Year on from Government’s energy security strategy, UK less energy secure – analysis

Despite claiming “energy security is one of this government’s greatest priorities” in the policy document, analysis of policy progress since the publication finds the UK is now on a path to greater energy insecurity.

Mishandling of the UK’s offshore wind auctions means that the UK could miss out on 150TWh of homegrown electricity by 2030, which is 22x times the amount that could be produced from extra gas under the Government’s push for new North Sea licences. Replacing this lost wind generation with gas power would drive up gas imports by 300TWh over six years.

The Government failed to secure new offshore wind farms at its last auction, leaving the UK more dependent on gas imports for power stations. Previous ECIU analysis has found that due to outdated Treasury rules, the next auction is likely to secure many fewer new wind farms that it could have. [3]

Implementation of the Government’s zero emission vehicle (ZEV) mandate will mean lower oil imports with more EVs running off UK-generated electricity in the coming years, but the delay to the phase-out of new petrol and diesel cars announced by the Prime Minister will have the opposite effect, keeping oil and petrol imports higher. This contributed to a fall in sales projections of 2.8million battery electric vehicles (BEVs) by 2030, such that drivers face importing 65TWh more fuel by 2030 than if BEV sales had followed higher projections from before the policy change.

The Government’s home energy efficiency schemes have not been delivering the number of home upgrades they had planned for. The Government also scrapped its own Energy Efficiency Taskforce which had ambitions to reduce total UK energy demand by 15% by 2030. [4] Lower energy demand means less need for imports.

The Government also recently delayed its Clean Heat Market Mechanism policy [5] which is designed to speed the deployment of home electric heat pumps that can run on British renewable energy instead of gas that will increasingly be imported from abroad.

Dr Simon Cran-McGreehin, Head of Analysis at ECIU, said: “The Government’s oil and gas drilling bill going through parliament is essentially political theatre with the regulator stating it is ‘unnecessary’ while also being clear that output from the North Sea is in ongoing, inevitable decline. Yet where the Government could have made a real difference to the UK’s energy security, by boosting British offshore wind, it’s failed to make any progress.

“To its credit the Government’s zero emission vehicle mandate policy means cars will increasingly run on British electricity rather than foreign oil imports, but the PM’s delay to the phase-out of new petrol cars will have the opposite effect and has sent the wrong signals to the market.

“Heat pumps can be powered by British renewable electricity whereas boilers will increasingly run off imported foreign gas, but here again the Government has recently delayed its policy following intense lobbying by the gas boiler manufacturers.

“The Government’s talk is of the North Sea and energy security, while the reality is the difference offshore wind could make to the UK’s energy independence is an order of magnitude larger than any new drilling. On wind it’s failed and so is driving the UK backwards on energy security. The choice for the Government is clear, either invest in offshore wind farms, EVs and electric heat pumps or continue to be at the mercy of foreign actors such as Putin.”

The UK imported an average of 515TWh of gas each year from 2018 to 2021 (before the gas crisis), and these imports are set to grow as North Sea production declines, irrespective of new licences. [6]

Over 85% of the oil used in UK refineries is imported, and over 90% of the fuel used in the UK has been imported at some stage of its supply chain (whether as oil for refining or as the finished fuel), and these values are set to rise further as North Sea production declines, irrespective of new licences. [7]

The UK spent over £100bn on gas over the past two and a half years of the crisis. [8]

Policy announcements made by the Government on nuclear are unlikely to deliver new power stations soon, with the Hinkley Point C power station now further delayed [9].

In contrast to stagnation in the wider economy, the UK’s net zero economy grew 9% (GVA) in 2023 to be worth £74 billion [10].