Britain is set to unveil a plan to increase energy security and independence by investing in renewables as cleaner and more affordable energy sources.
Wholesale gas and electricity prices have surged in Europe since Russia’s invasion of Ukraine last year, and the British government has been subsidizing household and business energy bills since October.
Offshore wind, carbon capture and storage, and new green hydrogen production plants will also receive support under the plan. The aim is to protect the country from future price spikes and accelerate the transition to cleaner, cheaper, home-grown energy.
National security and climate change depend on renewables
The transformation of Britain’s energy system is no longer solely about tackling climate change, but also about national security, said finance minister Jeremy Hunt.
The plan was attacked by the opposition Labour Party and advocacy organizations for failing to provide additional funding and failing to provide a response to the $369 billion in green subsidies provided by the United States’ Inflation Reduction Act (IRA). Hunt told a parliamentary committee that the government would respond to the IRA in the autumn.
Renewable energy industry concerns
In the past year, Britain has imposed windfall taxes on renewable energy sources as well as oil and gas. Businesses claim the levies discourage investment, will likely result in a greater reliance on imported fuels, and will undermine Britain’s climate goals.
Both improved investment incentives and applying floor pricing to the windfall tax were requests made by the oil and gas industry. However, neither was addressed in the government’s proposal.
Investing in offshore wind
The UK plans to invest £160m in the development of offshore wind farms as part of its effort to increase energy security. The funds will support the construction of up to two new offshore wind farms in the country, with the aim of reducing dependence on imported gas and providing clean, renewable energy.
The UK has a target to generate 40GW of offshore wind power by 2030, which would require significant investment. The announcement of the funding was welcomed by the industry, which said it would help to create jobs and boost the economy.
Carbon capture usage and storage
The UK government plans to invest £265m in carbon capture usage and storage (CCUS) projects. This is crucial in achieving the country’s net-zero emissions target.
The funds will support the development of four low-carbon industrial clusters in the northwest, Teesside, Humberside, and Scotland. The clusters will capture carbon dioxide emissions from industries such as steel, cement, and chemicals and store them underground.
The government hopes that the CCUS projects will help to create jobs and support economic growth in these regions.
New green hydrogen production projects
The UK government is set to invest £121m in new green hydrogen production projects. It is part of its plan to boost energy security.
The funding will support the development of three low-carbon hydrogen hubs in Scotland, northwest England, and Wales. The hubs will use renewable electricity to produce hydrogen. Transport, heating, and industrial processes use it as a clean fuel.
The government hopes that the investment in green hydrogen will help to create jobs and boost the economy.
Funding renewables is a step in the right direction
The British government’s plan to boost energy security and independence through investment in cleaner and more affordable energy sources is a step in the right direction.
The plan’s detractors contend that it does not go far enough and does not provide additional funds or a countermeasure to the $369 billion in green subsidies included in the U.S.’s Inflation Reduction Act (IRA). It remains to wait and see whether the government will respond to these concerns in the coming months.