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The British Energy Security Strategy: key takeaways

Amie Jones Policy Adviser – Decarbonisation

Learn about the government’s response to soaring energy prices and the need to build a resilient future energy system

03 May 2022, 4 min read

As the world continues to grapple with soaring energy costs, ensuring security of energy has become a key priority for many governments,  including the UK. In response, on 7 April,  the Government set out its own ambition for a secure, low carbon energy system in the British Energy Security Strategy.  Given the urgency of the current situation, businesses were looking for a tangible step change from ambitious targets to detailed delivery plans that would help to address both the short term pressures whilst investing in the medium to long term net zero transition.

What we saw in the strategy

  1. Bold ambition across several key technologies. Firstly, offshore wind ambition increased to 50GW by 2030, with floating wind ambition increased to 5GW. Secondly, low carbon hydrogen production targets increased to 10GW by 2030, with at least 5GW coming from electrolytic hydrogen. Thirdly, nuclear energy target targets set at 24GW by 2050, with Government aiming to see two more projects reach Final Investment Decision during the next Parliament.
  2. Acceleration in the transition of the North Sea. Whilst recognising the continued role for North Sea oil and gas, with the North Sea Transition Authority planning a leasing round in the autumn, Government set out its ambition to accelerate the decarbonisation of offshore operations and support the deployment of hydrogen and CCUS.
  3. Recognition of the need to cut timescales for planning and consents and promote anticipatory grid investment. Government recognised the requirement to streamline and accelerate environmental consents for offshore wind, whilst also detailing plans for a Strategy & Policy Statement for Ofgem to set out the importance of strategic network investment and a comprehensive Review of Electricity Market Arrangements (REMA) in Great Britain.
  4. Extension of current support schemes for EII’s. Government outlined plans to extend the Energy Intensive Industries Compensation Scheme for a further 3 years at a subsidy intensity of up to 75%, subject to available funding, and the intention to increase the aid intensity to up to 100% with a consultation to follow.

What was missing?

  1. Missed opportunities for key technologies. The strategy was a chance for Government to rewrite the trajectory for onshore wind and set out plans for long-duration energy storage. However, there was little further detail on accelerating storage, which is equally essential to developing future resilience. Meanwhile for onshore wind the government stepped back from substantive changes to planning regulations, instead proposing to consult local communities who wish to host new projects.
  2. Detailed delivery plans for all low carbon technologies. Despite bolder ambitions, businesses still require detailed delivery plans in order to unlock investment at scale and speed. However, this must also be matched by a commitment to planning reform and rapid approvals to get projects quickly off the ground.
  3. Business support for high energy costs. In the our Spring Statement submission, the CBI called for a support package with cash flow support for businesses through the extension of the Recovery Loan Scheme, and targeted measures for EII’s – the strategy failed to deliver these.
  4. Further support for demand side energy efficiency. The Government continues to fall short on delivering the Conservative manifesto and Spending Review 2021 commitments in energy efficiency by failing to close the public-private investment gap in energy efficiency measures for households and businesses.

Next steps

The CBI will work with businesses on the delivery of the British Energy Security strategy, highlighting the key role of the private sector in driving the energy transition and the need for government to address key barriers to unlocking investment.

With continued uncertainty surrounding the future of wholesale energy prices, the CBI will also continue to call for the acceleration of energy efficiency measures and the need for business support, particularly for energy intensive industries that underpin critical supply chains.

For more information, or to get involved in the CBI’s work on delivering the Strategy, contact Amie Jones.