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07-04-2022

British energy security strategy

The ‘British energy security strategy’ builds on the Prime Minister’s ‘Ten point plan for a green industrial revolution’, and the ‘Net zero strategy’.

This plan comes in light of rising global energy prices, provoked by surging demand after the pandemic as well as Russia’s invasion of Ukraine. This will be central to weaning Britain off expensive fossil fuels, which are subject to volatile gas prices set by international markets we are unable to control, and boosting our diverse sources of homegrown energy for greater energy security in the long-term.

Energy is the lifeblood of the global economy. From heating our homes to powering our factories, everything we do depends on a reliable flow of affordable energy.

So as the global economy reopened in the aftermath of the pandemic, the sudden surge in demand for everything from new cars to foreign holidays drove a massive spike in demand for oil and gas, dramatically increasing the price of these essential fuels.

This has been compounded by Russia’s abhorrent and illegal invasion of Ukraine. As we are part of a global market, the price we pay for gas is set internationally. And President Putin has used this against us by restricting the supply of Russian gas to the European market, further pushing up prices. The vital sanctions imposed by the UK and its allies to support the Ukrainian people will also inevitably have an adverse effect on all economies.

As a result of all these factors, European gas prices soared by more than 200% last year and coal prices increased by more than 100%. This record rise in global energy prices has led to an unavoidable increase in the cost of living in the UK, as we use gas both to generate electricity, and to heat the majority of our 28 million homes.

The government’s immediate priority has been to provide financial assistance to families and businesses struggling with higher energy bills. But when the UK is spending the equivalent of over £1,200 per person this year, just to service the national debt, we cannot afford merely to rely on taxpayer funding to assist with paying ever higher bills; we need to bring down the bills themselves.

The first step is to improve energy efficiency, reducing the amount of energy that households and businesses need. We have already saved households on the lowest incomes around £300 a year on bills through energy efficiency measures — and we are investing over £6 billion on decarbonising the nation’s homes and buildings. But the long-term solution is to address our underlying vulnerability to international oil and gas prices by reducing our dependence on imported oil and gas.

Even as we reduce imports, we will continue to need gas to heat our homes and oil to fill up our tanks for many years to come — so the cleanest and most secure way to do this is to source more of it domestically with a second lease of life for our North Sea. Net zero is a smooth transition, not an immediate extinction, for oil and gas.

Accelerating the transition away from oil and gas then depends critically on how quickly we can roll out new renewables. The government’s ‘Ten point plan for a green industrial revolution’, together with the ‘Net zero strategy’ and this Energy Strategy, is driving an unprecedented £100 billion of private sector investment by 2030 into new British industries including offshore wind and supporting around 480,000 clean jobs by the end of the decade.

The growing proportion of our electricity coming from renewables reduces our exposure to volatile fossil fuel markets. Indeed, without the renewables we are putting on the grid today, and the green levies that support them, energy bills would be higher than they are now. But now we need to be bolder in removing the red tape that holds back new clean energy developments and exploit the potential of all renewable technologies.

Most critically, when we have seen how quickly dependence on foreign energy can hurt British families and businesses, we need to build a British energy system that is much more self-sufficient. This requires power that can be relied on even when the sun is not shining, or the wind is not blowing. So this government will reverse decades of myopia, and make the big call to lead again in a technology the UK was the first to pioneer, by investing massively in nuclear power.

Investing in the North Sea, expanding our renewable capacity, and leading in nuclear power will also enable the UK to produce more hydrogen. We will seize this opportunity so that we are not wholly dependent on other countries for this vital superfuel which has vast potential applications - from industrial production to net zero aviation.

All of these steps will accelerate our progress towards net zero, which is fundamental to energy security. By 2030, 95% of British electricity could be low-carbon; and by 2035, we will have decarbonised our electricity system, subject to security of supply. This is a transition which reduces our dependence on imported oil and gas and delivers a radical long-term shift in our energy with cleaner, cheaper power, lower energy bills and thousands of high wage, high skilled new jobs.

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