In the past two years, there have been a lot of changes within the energy market due to the pandemic and global markets reopening. This created a spike in demand and dramatically increased prices across the market. Fluctuations in prices have increased even further across the market since the Russian invasion of Ukraine. Since these events took place Russia has been restricting gas and oil supplies to Europe which has raised prices across the global energy market.
Due to this, the UK has come up with an energy strategy to ensure that people and businesses are protected from rising prices and create a flow of energy that is affordable, clean, and secure. This will ensure the country is not affected by the global energy market as servery as we are now. The focus of the energy strategy is to ensure prices become more stable and lower for households and businesses. As well as reducing prices the government also wants to ensure we stay on track for net-zero whilst keeping the energy system as secure as possible.
The government plans to make all UK homes and Buildings run on low carbon heating by 2050. This will improve energy efficiency which means oil and gas would be needed and would reduce our dependency on foreign gas. The focus of this part of the strategy is to improve insulation on homes so less heat is needed or to have alternative ways of heating such as heat pumps.
The Government is also committed to providing smaller businesses advice on how to improve efficiency and decarbonization as they may lack the funds and resources to set out a decarbonization plan or improve efficiency within the business.
Oil and gas
A lot of our oil and gas comes from imports from other countries this means that our energy prices depend heavily on the global market. Therefore, the government has plans to utilize the North Sea reserves to improve energy security. Using our gas production will also create fewer greenhouse gasses than having it imported from other countries. By doing this we will be able to produce more gas domestically while we transition to renewables.
Wind power is a big part of the energy strategy. The UK has already built the world’s first floating offshore wind farm. This is estimated to produce enough wind capacity to power every home in Britain by 2030. For offshore wind the government is also planning to increase the speed of the process it takes to build and run the wind farms to increase energy output quickly. Offshore wind is being backed by £191 million to ensure we can reach up to 5GW of floating offshore wind. Onshore wind is also being considered for improvement to generate power for the national network.
We currently have a capacity of 14GW of solar power in the UK. With this new strategy, the government hopes to improve this throughout the next decade with an expected fivefold increase in deployment by 2035.
Planning laws are also going to be reviewed to ensure we can build more solar farms and use them with other functions such as agriculture, onshore wind generation, or storage to improve their use and energy production.
There is also planning to increase the amount rooftop solar panels. The installation process of solar panels will become easier and cheaper for residential homes. It will also be considered how to make use of public sector rooftops to ensure we are using as much renewable energy as possible.
There is ambition from the government to deliver up to eight new nuclear reactors by 2030, they want around 25% of the UK’s electricity to come from nuclear power by 2050. Currently, we have around 15 reactors that could supply around 20% of electricity however they are due to cease operating before 2030. Funding and approving new sites have been one of the biggest challenges, however, a new government body will be set up to oversee the delivery of the new nuclear power plants.
The strategy also contains plans to improve the country’s hydrogen production. There are plans for production to be doubled by 2030. A lot of this will be coming from electrolytic hydrogen. Efficiently using our surplus renewable power for hydrogen could reduce electricity systems costs. The strategy also outlines plans for new business models for hydrogen transport and storage infrastructure to grow a hydrogen economy.
Storage and flexibility
The government wants to ensure we have a more flexible and efficient energy system in place. One way they plan to do this is by developing long-duration electricity storage to make sure systems are balanced and we have enough electricity stored to cover periods of higher demand and lower supply without affecting general market prices. The government also way to makes sure that any plans they put in place to do with energy fully comply with consumers and sole issues instead of creating more. They also plan to smarten up the current system for more flexible paying options that can be unique to each household or building.
Although the government has started to set out plans now, it may take many years to affect prices. Therefore, although the future looks bright for lower energy prices it is still essential that as a business you are keeping on top of your current energy bills. This includes switching your energy contracts when they come to an end and comparing prices from different suppliers to ensure your get the cheapest contract. If you are struggling with your business energy tariffs and are finding prices are a lot higher when compared to the last time you got an energy deal. Then why not get a free quote from us today. As business energy consultants we can help reduce the amount you are spending on your energy bill.