What was in ‘Green Day’? How has the energy sector responded?
Energy and net zero secretary Grant Shapps outlined plans to boost the UK’s green revolution this morning, however nearly all the policy pledges had already been made by the government with little new money in the announced policies.
The plan – dubbed ‘Green Day’ in the run-up to the announcement – has been officially labelled ‘Powering Up Britain’.
Shapps said: “We have seen over the past year what can happen when global energy supplies are disrupted, and a tyrant like Putin uses energy as a weapon. Access to cheap, abundant and reliable energy provide the foundation stone of a thriving economy with our homes and businesses relying on it to deliver our future prosperity.
Measures include announcing the first projects for carbon capture usage and storage, following Chancellor Jeremy Hunt’s commitment for £20bn in CCUS funding.
CCUS projects in the track one stage for approval include two clusters: East Coast and HyNet, while a handful of hydrogen projects have also been given the green light with funding from the £240m Net Zero Hydrogen Fund.
There also commitments to spend £380m boosting EV charging points and infrastructure across the country to support the rollout of electric vehicles.
In terms of wind power, the government confirmed plans to spend £205m on the next round of offshore wind auctions and £160m boosting port infrastructure for floating offshore wind generation.
Shapps also unveiled The Great British Insulation Scheme – a rebranded ECO+ – which will upgrade 300,000 of the country’s least energy efficient homes.
However, these policies had previously been announced, and have either been just reaffirmed or rebranded by the government.
There was an additional £30m pledged towards heat pumps, with the Heat Pump Investment Accelerator project, to build on the pre-existing Boiler Upgrade Scheme which offers a £5,000 grant to anyone buying a heat pump.
The government also announced the launch of Great British Nuclear, nearly a year after it was first unveiled.
The industry vehicle will initially be led by Simon Bowen as interim Chair and Gwen Parry-Jones OBE as interim chief executive officer.
GBN’s first job to launch a new competition to select the best Small Modular Reactor technologies – one of the most advanced nuclear power technologies in the world – for development by autumn.
There were also commitments to speed up the planning process to attract investment – to enable the building of more energy infrastructure including solar power and offshore wind projects more quickly.
However, there was no commitment to further liberalise planning laws for onshore wind, which remains in a de-facto moratorium.
Industry criticises government energy plans
City PM outlined its own proposed green day policies, with the government achieving just one out of six recommendations made by the newspaper – which was to support SMRs.
Ultimately, there were no new funding or energy generation commitments to compete with the $368bn in subsidies pledged in the US Inflation Reduction Act or in the EU’s Green Deal Industrial Plan.
Chancellor Jeremy Hunt warned in The Times this morning that the government will not go “toe-to-toe with our friends and allies in some distortive global subsidy race.”
He said: “While no one doubts that the US government’s Inflation Reduction Act (IRA) is a significant intervention, it is not the starting pistol in the race for green tech. That race started decades ago in the UK, with the world now playing catch-up.”
He noted that just under 40 per cent of the UK’s power was generated from renewable sources last year, double that of the US.
Hunt told the Treasury Select Committee yesterday there could be further policy announcements in the autumn.
The chancellor said: “We will return to this and we’re doing a lot of very detailed work. I said in the budget that I would return in the autumn statement with a fuller response…I want the UK to remain competitive and I needed to see, which I wasn’t able to do at the budget, what the EU response was before we formulated our full national response.”
This was not enough to avoid stinging criticism from the industry over the lack of new policy announcements yesterday.
Ana Musat executive director of policy for Renewable UK – the wind and tidal industry body – said: “These announcements do not go far enough to attract the investment we need in the renewable energy sector – we need much bolder action to secure Britain’s clean energy future.
“Global competition for investment in renewable energy projects is fiercer than ever, and the UK risks falling behind and surrendering our global lead.”
Raman Bhatia, chief executive of Big Six supplier OVO Energy argued the UK “needs bold action if we are to avoid a repeat of this winter and tackle the climate crisis.”
He said: “Whilst we welcome expanding support for energy efficiency, the scale of the challenge needs to be met with much more ambition. We need to bring every home with us if we are to reach net zero, pulling every economic lever we have and making it pay to go green.”
Nigel Pocklington, chief executive of challenger supplier Good Energy feared “Shapps has had his head turned by the mythical beasts promising business as usual — CCS, hydrogen and small modular reactors.”
“The truth is today didn’t need to be rebranded from Green Day as the best way to deliver energy security is to say good riddance to fossil fuels and to focus on energy efficiency and rapid roll out of renewables — including onshore wind,” he argued.
Semih Oztreves, director of network infrastructure at clean energy player Zenobē, beleived there are some “beacons of hope in today’s plan to boost energy security and independence” but that “financing the sector is just one piece of the puzzle.”
“The real challenge is our outdated energy market design and the regulation governing the system, which were built for the fossil fuel era. In fact, there are regulations that actively discourage energy storage operators from putting assets in the best places for balancing the grid and preventing renewable energy wastage,” he said.