The UK Government has updated its Energy Security Strategy with an undertaking to upgrade 300,000 of the country’s least energy-efficient homes, launch carbon capture and storage projects and accelerate the development of green hydrogen, nuclear and floating offshore wind.
A raft of new or updated environmental policies has been widely anticipated.
Commenting on the launch of the Energy Security Strategy, Prime Minister Rishi Sunak said that new measures would help respond to “soaring” household energy bills.
“We have stepped in to shield people from its worst impacts by helping to pay around half the typical energy bill,” Sunak said. “But we are also stepping up to power Britain and ensure our energy security in the long term with more affordable, clean energy from Britain, so we can drive down energy prices and grow our economy.
“That’s why we’re driving forward plans to boost renewables, revive nuclear and build new thriving industries like carbon capture, which will in turn create good jobs across the country, provide new opportunities for British businesses at home and abroad, and maintain our world-leading action to reach net-zero.”
The updated Strategy will deliver a self-proclaimed “energy revolution”, the Government notes. So, what exactly is in this updated Energy Security Strategy?
Great British Insulation Scheme
Recently, the Government confirmed how it would allocate almost £2billion of funding to improve the energy efficiency of more than 115,000 homes and public sector buildings like schools and hospitals.
The funding forms part of the latest phase of the Home Upgrade Grant (HUG), which applies to privately owned properties, and the Social Housing Decarbonisation Fund, for homes owned by local authorities and other social housing providers.
Across both schemes, the Government is allocating £1.4bn – around £630m for the HUG and £780m for the Social Housing Decarbonisation Fund. The Government has also confirmed an additional £1.1bn of match funding from local authorities, social housing providers and charities for the latter scheme.
For the last 12 months, rumours have swelled that the Government would introduce a new £1bn scheme to insulate low-income households this winter, using funding raided from other low-carbon energy initiatives.
Reports suggested that funding could potentially be raised through an extension to the existing ECO levy scheme. The scheme launched in 2013 and requires energy suppliers to provide energy efficiency support to vulnerable consumer groups.
An ECO extension has been advocated by groups including the Sustainable Energy Association, Construction Leadership Council, National Insulation Association and EDF. The current scheme ran out at the end of March 2022 and its next phase, due to run through to 2026, is yet to be finalised.
While details on this initiative are sparse, Shapps will confirm the creation of the Great British Insulation Scheme, which will see the ECO extension rebranded. The Government has stated that the Scheme will upgrade 300,000 of the country’s least energy-efficient homes.
The Government claims that up to 80% of homes in council tax bands A-D will qualify for support under the revamped ECO+ scheme, and could save around £300-400 annually on average. It contributes to the Government’s target to reduce energy demand by 15% by 2030.
The Government is also launching a new £30m million Heat Pump Investment Accelerator. The plan will aim to leverage £270m in private investment to boost UK manufacturing of the technology. The Government has also confirmed that the Boiler Upgrade Scheme, which offers a £5,000 grant to anyone buying a heat pump, will be extended to 2028.
Carbon capture technologies
The Government will unveil the first projects eligible for funding in order to create “carbon capture clusters” in key industrial locations, a plank of the £20 bn Chancellor Jeremy Hunt earmarked for CCUS technology in his March budget.
The Climate Change Committee (CCC) has recommended that the UK aims to host at least 22 million tonnes of annual carbon capture and storage (CCS) capacity online this decade, in order to support its legally binding 2050 net-zero target.
The UK is aiming to host 24GW of installed capacity by 2050, meaning that nuclear supply will meet 25% of the UK’s electricity demands by mid-century.
The Government has unveiled the official formation of the independent body overseeing the nuclear industry. Great British Nuclear will launch the innovation fund competition for Small Modular Reactors (SMRs).
Last summer, the UK Government opened its first major funding rounds for green hydrogen production, as it plans for at least 5GW of installed capacity by 2030.
The fund provides up to £240m of grant funding from the Government to projects developing and building low-carbon hydrogen production projects. The first tranche of funding will go to green hydrogen production.
The Government has also today confirmed that it would reform the planning process to speed up energy infrastructure development including solar power and offshore wind.
Energy Secretary Grant Shapps also announced that the Government would consult on the introduction of “carbon border taxes” for manufacturers and carbon-intensive industries.
Published in January, the independent Net-Zero Review report, entitled ‘Mission Zero’, made 129 recommendations for delivering a more “pro-business, pro-growth” pathway to net-zero by 2050. It was commissioned by Liz Truss and drawn up by Chris Skidmore MP.
The Government marked Green Day by publishing a response to each and every recommendation in full.
The High Court ruled the strategy unlawful last summer and requested an update within nine months.