Looking ahead to the UK energy strategy

All three corners of the energy trilemma are in sharp focus right now. More and more people are facing affordability challenges with their bills, the war in Ukraine highlights the need for energy security, and the dangers of climate change are better understood than ever.

This means the choices that we make now are critical– not just for this winter, but for decades to come.

It’s clear that zero carbon now supports the other two points of the trilemma: more renewable generation reduces Europe’s reliance on Russian gas, and lowers our energy bills. That’s why I am encouraged by the UK Government’s commitment to clean energy at the heart of its forthcoming energy security strategy. Net zero is achievable and affordable, and is a clear route to long-term resilience. And with the right approach, we can create huge opportunities for economic growth and jobs across the country.

But to achieve this we need a laser focus on delivery, plus a shift in mindset across industry, Government and the regulator.

With the UK Government’s strategy due to land shortly, these are the three areas I will be looking out for:

1. Making sure we are well prepared in the short-term

In the UK, our gas supply is from diverse and reliable sources, with the North Sea contributing the biggest share. But we see high and volatile prices because we are linked to continental Europe and global gas markets.

Short-term actions to reduce gas demand – for example energy efficiency measures in homes and maximising alternative supplies for electricity generation – should help to lower our exposure to these fluctuations.

2. Accelerating clean energy supply

At the same time, there are clear actions for Government to get more clean energy onto the system to further boost our longer-term resilience.

Networks are a critical enabler in the mission to transform our energy system, so as we plan more low-carbon generation, we must also plan the network infrastructure that will plug these in and get the energy to where it’s needed.

Offshore wind, for example, will really shift the dial in delivering home grown energy onto the system. To maximise this opportunity, we must focus on three key areas to unlock barriers to delivery:

• What needs to be built – National Grid’s Electricity System Operator will publish in the summer a network ‘blueprint’ for the projects needed to support offshore wind connections. This must be backed by the Government and Ofgem, to give confidence not just to project developers, but to the communities who will house this infrastructure.
• Who is building it – for the majority of projects required to connect 40GW of offshore wind, there is a lack of certainty over who will deliver them. The sooner we get this clarity, the quicker the projects can be built. And National Grid stands ready to deliver.
• Building it quicker – one of the major blockers to investing at pace is the planning system. We need an accelerated approvals process for offshore wind and the onshore transmission infrastructure to deliver it, with clear actions to expedite progress. For example, the network ‘blueprint’ should have sufficient weight in the planning and regulatory processes to support decisions within the relevant authorities. We can also better align the regulatory approval and planning processes to make things faster overall.

3. Setting up for long-term success

Understandably, the focus of policy-makers is on the here and now. But we must not lose sight of the foundational reforms to ensure the UK’s energy system is set up for success out to 2050.

The strategy must deliver the right underpinning institutional governance, regulatory regime and market frameworks to support and drive forward investment in the next phase of the energy transition.

There are also strategic questions about how benefits and opportunities are maximised for consumers and communities throughout the energy transition – ensuring no one is left behind, and that we attract new and diverse talent into the sector, to make sure the right skills are in place.

It's clear that we need decisive action, clear policy and focused collaboration to tackle the energy challenges of today and tomorrow, and National Grid stands ready to play its part.