The strategy proposed by Rishi Sunak to promote investment in a series of newly constructed gas power plants for the progression of the nation has caused concerns regarding the United Kingdom’s future environmental goals and the government’s past performance in energy policy.

The recent electricity market reforms by the government, the largest in ten years, have upset environmental advocates. They argue that past unsuccessful policies have led the government to rely on fossil fuels for Britain’s energy security.

Is there a genuine necessity for additional gas plants in the UK?

The gas-fired power stations in Great Britain produced around 40% of the nation’s electricity in the previous year, and they are anticipated to remain a part of the energy infrastructure until the 2030s. However, almost half of these gas plants are scheduled to shut down by the end of the next decade, creating a shortage in the country’s energy resources.

According to Aurora Energy Research, the United Kingdom has a current gas power capacity of 28 gigawatts (GW) for its grid, but it is expected to decrease to approximately 14GW by 2030. This potential decrease in energy production could pose a significant gap, as the country’s nuclear power output has reached record lows after 42 years, and its plans for building new nuclear reactors are progressing slowly.

The government intends to prolong the longevity of numerous current gas plants, but it predicts that a minimum of 5GW of new gas power capacity will be necessary as a reserve source to offer a limited amount of “backup” power during periods of low renewable energy availability.

According to the government, taking the alternative route could potentially lead to power outages, which is a risk that no household or business would be willing to take.

Until now, investors have been cautious about funding new fossil fuel endeavors through the government’s capacity market. This market functions as a reverse auction, providing 15-year contracts to develop new energy projects. However, because investors typically commit to gas plants for 30 years, the capacity market has been deemed a risky venture.

Tom Smout, a senior associate at Aurora, stated that we are currently experiencing a decrease in installed capacity while there is a growing need for electricity. The government’s capacity market has only resulted in the construction of one new gas plant due to investors being hesitant to invest in a plant that has a short lifespan and may become financially burdensome in the future.

What are your thoughts on increasing investments in low-carbon energy?

The government has established bold goals for producing increased amounts of clean energy – however, there are concerns that it has not taken sufficient action to meet them before older power plants cease operations.

The newest strategy aims to significantly increase Britain’s renewable energy capability by 2035, reaching a range of 140 GW to 174 GW. By 2050, the plan also seeks to triple the capacity of the country’s nuclear fleet. Additionally, the government is promoting investments in hydrogen and carbon capture and storage initiatives.

However, the United Kingdom’s slow advancements towards new nuclear plans and challenges in implementing renewable energy projects may result in potential power outages in the later years of the decade.

Dr. Doug Parr, a policy director at Greenpeace UK, stated that the most effective way to achieve a low-cost, secure, and environmentally-friendly energy system is by encouraging significant private investment in renewable energy and modernizing our outdated grid. However, the government has not succeeded in either of these areas. They have hindered the development of inexpensive onshore wind energy, mishandled the latest offshore wind auction, and caused delays of over 10 years for new solar and wind projects to connect to the grid.

According to Lincoln Hill, a policy director for the Nuclear Industry Association, the government’s recent decision to prioritize gas is a direct result of not investing in nuclear energy in a timely manner. Although the government approved the Hinkley Point C nuclear plant in Somerset in 2016, numerous delays have pushed back its expected start date to 2032.

How will this affect Britain’s climate goals?

According to the Committee on Climate Change, a limited use of gas-fired power is acceptable in a decarbonized power system, as long as it does not exceed 2% of the United Kingdom’s power supply.

According to Kate Mulvany, a principal consultant at Cornwall Insights, if the new gas plants are only used as a backup when wind and solar power are unavailable, the amount of gas generated in Britain could still decrease in accordance with the country’s climate goals.

Unfortunately, there is a potential for these recently constructed gas facilities to operate for longer durations than intended, which could potentially exceed the UK’s allotted carbon budget.

What other measures can the government take to utilize low-carbon electricity?

The government’s latest energy initiatives rely heavily on the implementation of seven distinct “pricing regions” throughout the nation in order to improve the efficiency of the electricity system.

According to the proposed strategy, each region would determine a distinct cost for electricity depending on its own electricity supply and local usage, resulting in potentially higher prices for the south-east region and comparatively lower prices for parts of Scotland, potentially making them some of the most affordable in Europe.

This would incentivize renewable energy developers to construct their projects in proximity to densely populated regions with greater energy needs, consequently decreasing the costs involved in improving the UK’s transmission lines and power network for long-distance electricity transmission. Additionally, it would aid in reducing the expenses for shutting down wind farms that produce excess electricity that cannot be accommodated by the grid.

The amount of money paid has significantly increased in the last few years, rising from approximately £700 million in 2018/19 to £1.8 billion in 2022/2023. If the UK’s networks experience a three-year delay, these expenses could rise to about £8 billion in the late 2020s, which is equivalent to an additional £80 on the average yearly electricity bill for households.

Do these plans lead to higher energy costs for me?

It seems that this may not be the case. Theoretically, the money saved by reducing unnecessary expenditures on grid upgrades and compensating windfarm owners for shutting down their turbines would be reflected in lower consumer bills.

Communities that host renewable energy projects would see the biggest fall in their bills but even cities in the south-east would probably see their bills remain flat. On average the government estimates the reforms could save households an average of £45 on their annual energy bill.

Source: theguardian.com