UK to miss electricity supply targets amidst ‘lack of strategic oversight’ from Ministers, say MPs

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The absence of strategic leadership from Ministers and the lack of a coherent, overarching plan to deliver national targets undermines our ability to reduce our dependence on imported expensive fossil fuels for electricity, it warned.

The Business, Energy and Industrial Strategy Committee’s report on decarbonisation of the power sector cautioned that funding for renewables is under threat as the UK’s attractiveness for investment in low-carbon technologies has ‘deteriorated’.

The report suggests investor confidence has been hit by;

• policy instability including windfall tax exemptions that favour fossil fuels;
• failure to tackle rising development costs;
• more lucrative packages from international rivals;
• 15-year delays to connect to the grid, and;
• a cumbersome planning regime.

Chair comment

Committee Chair Darren Jones said,

“Ministers think that publishing strategies and releasing social media videos will deliver the energy infrastructure the country needs. It’s failed before and it keeps failing.
Without a coherent, overarching delivery plan, the Government risks undermining the UK’s ability to generate, store and distribute the fossil fuel free electricity the country needs to hit Net Zero.
The UK is now competing with the US and Europe for investment. Government must urgently make us an attractive investment proposition again and ensure that the pool of capital and labour available for building low-carbon energy projects is not lost.”

Energy companies and network owners

The report calls on Ofgem to retrospectively audit the certificates presented by Drax for the payment of Government subsidies, citing concerns about evidence underpinning the statements that verify the source of wood pellets burnt at Drax’s facilities.

Drax was the subject of a BBC Panorama documentary last year claiming that it imports high-grade wood from virgin forest to use in its UK power plant. It is estimated that it will claim £11bn in taxpayers’ cash between 2011 and 2027 when subsidies end. The Committee called on the Government to phase out subsidies for large bioenergy plants without carbon capture and storage facilities.

The Committee also noted it’s dissatisfaction with the major oil and gas companies, which failed to be transparent with the Committee about levels of investment in non-fossil fuel based generation technologies. Members were critical of the owners of the nation’s electricity networks for failing to adequately invest in their expansion, in order to have the capacity required by renewable energy generators. 

Chair comment

Mr Jones added,

“It’ll be hard enough to meet the challenge of cutting carbon emissions in energy without the prospect of any operators taking advantage of the subsidy regime. If any firm is found to be abusing the public purse by falsely inflating their renewable credentials, they should face consequences. We are not against bioenergy, but oppose it when it’s based on unsustainable sources.”

“The oil and gas companies which have enriched themselves over decades, knowingly contributing to worsening climate change, have a moral duty to use their wealth to help us accelerate the transition to net zero. The current levels of transparency surrounding their investments is inadequate and must be improved so that they can be held to account for their actions.”

Other key recommendations and conclusions

• Onshore wind: Planning must be reformed to enable a substantial increase in onshore wind development in England.
• Nuclear: The Government needs to publish details of its nuclear pipeline, the technologies it’ll use and where funding will come from. The UK also has the capability to conduct many of the critical parts of the nuclear fuel supply chain; uranium conversion, enrichment, and fabrication. There is an export opportunity with nations looking to reduce dependence on Russian fuel. The Government should ensure that these assets are supported.
• Network capacity: Shutting off renewable generators and turning up gas plants closer to demand due to network constraints is costing over a billion in fees and these are set to rise. The report calls on Ministers, Ofgem and network owners to step up investment in grid upgrades and for Ofgem to be given a net zero duty. It also calls for the current first come, first served model to secure a connection to the grid to be overhauled.