing world. The changing geopolitical situation caused by Russia’s war against Ukraine underlines the need for the UK to be energy-secure, but this must only be done in the context of the imperative to achieve net zero and rise to the climate challenge.

“We are particularly glad to see that the government is placing a renewed emphasis on new nuclear power, with the creation of a new government body, Great British Nuclear, which will be set up immediately to bring forward new projects, backed by substantial funding, and the launch of the £120m Future Nuclear Enabling Fund later this month.”

Patricia Moore, UK managing director, Turner & Townsend, said: “Today’s energy strategy may be the successor to 2020’s ten-point plan but now COP26 is in the rear-view mirror, the war in Ukraine is impacting the cost, security and resilience of our energy supply.  So, the government has presented an ‘everything’ plan with all energy options back on the table.

“The balancing act for the Treasury is to provide new funding for essential infrastructure and energy efficiency programmes while delivering assistance to low-income households squeezed by rising energy prices. Just as households are closely looking at costs, so should our industry – and at where the funding will really come from.  Initiatives like new nuclear require huge investment that is only possible if there is sufficient commitment, clarity and certainty on the forward programme stretching way beyond single election cycles. 

“The challenge with an ‘everything’ plan is working out where to start – and critically how the funding and phasing will be organised for the pipeline of major projects that are being promised. Now we have the strategy, government and business must create an integrated, cross-industry programmatic approach with the right controls and oversight in place to deliver net zero infrastructure and investment in clean energy technology at pace and scale.”

Brian Berry, chief executive at the Federation of Master Builders, said: “The Energy Security Strategy completely misses the mark in tackling energy consumption in our homes. After the disappointment of the heat and buildings strategy this was an opportunity for government to implement a national retrofit strategy, focussing on improving the energy efficiency of the UK’s draughty and leaky homes. While the strategy does deliver 0% VAT on energy efficiency improvements to properties, a welcome move that the FMB has long been campaigning for, this only helps those with the money to pay in the first place. A broader, insulation led, retrofit strategy would have been an immediate solution to reduce energy consumption, boost the economy and importantly, help save homeowners money on their bills during a cost-of-living crises.”      

Mike Thompson, director of analysis at the Climate Change Committee (CCC), said: “The government has doubled down on its net zero strategy by accelerating plans to secure clean, green, UK-made energy. For perhaps the first time, the government has made commitments that clearly go beyond CCC proposals in key low-carbon technologies - offshore wind, nuclear, hydrogen. The new commitments are hugely ambitious – they would see the UK produce more electricity from offshore wind in 2030 than it has produced from gas in any year in history. Government, business and industry will need to focus relentlessly on delivery at a scale and pace as yet unseen.

“Recognising the difficulties in implementing effective policy quickly, it is still disappointing not to see more on energy efficiency and on supporting households to make changes that can cut their energy bills now. Government has reiterated its commitment to do more and we look forward to seeing details in the coming months.

“Today’s proposals focus on energy supply and would bring us closer to meeting the net zero challenge. To shore up the UK’s energy security, they must be delivered alongside other plans in the net zero strategy on how we use energy in our vehicles, our buildings and our industry. Energy security must also account for the changing climate. Adaptation will need more focus in the execution of today’s strategy than seen in its publication today.” 

Professor Joe Howe, chair of the North West Hydrogen Alliance and executive director, Energy Research Institute at the University of Chester, said: “The decision to rapidly ramp up hydrogen production, which will simultaneously cut carbon emissions and boost energy security, is one we strongly welcome. Accelerating delivery and use of low carbon hydrogen is essential, alongside electrification, to reach net zero. We would argue that the target could go a step further with 15GW possible by 2030.

“With HyNet, the north west of England is perfectly placed to make a significant contribution to this new national energy system. Set to be operational by 2025, it will produce around 4GW of continuous peak output of hydrogen – 40% of the government’s new national target by 2030. Coupled with carbon capture and storage, it will provide a low carbon, sustainable future use for natural gas in the coming decades.”

Myles Kitcher, executive director, Peel NRE – part of Peel L&P, said: “What today’s strategy recognises is that we can have secure and affordable energy while still meeting out net zero obligations. We welcome the acceleration of hydrogen, with a doubling of the production target by 2030. Here in the north west we’re well placed to help deliver on this ambition, with HyNet, but there are a raft of other hydrogen projects that can make a significant difference, such as the UK first plastic-to-hydrogen facility at Peel NRE’s Protos in Cheshire.  

