Gordon Mackerron, Claire Carter and Florian Kern of Sussex Energy Group, SPRU, University of Sussex

Professor Gordon MacKerron

What do the pre-Spending Review announcements from DECC –  and the Review itself – mean for UK energy and climate change policy?  The upfront statement that energy security is now prioritised while climate goals need to be met more cheaply is nothing new – as far back as the 2008 White Paper Gordon Brown announced security to be an ‘imperative’ while climate change was a ‘challenge’[1].  So: no real change at the top, rhetorical level. But it is clear that the Government’s take on the security agenda is now in almost absolute control, with few visible signs of concessions to the climate agenda.  But addressing energy security can mean tackling a range of potentially competing issues. Security concerns can be strategic and long-term including worrying about imports, and/or shorter term worries about adequacy of electricity supply with possible problems in the intermittency of renewable power.  The government’s new priorities seem to encompass both these concerns.

Dr Florian Kern

The top technological priorities are plain: continuing commitment to nuclear power including large consumer subsidies for Hinkley C until around 2060, a new £250m to spend mostly on small modular reactors (SMR); and a reinforced commitment to shale gas development, including a new Shale Wealth Fund for the north of England. When security is seen through the lens of minimising import dependence, these are classic security-enhancing ideas.  The long-held policy commitment to develop carbon capture and storage technology in the UK through a £1 bn commercialisation programme fund has however now been abandoned. Given the troubled history of the programme in the UK while other countries like Canada are making progress[2], this cancellation of the second attempt to fund large scale demonstration projects in the UK adds insult to injury.  CCS was a major plank in the idea that the electricity system could be mostly decarbonised by 2030 and almost fully decarbonised by 2050 without too much pain in terms of rapid withdrawal from fossil fuels. These ambitions for the electricity system now look more remote.

Fiddlers Ferry Power Station, Mersey © Copyright Alan Godfree and licensed for reuse under this Creative Commons Licence

One of the most striking announcements before the Review from DECC was an apparent commitment to phasing out coal-fired power by 2025. However this is with the caveat that enough mostly gas-based power can be built as a large part of the replacement power needed. What the Review signals is that – whether or not coal is phased out by 2025 – there is now no serious expectation that fossil-based power will need to have CCS fitted (or retro-fitted).  So even if gas replaces coal, this is still problematic in terms of cutting carbon emissions – especially in the absence of CCS.  Gas is about half the emissions of coal fired power but a full order of magnitude worse than nuclear or renewables.  So a gas-based bonanza to 2025 cuts a swathe through the idea that electricity will be effectively de-carbonised by 2050.

It is also worth looking at nuclear and shale from a quite different security perspective – the risk of delayed delivery.  Large conventional reactors are proving hard enough to deliver. The Hinkley point reactors were originally due to help us cook Christmas turkeys by 2017, and now they might just do the same job by 2025. The third station down the line of EDF plans is now due to be Chinese-owned and Chinese-designed, and the politics of that are hardly going to be straightforward. The new commitment to SMRs means that there is now to be a competition to find the best design and build it in the 2020s. This timetable looks tight but could be technically feasible. But even if it is, one of the main advantages claimed for SMRs – proximity to urban areas to allow heat to be utilised – is subject to quite untested public acceptability.  Shale may fare a bit better but this is not clear either. Government is taking powers to over-ride the kind of decision recently made by Lancashire to disallow two fracking projects in their area. But here the Government is engaged in a major contradiction: trying to push through fracking projects irrespective of local opinion, while allowing local opinion free rein to oppose wind power projects, all in a context where ‘localism’ is an avowed objective.  Even if projects are pushed through the predicted contribution from fracking is not expected to dent gas import bills any time soon[3].

This means that the nuclear and fracking prongs of the Government’s security strategy are potentially not secure at all because of a high risk of late and limited delivery.  Ironically the technologies now being reined in by policy – renewable energy and energy demand reductions – offer security both in the sense of being domestic, and in principle more deliverable because they attract relatively little public opposition and are, especially in the demand area, often cheap.  They also of course offer major contributions to emission reductions.

Claire Carter

So the risk that the Government is currently running in its particular take on the security priority is high.  Not only is the achievement of emission reduction commitments significantly less likely than before, but delivery of nuclear and fracking are problematic. Thus imperiling the security objective that is their inspiration. Truly, current policy has a real chance of getting the worst of both security and carbon reduction worlds.

Gordon Mackerron, Claire Carter and Florian Kern, Sussex Energy Group, SPRU, University of Sussex

[1] Department of Business Enterprise and Regulatory Reform ‘Meeting the energy challenge: a White Paper on nuclear power ‘ Cm 7296, London, January 2008, page 4

[2] See Florian Kern, James Gaede, James Meadowcroft, Jim Watson, The political economy of carbon capture and storage: An analysis of two demonstration projects, Technological Forecasting and Social Change, Available online 26 September 2015, ISSN 0040-1625, http://dx.doi.org/10.1016/j.techfore.2015.09.010.

[3] See Claire Carter, Dr Aaron Goater ‘Future of Natural Gas in the UK’ POST note no. 513 http://researchbriefings.parliament.uk/ResearchBriefing/Summary/POST-PN-0513#fullreport