What is the UK’s Energy Security Strategy – and will it help your business?

Published in April 2022, the Energy Security Strategy (ESS) sought to roadmap the UK’s path to a more secure, stable and predictable energy future. As the first of its kind in a decade, the strategy was unveiled to high industry expectations, yet was met with scrutiny. Industry experts responded to the plans with mixed reactions; some groups praised the targets, while others stated the plans did not provide enough support for households and businesses right now.

Following this, the Government then revised the strategy in March 2023 with new pledges designed to speed up the development of green hydrogen, nuclear and storage projects.

Here, we’re outlining what the UK’s Energy Security Strategy looks like in 2023, and how it could help businesses in the future if it outlasts the energy crisis and the UK’s next general election.

What is the Energy Security Strategy?

The Energy Security Strategy is a proposal intending to speed up the UK’s efforts towards a low-carbon, energy-independent future. In other words, it aims to expand the number of sources of home-grown, low-carbon energy in the UK over the next 20 years.

The strategy appeared in response to a range of energy-related concerns, chiefly the security, affordability and sustainability of the UK’s energy supply. These concerns have, of course, since been exacerbated by a range of global and national issues, including:

• Rising global wholesale gas prices
• The failure of 29 UK energy suppliers in 2022
• The rise of the energy price cap set by Ofgem

To address the above issues and speed up the UK’s energy independence, the ESS puts forward several key policies, including:

• Plans to further utilise North Sea reserves, which are located between the UK and Norway
• Commissioning a scientific review of shale gas extraction
• Plans to develop four new carbon capture, utilisation and storage clusters by 2030, including a £2bn carbon capture scheme in Selby
• A proposal for a 40% reduction in gas consumption by 2030
• Increased targets for low-carbon power generation
• Reduced consent times for offshore wind planning from four years to one
• A new delivery body for nuclear power (Great British Nuclear) to bring eight proposed new large nuclear reactors to final investment decisions by 2030
• A North Sea Transition Deal which sets out plans for necessary investment and infrastructure to aid ‘decarbonised’ oil and gas extraction

In addition, the 30 March 2023 saw the publication of a new Energy Security Plan - also called 'Powering Up Britain' - which builds upon the plans of the ESS, as follows:

• An extension of the ECO levy, which funds improvements to the energy efficiency of social and low-income homes
• A new £30m heat pump investment accelerator scheme
• An extension to the boiler upgrade scheme
• A list of the first government-backed renewable hydrogen projects
• An extra £10bn for UK Export Finance, with a focus on clean energy

How can the Energy Security Strategy help British businesses?

While its intentions focused on long term ambitions, the Energy Security Strategy came under fire somewhat for its perceived lack of measures that might have delivered short-term wins for businesses. Energy efficiency improvements, which a lot of campaigners noted as having the greatest potential for short-term benefits, were absent.

So, what positives can businesses take away from the Energy Security Strategy?

More clean energy

For one, measures to promote greater clean energy are sure to be welcomed. Top line takeaways from the strategy that businesses should take note of include:

• Acceleration of nuclear: By 2050, it’s hoped that the UK will have up to 24-gigawatt hours (GW) of nuclear energy, which will represent up to around 25% of projected electricity demand. Great British Nuclear, mentioned above, launched a £120 million Future Nuclear Enabling Fund in April 2022. Additionally, as of the week commencing 10 July 2023, Great British Nuclear was officially introduced, marking the beginning of the government body tasked with driving the delivery of these plans.
  
  
• Increase in offshore wind: The Government has committed to having up to 50GW of wind power by 2030, alongside an additional 5GW from floating offshore wind in deeper seas. They have also pledged to cut planning approval times for new offshore wind farms from four years to one year to meet this target.
  
  
• Consultations around onshore wind: The strategy notes that the Government will “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”.

Greater hydrogen production

There’s good news for energy-intensive industries, as the strategy intends to double the production of low-carbon hydrogen by up to 10GW by 2030, with at least half of this amount coming from green hydrogen.

Since much has been made of hydrogen as a key fuel to reduce the reliance on fossil fuels in many of the more energy-intensive industries, the announcement could well be a beneficial long-term solution.

A simpler approach to solar energy

The installation of solar is increasingly a way for businesses to generate their own renewable energy. It’s encouraging, then, that the strategy notes it will “radically simplify planning processes with a consultation on relevant permitted development rights and will consider the best way to make use of public sector rooftops”.

A final word on the UK’s Energy Security Strategy

Since the Energy Security Strategy was published in April 2022, much has changed for businesses and domestic energy users alike. The cost of energy has led to a notable shift in priorities for many, with businesses placing sustainability on the back burner to focus on continuity and cash flow management.

Only time will tell how successful the proposed Energy Security Strategy will be and in the meantime, the attention of businesses may be elsewhere. With that said though, the industry will continue to keep a watchful eye on how the UK Government delivers its Energy Security Strategy to ensure its ambitious commitments can be met.

At SEFE Energy, we’re doing all we can to help our customers and offer support through the energy crisis. For more help and advice, check out our dedicated support hub or contact us today.

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of SEFE Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. SEFE Energy accepts no liability for any errors, omissions or representations.