The Sunday Times - UK (2022-04-03)

The Sunday Times The Sunday Times April 3, 2022April 3, 2022 11

All these wind and nuclear pledges

won’t spare us five more years of pain

A

nyone listening to

Boris Johnson’s

evidence before a

cross-party group

of MPs last week

would have been

forgiven for

thinking the cavalry

was coming in the battle

against soaring energy bills.

The prime minister talked

about the “massive potential”

of offshore wind farms and

said he wanted “big-ticket

nuclear solutions” to be part

of Britain’s push for self-

sufficiency.

Spiking wholesale gas

prices, exacerbated by

Russia’s invasion of Ukraine,

have brought the energy mix

into sharp focus by piling

pressure on to families and

businesses.

On Friday, 22 million

customers on tariffs linked to

the energy price cap saw

their bills rise by £693 a year

to £1,971 on average.

Suppliers’ websites crashed

as people rushed to submit

meter readings under a

cheaper rate before midnight

on Thursday. The

government’s independent

economic forecaster has

warned that bills could hit

£2,800 in October.

But a row between Johnson

and Rishi Sunak over the cost

of building up to eight new

nuclear power stations, plus

delays to the energy security

white paper due this week,

highlight an awkward truth:

none of Westminster’s

solutions will be quick

or easy.

Although solar and

offshore wind farms are less

complicated than developing

nuclear capacity, it can take

several years to get planning

permission and connect them

to the national grid. “The

planning process for wind

takes years and the turbines

are erected in a day,” said

Greg Jackson, founder of

Octopus Energy.

After more than a decade

of dithering over nuclear

power by successive

governments, which has

alienated potential investors,

it could be a decade or more

until the lights go on at

Johnson’s first new plants.

In the meantime, a revised

funding model announced in

October by Kwasi Kwarteng,

the business secretary, will

actually increase energy bills

by passing some of the

upfront costs of nuclear

projects on to consumers.

Tim Stone, chairman of the

Nuclear Industry Association,

acknowledged that the

nuclear push was far too late

to make any difference to the

current crisis.

“This gives some

confidence, if they get it right,

that our children and

grandchildren will be

protected, but there’s no way

it touches anything in the

short term,” he said. “We are

in deep trouble for the next

five-plus years.”

The European Union

imports about 40 per cent of

its gas from Russia; the UK

only 4 per cent. Germany and

Austria took the dramatic

step of drawing up rationing

plans last week, preparing to

shut down parts of industry

to keep gas flowing to homes.

Johnson’s cabinet has

appeared unwilling to advise

consumers to cut back —

perhaps mindful of the

backlash that greeted the

supplier Ovo in January after

it recommended customers

cuddle pets to stay warm.

Efforts to improve the

insulation of draughty houses

have been shambolic. The

green homes grant of up to

£10,000 was supposed to

improve the energy efficiency

of 600,000 properties but

ended up covering just

47,500. A new scheme was

launched on Friday offering

homeowners grants of up to

£6,000 to install heat pumps

costing about £10,000,

although fewer than one in

five homes may be eligible

because they must first be

shown to have sufficient loft

and cavity wall insulation.

Sunak has been severely

criticised for failing to do

enough to protect families

from the cost of living crisis.

This month’s rise in energy

bills comes as council tax and

national insurance payments

are going up too. The

chancellor has given four-

fifths of households a £

discount on their April

council tax bill and promised

a £200 loan to all electricity

customers in October.

Richard Howard, of the

consultancy Aurora Energy

Research, said: “It’s crazy

that there’s not more support

for households on things like

loft insulation ... we would

be permanently using less

energy, particularly gas.

“You could also target that

really well towards poorer

households. But it’s not a big,

shiny infrastructure project

that you can cut the ribbon

on — it’s thousands, if not

millions, of small

interventions — so it’s less

attractive politically, maybe.”

Long-term shifts in the

energy mix and the closure of

the biggest storage facility

have left the UK highly

exposed to wholesale gas

prices, which are even more

volatile than before due to the

war in Ukraine. Having

traded at about 50p a therm a

year ago, the price of gas shot

up to more than 500p a

therm early last month.

Britain has cut its carbon

emissions faster than any

other rich country over the

past two decades. In 1992,

coal generated more than

60 per cent of our electricity,

with solar and wind power

almost nonexistent. Coal has

since fallen to less than 2 per

cent of the mix, with

renewables up to nearly

40 per cent. Gas is now the

single biggest source at

40 per cent.

