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Powering Up Britain

Volume 730: debated on Thursday 30 March 2023

Cheap, abundant and reliable energy is a foundation stone of a thriving economy. We rely on it to power our homes, our infrastructure, and industry. Affordable and plentiful energy makes businesses more competitive, generating growth, jobs and prosperity. It keeps the cost of living down, and will help bring down inflation.

A global pandemic, Putin’s brutal war in Ukraine, and Britain’s continued reliance on imported oil and gas have pushed up energy prices to unprecedented levels over the past year. The Government have stepped in to pay half of the typical household’s bills over winter and around half of wholesale energy costs for some businesses. This was the right thing to do, but this approach is not sustainable.

The creation of a new Department for Energy Security and Net Zero in February was a clear statement of intent by this Prime Minister and this Government. Energy security and net zero are two sides of the same coin. Cheaper, cleaner, domestic sources of energy can break our link with reliance on imported fossil fuels, meet our long term energy needs, bring our bills down and keep them down.

We are in a strong position to drive the energy transition. We have seen huge investment in our renewables sector since 2010. We currently have the world’s largest operational offshore wind farm project, Hornsea 2, and the second, third and fourth largest operational offshore wind farm projects in the world. We have delivered the second highest amount of recorded low-carbon investment cumulatively across Europe over the last 5 years and estimate that since 2010, the UK has seen £198 billion of investment into low-carbon energy, through a mixture of Government funding, private investment and levies on consumer bills. Now is the time to go further.

“Powering Up Britain” announces the Government plans to diversify, decarbonise and domesticate energy production. The plans launched today will set out a blueprint for the future of energy in this country—boosting the UK’s energy security and energy independence—and help to achieve wholesale UK electricity prices that rank amongst the cheapest in Europe by 2035. It will underpin the UK’s clean energy transition, create new jobs and investment, protect consumers and businesses from volatile international energy markets, and drive us towards net zero by 2050. To meet this ambition, the Department for Energy Security and Net Zero will deliver:

Energy security: setting the UK on a path to greater energy independence.

Consumer security: bringing bills down, and keeping them affordable, and making wholesale electricity prices among the cheapest in Europe.

Climate security: supporting industry to move away from expensive and dirty fossil fuels.

Economic security: playing our part in reducing inflation and boosting growth, delivering high skilled jobs for the future.

Our plan contains significant new policy and Government investment across different sectors of the economy, including:

Delivering Great British Nuclear (GBN): We are matching the global competition and scaling-up our nuclear programme by having launched GBN, responsible for driving delivery of new nuclear projects, backed with the funding it needs. The organisation will be initially led by an interim chair and CEO and will be based in or around the Greater Manchester area. This body will support our ambition to ramp up nuclear capacity in the UK to up to 24GW by 2050. The first priority of GBN is to launch a competitive process to select the best small modular reactor technologies. This will commence in April with market engagement as the first phase. The second phase—the down-selection process—will be launched in the summer, with an ambition to assess and decide on the leading technologies by autumn. The Government are committed to a programme of new nuclear projects beyond Sizewell C, giving industry and investors the confidence they need to deliver projects at speed.

Making a world-leading commitment to Carbon Capture, Usage and Storage: We are announcing the eight projects to progress to negotiations to form the first two CCUS clusters, in Wales, the North West and the East Coast of England, and that we will launch a process to enable expansion of those Track-1 clusters later this year. We are also launching the process for confirming the next clusters for deployment in Track-2. Our initial view is that Acorn and Viking are the leading contenders for Track-2 transport and storage systems.

Delivering a Hydrogen economy: Our 2030 hydrogen production ambition could generate enough clean electricity to power all of London for a year. We are announcing a suite of developments that get that ambition under way: confirming the first winning projects from the £240 million net zero hydrogen fund, naming the two CCUS-enabled hydrogen projects moving forward on the Track-1 clusters, publishing a shortlist of 20 projects we intend to enter due diligence with for the first electrolytic hydrogen allocation round (HAR1); and announcing our intention to open two further hydrogen funding rounds in 2023.

Accelerating deployment of renewables: Our goal is to develop up to 50GW of offshore wind by 2030 and to quintuple our solar power by 2035. We are opening the latest allocation round of the UK’s world leading contracts for difference (CfD) scheme to incentivise investment in renewable energy. UK levy funded support for renewable power since 2010 has totalled around £80 billion. The UK is a world leader in offshore wind and floating turbines represent the next frontier. We are launching £160 million of funding for pilots of the floating offshore wind manufacturing investment scheme to build UK port infrastructure to further reduce the cost of offshore wind.

Reducing household bills by increasing energy efficiency: We are confirming plans for our new energy company obligation scheme the Great British insulation scheme, extending help to a wider group of households. This will mean that around 300,000 of the country’s least energy efficient homes could save £300 to £400 each year as part of a £1 billion energy efficiency programme by March 2026. This will form part of our work to meet our 15% demand reduction target by 2030 which will not only help lower bills, but also support our net zero objectives.

Reducing our reliance on fossil fuels to heat our buildings: The Government has an ambition to phase out all new and replacement natural gas boilers by 2035 at the latest. People's homes will increasingly be heated by British electricity, not imported gas. The heat pump investment accelerator will mean heat pumps are manufactured in the UK at a scale never seen before. We want to make it as cheap to buy and run a heat pump as a gas boiler by extending the boiler upgrade scheme by three years.

