With energy and fuel bills soaring in the wake of the Russian invasion of Ukraine, and growing pressure to bolster our energy security, the PM and his Business Secretary, Kwasi Kwarteng, this week set out their much-delayed British Energy Security Strategy. After a decade of delayed action on renewables and decarbonisation, much hope was placed in this plan to finally cut the UK’s dependence on fossil fuels, particularly those imported from belligerent autocracies like Russia.
But despite the urgency spurred by the current crises, the strategy has already been the subject of extensive Whitehall negotiation, delays in publication, and repeated rumours that the Chancellor has vetoed some of the most ambitious measures.
The resulting plan is a recipe for failure, with unforgivable omissions on reducing energy demand through measures like home insulation, and unambitious proposals to boost onshore wind, a bugbear of many “Nimby” Conservative backbenchers, despite it being quick, cheap and popular.
There are real questions over the level of targets set for new nuclear reactors and hydrogen capacity, and a coordinated strategy to deliver them is sorely lacking. Even where the government’s aims are going in the right direction, such as for offshore wind, there is valid concern that the strategy is strikingly vague on how their stated ambitions will be achieved.
Given the challenges of technological innovation and development, the roll-out and adoption of this energy strategy is comparable to the development and roll-out of the Covid-19 vaccine: we’re facing a mammoth (or “moonshot”) task to deliver us from existential risk, and a coordinated, joined-up effort by the state, industry, academia and the voluntary sector, not to mention unprecedented levels of strategic investment, are needed to get to where we need to be.
This was, of course, true over the past two years. In response to the Covid-19 pandemic, the UK government, in partnership with Oxford University and AstraZeneca, achieved a stunning success with the development and roll-out of an effective vaccine in record time. This was achieved with a dynamic, multidisciplinary Vaccine Taskforce and a government willing to break down barriers for rapid progress.
The PM may have had an eye on pleasing free-marketeers in his own party when he ascribed this success to “capitalism and greed”. But within government, those with knowledge of how the vaccine really came about came to very different conclusions. A study by the (now disbanded) Industrial Strategy Council found “government played a key role in expediting every stage of the Oxford/AstraZeneca vaccine development process”.
This was not a success of private sector creativity; it was a win for public-private cooperation and the lessons were clear. The council said that government should set clear and ambitious missions and map a clear path to success, aiming to co-design and co-deliver these plans with the public, private and voluntary sectors. It should also invest at scale in building capacity, use strategic public procurement, and build resilience in critical supply chains.
Yet the government has failed to learn the lessons of the vaccine success story and the important implications for industrial policy that will be critical to making its own energy strategy work.
The fact that the government knows how to do this but isn’t doing it, either through the penny-pinching of the Chancellor, or because it is so ideologically constrained about the role of the state, should concern us all.
It’s a common complaint that issues such as climate change or healthy ageing are often not taken as seriously as a war or a natural disaster. But technological leaps are often made during historical crises – the invention of GPS was spurred by the paranoia and brinkmanship of the Cold War, as were Nasa’s moon landings. Often a time of existential crisis can spur people to work together in new ways and with a new urgency.
So, what would this look like for the Energy Security Strategy?
The Russian invasion of Ukraine, exacerbating already-present inflationary pressures, is an opportunity to accelerate our decarbonisation efforts, reduce our dependence on imported fossil fuels, and achieve greater energy security. Against a backdrop of rapidly rising energy prices, instead of repeating concerns about the upfront costs of installing home insulation and heat pumps, the government should be presenting these measures as a way of quickly reducing energy costs, saving customers and taxpayers money in the medium term, with a long-term benefit of reducing carbon emissions.
It means the state doing the things that only the state can and partnering with the private sector to leverage its capacity, investment and innovation. Instead of just setting a target for nuclear capacity, it would mean planning a clear path from today to the target’s achievement.
One of the most successful interventions of the vaccine development was essentially a purchase guarantee. Investing in uncertain technologies is costly and risky for a company and requires capital investment. The government said that if a manufacturer could produce enough vaccines to a pre-defined standard, they’d purchase them. This gives security to a company to invest. The government should be applying the same principle to photovoltaic installations or heat pumps.
Most importantly, the success of the vaccine built on a strong foundation of life sciences in the UK that has been supported by decades of consistent public investment with no clear expectation of return beyond developing capacity and capability. The same cannot be said for the renewables sector. For too long investment has chopped and changed, and has far too frequently been absent.
The government knows how to achieve innovation challenges – it just did so to great effect during the pandemic. We will only achieve the targets in the energy strategy – as well as those strikingly absent on energy efficiency and onshore wind – if we are serious about having a real plan to implement and initiate a journey towards them. Yet the strategy is largely silent on how these targets will be met. The Chancellor seems keen to save money, but if we fail, it will be costly for households and costly for the planet.
George Dibb is head of the IPPR Centre for Economic Justice