“Reaching the government’s ambition for 95% of electricity being low carbon by 2030 is going to require a huge roll out of renewables. 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.”

Rebecca Weston, chief operating officer of Sellafield, said: “The government’s Energy Security Strategy commits to significant acceleration of nuclear investment, with ambition of up to 24GW by 2050 to come from nuclear power. The strategy sets plans to set up a new government body, Great British Nuclear and to bring forward new projects including large-scale new nuclear power plants and smaller scale SMR and AMR sites, using new technologies. A decision is also set to be taken this year on the location for a prototype nuclear fusion plant, a first-of-kind Spherical Tokamak for Energy Production (STEP) facility. The Moorside site in West Cumbria is one of the final five shortlisted locations.”

Jonathan Webb, senior research fellow at IPPR North, said: “This strategy does little for the more than a million northerners trapped in fuel poverty. What’s more, it could actively hamper the north’s efforts to drive the UK’s energy system towards a sustainable future in which communities are empowered to lead and feel the benefits of a ‘just transition’. 

“The north is a clean energy powerhouse, with over half of England’s renewable energy currently generated here. Now, more than ever, our region should be empowered to position itself as a global leader in clean energy generation. To do this, we need ambitious government support for significant quantities of renewable energy. This is our best bet for rapidly decarbonising the UK’s energy system and developing new fuels like hydrogen. So, while it’s positive to hear that government plans to set new targets for wind and solar energy, it shied away from doing the same for onshore wind, or from going further by actually giving communities the opportunity to obtain energy assets themselves, if they wish. 

“This is a strategy that requires urgent improvement. Northern leaders have already begun to develop ambitious plans to increase the north’s renewable energy generating potential. The government should back these plans to ensure the UK has a resilient energy system and that leaves nobody with the impossible decision between feeding their families and heating their homes. A windfall tax on oil and gas profits today could help people immediately, as well as allow for increased investment in renewable energy.”

Nigel Aitchison, co-head of infrastructure at Foresight Group, said: “Today’s announcement and in particular plans for accelerating key infrastructure sectors such as wind and hydrogen, reflects the UK government’s commitment to taking a leading role in climate change mitigation and an understanding in the contribution that renewables can make in reducing energy costs and promoting domestic energy security. Recent events, compounding pressure on supply chains, have also highlighted the need for society to value our planet’s scarce resources more carefully.  At Foresight, we believe this will mean an increased appreciation of the ‘natural capital’ value inherent in well-managed forests, soil and oceans, as well as an increasing focus on the importance of recycling.  We have been investing in the energy transition for over 15 years and, as it accelerates like never before, we will continue to support the development of all aspects of a sustainable economy in the power system and beyond.”

Stuart Murphy, founder of tidal range energy generation system TPGen24, said: “The government’s continued reluctance to support tidal energy generation to any meaningful scale, whether range or stream, was reinforced in its new energy strategy, which seemed to mention a commitment to almost every other resource. Even worse, they’re considering reopening North Sea gas fields as well as opening the door to controversial fracking. When we’re trying to reduce our dependency on fossil fuels, this seems like a huge step backwards. 

“Further, there was no mention of achieving baseload, sustainably, which should be the central objective of this strategy. In my, and a growing number of policymakers’, view, tidal is the only resource with the potential to deliver this scenario, complementing existing and future wind and solar. Once again, we’ve seen our government confronted by a serious challenge, only to panic and take the superficially easy route, which will cost us all dear in the long run. I hope that, as the tidal lobby grows louder, our leaders start to take a longer-term view on energy security.”  

Michael Burns, energy partner at law firm Ashurst, said: “This is a welcome plan from the government to recognise the reality of real-time shifting geopolitics. It seeks to strike a balance between being practical but also facilitating an accelerated transition to lower carbon energy production. What will be key is to have the right technologies, at the right price and, importantly, sufficient supply of the right skill sets in the labour market, to execute on it.  It may take time to see its full effect, but it is a sensible way forward in the context of the changes we are seeing in the world today.”

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