Decarbonising transport: We are signalling our long-term plans for decarbonising road and air travel, continuing to provide strong market signals and incentives to drive supply chain development. We are publishing a final consultation on the zero emission vehicle mandate: requiring that from 2024 an increasing percentage of manufacturers’ new car and van sales are zero emission. We are announcing more than £350 million investment in electric vehicle charging infrastructure. We are also consulting on a long-term trajectory for sustainable aviation fuel uptake in the UK through a mandate to be introduced from 2025.

Speeding up planning and networks: We will be publishing a revised set of energy national policy statements for consultation, covering overarching energy, renewables, electricity networks, gas generation, and pipelines. On 23 February 2023 the Government published our nationally significant infrastructure project action plan, which sets out how the Government will reform the consenting process to ensure the planning system can deliver for the future, to meet the demands of a greater number and complexity of cases and deliver against Government ambitions. The Electricity Networks Commissioner, Nick Winser, has been tasked to advise Government on what more can be done to accelerate grid delivery, and will present recommendations to Ministers in June. We will respond with an action plan this year.

Mobilising private investment: Our updated 2023 green finance strategy will strengthen the UK’s position at the forefront of the growing global green finance market while supporting the investment needed to meet our targets. This includes maximising the impact of the UK’s public financing institutions, for example through the UK Infrastructure Bank with its £22 billion of financial capital. It also sets out our pathway for the UK to become the world’s first net zero aligned financial centre, equipping the market with the information and tools necessary to meet this goal.

Supporting industry through the transition: The Government are exploring a package of potential carbon leakage measures to mitigate this risk at all stages of the UK’s net zero transition. Doing so will give industry confidence to invest in the UK in the knowledge their decarbonisation efforts will not be undermined. We are also announcing a new phase of the industrial energy transformation fund to support the development and deployment of technologies that enable businesses with high energy use transition.

Building on our COP26 Presidency: The UK will continue to lead internationally, building on our COP26 presidency. Two of the documents we are publishing today—the 2030 strategic framework for international climate and nature action and the HMG international climate finance strategy—show what this leadership will look like in practice. We are delivering on our commitments—including our £11.6 billion contribution from 2021-22 to 2025-26 to the $100 billion per year global climate finance goal for developing countries. Our international work delivers on the UK’s domestic agenda—improving energy security by accelerating the energy transition, bringing down costs of new technologies for our own net zero plans, and opening up huge economic opportunities for trade and investment.

Detail of these announcements is included across a suite of publications, notably:

Powering Up BritainThe Energy Security Plan: which sets out the steps the Government are taking to achieve our vision to power the UK through affordable, home-grown, clean energy.

Powering Up Britain—The Net Zero Growth Plan: which builds upon the plan laid out in the net zero strategy, strengthening delivery by focusing on the action we can take to ensure the UK remains a leader in the net zero transition, and meets our carbon budgets. We are also responding to the independent review of net zero, led by my right hon. Friend Chris Skidmore, and partly or fully acting on 23 of his 25 recommendations for 2025, demonstrating that the Government are committed to delivering our decarbonisation targets in a pro-growth way.

The importance of this Department is clear. The aims of this Department are clear. We will deliver for amongst the cheapest wholesale electricity prices in Europe, powered primarily by renewables, domestically sourced, ensuring the security of our energy supply. We will maintain our position as a global leader on the net zero transition, ensuring we bring the world with us to meet this global challenge. Making Britain an energy secure, net zero nation, is one of the greatest opportunities of our time. This Department, and the plans we have outlined today, lay the roadmap to get us there.

I will place copies of “Powering Up Britain—The Energy Security Plan”, “Powering Up Britain—the Net Zero Growth Plan”, the 2023 green finance strategy, 2030 strategic framework and international climate finance strategy in the Libraries of both Houses.

I will continue to update Parliament on progress towards these aims.

Full list of publications

Powering Up Britain–The Energy Security Plan.

Powering Up Britain–The Net Zero Growth Plan.

NZGP annex–Technical Annex.

NZGP annex–Carbon Budget Delivery Plan.

NZGP annex–Government response to the CCC Progress Report.

NZGP annex–Government response to Net Zero Review.

2030 Green Finance Strategy.

2030 Strategic Framework for International Climate and Nature Action.

UK International Climate Finance Strategy.

Consultation on addressing carbon leakage risk to support decarbonisation.

Net Zero Research & Innovation Delivery Plan.

National Policy Statement.

Floating Offshore Wind Manufacturing Investment Scheme announcement.

Launch of floating offshore wind manufacturing investment scheme.

Consultation on the Clean Heat Market Mechanism.

Heat Pump Investment Accelerator Competition.

Launch of the draft scheme guidance and expressions of interest in the competition.

Patrick Vallance’s Pro Innovation Regulation of Technologies Review: Green Industries report and HMG response.

Government Response on Secure, Smart Energy Systems.

Strategy and Policy Statement for Energy.

Consultation on the draft SPS.

Power Bioenergy with Carbon Capture and Storage (BECCS) Government response to consultation on the power BECCS business model Cluster Sequencing Process Phase-2: Track-1 Project Negotiation List.

Cluster sequencing for Carbon Capture Usage and Storage (CCUS): Track-2 guidance.

Notice on announcing the shortlist for the first electrolytic hydrogen allocation round (HAR1).

Notice on announcing the Net Zero Hydrogen Fund (NZHF) strands 1&2 competition winners.

Consultation on Community Benefits for Electricity Transmission Network Infrastructure.