Energy strategy will do little to alleviate soaring bills now, minister admits

Ministers have admitted the much-delayed energy strategy will do little to help alleviate soaring fuel bills now, as they outlined plans to boost nuclear, wind, solar and hydrogen.

The strategy is being published as western countries wrestle with high prices and how to reduce reliance on Russian oil and gas, and in the face of calls to end the fossil fuel era to tackle dangerous climate change.

A fleet of new nuclear power plants is at the heart of the strategy, with Boris Johnson claiming “nuclear is coming home” and suggesting a new reactor will be built every year, in a social media video to promote the plan.

But critics have warned that a failure to focus on making homes more energy efficient, and little evidence of a reversal of Tory opposition to cheap onshore wind, means the strategy will not help families struggling with energy bills for the coming winters.

When pressed on the impact the strategy will have now on energy bills, Business Secretary Kwasi Kwarteng told Sky News: “You are right to say that the strategy is more of a medium term, three, four or five-year answer, but that doesn’t mean that we can’t address this.

“It’s really important that we get an energy strategy, an energy policy, that means we can have more security and independence in the years ahead.”

In an interview on BBC Radio 4’s Today programme, Mr Kwarteng denied the Treasury had vetoed his plan to subsidise household insulation to reduce energy demand – seen as the quickest way to curb bills and shift away from imported gas.

The Prime Minister said the strategy would reduce the UK’s dependence on foreign sources of energy, and make supplies “cleaner, more affordable and more secure”.

Ending dependence on foreign oil and gas would make supply more secure, he said, with a shift to British fossil fuels during the transition to cleaner forms of energy.

That would involve “capturing their emissions and storing them safely under the sea”, he said – but carbon capture projects have been promised by successive governments without any real progress.

And he said the Government would bring bills down by “upgrading homes so they use less energy”.

The strategy includes an aim to make 95% of electricity low carbon by 2030, with a goal to produce up to 50 gigawatts (GW) of offshore wind energy by 2030, which officials said would be more than enough to power every home in the UK.

Some 5GW should come from floating offshore wind in deeper seas and planning reforms will slash approval times for new wind farms from four years to one year.

When it comes to onshore wind the Government said it would be “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”.

A new body, Great British Nuclear, will be launched to bolster the UK’s nuclear capacity with the hope of up to 24GW of electricity by 2050 coming from the source of power – 25% of the projected electricity demand.

It is hoped the focus on nuclear will deliver up to eight reactors, equivalent to one reactor a year instead of one a decade,

And the plan also confirms the intention to push ahead with a nuclear project at the Wylfa site on Anglesey, off the north-west coast of Wales.

There is also an aim to double its goal of low carbon hydrogen production to 10GW by 2030, with at least half of that coming from “green” hydrogen – produced from renewable electricity rather than natural gas.

A new licensing round for new North Sea oil and gas projects is planned for the autumn to cover the “nearer term”, despite a UN report this week which called for rapid and substantial cuts to fossil fuel use to avoid dangerous warming.

As the Government pushed nuclear power as a key part of the answer to energy security, the managing director of the first scheduled new plant in 30 years warned they typically took 20 years to develop and build.

Stuart Crooks told BBC Radio 4’s Today programme that Hinkley Point C was forecast to be finished in 2026 “but like every other industry we’re in the middle of this energy crisis,” and the project has also been hit by the impacts of Covid.

The Government has also this week commissioned a review into the science around fracking, which could pave the way to lifting the moratorium on the controversial process, imposed over the tremors it caused.

A £30m competition to manufacture heat pumps is also to be launched, and there are ambitions to increase solar capacity with a consultation on the rules for solar projects.

It is thought a major crunch point in the strategy, and one of the reasons its launch has been delayed, is wrangling over onshore wind farms.

Several ministers, along with a number of Tory MPs, have aired views backing the development of new oil and gas, but not onshore wind, which is one of the cheapest forms of electricity and enjoys the support of around 80% of the public.

Ed Miliband, Labour’s shadow climate change and net zero secretary, accused Mr Johnson of having “completely caved to his own backbenchers and now, ludicrously, his own energy strategy has failed on the sprint we needed on onshore wind and solar – the cheapest, cleanest forms of homegrown power”.

He added: “This relaunch will do nothing for the millions of families now facing an energy bills crisis.”

Liberal Democrat leader Sir Ed Davey said the plans were “utterly hopeless”.

Michael Grubb, professor of energy and climate change at University College London and one of the authors of the UN report, said that by ignoring energy efficiency and kicking onshore wind into the long grass “it most certainly won’t help families struggling with energy bills for the coming winters”.