We have been net

importers of gas since the

decline of North Sea

production in the early

2000s, with most coming

from Norway. Meanwhile, a

collapse in nuclear power

from almost a quarter of the

energy mix to just over 15 per

cent has left us increasingly

turning to gas — and

sometimes even to coal —

when the sun doesn’t shine

and the wind doesn’t blow.

Johnson wants nuclear

power to account for 25 per

cent of electricity generation

by 2050. That will require a

huge turnaround. All but one

of the eight plants currently

in operation are due to be

switched off by 2030. Costs

and uncertainty over

government support have

deterred international

investors such as Japan’s

Hitachi, which walked away

from a site in north Wales two

years ago after sinking

£2.1 billion into the project.

The only nuclear plant

being built is the heavily

delayed and over-budget

Hinkley Point C, in Somerset,

a joint venture between

France’s EDF and Beijing’s

China General Nuclear

Power Group (CGN). The

government wants to push

ahead with a second EDF

scheme, Sizewell C, on the

Suffolk coast, and has set

aside £1.7 billion of taxpayers’

money to help. But cooling

relations with China means

ministers want to eject CGN

from its 20 per cent stake and

bring in new investors.

This week’s white paper is

expected to set out targets to

more than triple solar power

capacity and quadruple

offshore wind. The 2030

plans include doubling

onshore wind, which is

unpopular with many

backbench Tory MPs due to

its effect on the landscape.

Fracking is understood to be

off the table.

This renewables splurge

will bear fruit more quickly

than the government’s

nuclear ambitions. But even

so, we face at least five years

of elevated gas prices — and

no sign of the cavalry.

For many families, the only

hope will be to turn down the

thermostat and put on

another jumper.

OLIVER

SHAH

Associate Editor

is fined?” asked a cabinet minister. “Who
are his proper allies? It’s really only
Nadine [Dorries], Ben [Wallace], Jacob
[Rees-Mogg] and Suella [Braverman].
There are very few people who would
pick up the baton for him.”
The relationship most in the spotlight
is that between Johnson and Sunak.
“Rishi and Boris have royally fallen out,”
a fellow cabinet member said. “There is
so much tension. I wouldn’t be surprised
if [the PM] moved him.”
Johnson has encouraged others to
challenge Sunak. When Rees-Mogg, the
minister for Brexit, told Johnson he
would have to step on toes to tear up EU
regulations, he said: “Some of them will
be rather small toes of people in big
departments.” Johnson told him to “go

forth” and scrap 1,000 regulations.

Yet Johnson’s fourth crunch meeting

last week — a bilateral on Thursday with

Sunak on paying for nuclear energy pro-

jects — “ended amicably” with “no fire-

works”, defusing tensions. A senior offi-

cial said: “They both left comfortable.”

For the time being, Johnson is focused

on the issue that has turned his fortunes.

His fifth key encounter was a crunch

meeting of the National Security Council,

which met at 8am on Friday. Details of the

discussions are classified but the PM is

telling his team he wants “a gear change”

to escalate the lethal aid being sent to

Ukraine, including anti-ship missiles, to

stall a Russian seaborne attack on Odesa,

just as British NLAW anti-tank weapons

brought Putin’s armoured advance on

Kyiv to a grinding halt.

A senior figure said: “The next target is

Odesa. It’s not tanks that are going to

come at Odesa, it’s going to be ships.

NLAWs don’t work. They want the kind of

stuff that can take out ships. The PM is

eager and determined to help.”

Britain will act as an “Amazon-style

delivery service” for kit from fellow west-

ern nations. Johnson is also determined

to arm Ukraine so Moscow does not think

of reneging on any peace deal. Johnson

told aides: “We need to make the quills of

the porcupine indigestible.”

With partygate and election troubles

ahead, only time will tell if Johnson’s

attempt to grow quills of his own deters

his party from devouring him.

@ShippersUnbound

£2,

What bills could hit

in October

£1,

Average bill for those

affected by the price cap

22m

Number of customers on

tariffs linked to the energy

price cap who saw bills rise

You can’t raise

the fines with

anyone in

No 10. It’s like

Putin’s Russia

in there

ILLUSTRATION: TONY BELL