UK going ‘backwards’ – Government’s energy security strategy scores 3/10

The analysis found the Government is not on track to insulate the 450,000 homes it had committed to that would reduce energy waste and so the need to import foreign gas. Despite committing to holding auctions to agree new offshore wind farms annually, since the report it has only managed to secure two new offshore wind farms, and none at the last auction in 2023.

And while it has increased and extended the heat pump (Boiler Upgrade Scheme) grant, it has delayed the Clean Heat Market Mechanism which provides boiler manufacturers with heat pump sales targets. Heat pumps that run on electricity replacing boilers means the UK is less dependent on foreign gas imports and prices.

The plan acknowledged at the time that the “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” and also as the UK is “part of a global market, the price we pay for gas is set internationally”.

As per the plan’s commitment to more North Sea oil and gas, the Government is currently putting a Bill through Parliament to force the regulator, the North Sea Transition Authority, to hold auctions for new oil and gas drilling in the sea to be held annually, but the regulator itself has described the move as ‘unnecessary’ [2]. More North Sea gas is likely to have very little impact on the cost of gas given the price is largely set internationally.

Commenting on the analysis, Jess Ralston, Energy Analyst at the ECIU, said:

"The UK has had two energy security strategies within two years and we’re still going backwards, becoming more dependent on foreign imports. As a country we’ve spent more than £100bn on gas over the crisis with the bill payer and taxpayer bearing the brunt. [3]

“The Government’s Bill on oil and gas drilling has been described as ‘unnecessary’ by the regulator and will generate minimal more output. The cold truth is the North Sea is in ongoing decline so unless we shift away from gas we’ll have to rely increasingly on imports. We either make the switch to electric heat pumps powered by British renewables or stick with gas boilers running increasingly on foreign gas.

“The PM’s U-turning on insulation standards and heat pumps is leaving the UK less energy independent. And his Government’s policy failures in securing new offshore wind farms mean the UK could miss out on twenty-two times more homegrown electricity than could be generated by gas from new North Sea licences. If it genuinely wants greater energy security it’s prioritising the wrong things. [4]

“The Government has extended and increased the heat pump grant and sales are picking up, but its delaying other heat pump policy under intense lobbying from gas boiler manufacturers means we’re still lagging far behind other countries including the US and many in Europe. Heat pumps are one of the UK’s best weapons in the fight for energy independence.”

The Government has published two energy security plans in the past two years. Analysis found that since Powering Up Britain was published in March 2023 [5] Government policy failures on offshore wind mean the UK could miss out on 22x more homegrown electricity than could be generated by gas from new North Sea licences.

North Sea output continues to decline with recent media reports suggesting that the UK has become more dependent on energy imports in the past year as oil production fell to the lowest level since records began and gas output reached its second lowest level. Overall, industry figures show that ‘energy production has fallen by two-thirds since 2000, while demand has dropped by only a third – moving Britain from a net exporter of energy to a significant net importer’ [6]. Over 40% of the UK’s energy was imported in 2022, mainly from Norway and the US, and the UK spent £3.5bn importing electricity from Europe via interconnectors. [7]