The Energy Independence Plan – what we know so far

By Imogen Shaw

During yesterday’s PMQs, the Prime Minister reiterated his promise that a new Energy Independence Plan is imminent – most media reports are suggesting that it could come as soon as next week, although it is possible that disagreements on policy direction within the Cabinet could result in the release of the plan being pushed back to the week after next.

The announcement has ignited debate within government over what the plan should include, and which measures are likely to reduce UK exposure to Russian oil and gas, and high and volatile wholesale gas and oil prices, most quickly.

In a press conference earlier this week, the Prime Minister stated: “One of the things we are looking at is the possibility of using more of our own hydrocarbons, and you’ll have heard already about what the Business [BEIS] Secretary has had to say about licences for UK domestic production….That doesn’t mean we are abandoning our commitment to reducing CO2 … We have got to reflect the reality that there is a crunch on at the moment. We need to intensify our self-reliance as a transition with more hydrocarbons.”

Although the full content of the plan has yet to be confirmed, Boris Johnson and BEIS Secretary Kwasi Kwarteng have signalled a desire to balance ‘net zero unfriendly’ measures, such as increasing North Sea output, with measures to boost the UK’s domestic green and nuclear energy generation capacity.

It has been reported that a number of pro-net zero voices within the Cabinet are concerned that the announcement of the plan may give succour to the Net Zero Scrutiny Group, whose campaign for a re-think of the UK’s net zero target was boosted over the weekend by Nigel Farage’s announcement that he is launching a campaign for a net zero referendum.

While many have pointed out that a referendum on net zero is unlikely to prove feasible, reports suggest that in response to the weekend’s news, concerned Cabinet Ministers have been lobbying for the inclusion in the Energy Independence Plan of measures to remove planning blocks to onshore wind development in England; boost the UK’s solar and offshore wind capacity; and ramp up hydrogen production. They have also urged the Prime Minister to continue to stand firm against calls from the Net Zero Scrutiny Group to lift the UK’s ban on fracking.

Johnson himself has been keen to frame the increased focus on North Sea production not as a backward step, but instead as a necessary move to ease the transition to renewables and nuclear. While pressure from those within his party who would challenge his government’s net zero agenda appears to have had some influence on the pre-briefed content of the Energy Independence Plan, it is clear that Johnson views net zero as a central plank of his governing agenda. He and the Cabinet’s other net zero advocates remain eager to push the message that getting to net zero is in the interests of national – as well as economic and environmental – security.

Climate change consistently polls as an issue of serious concern amongst people in Britain, and the reactions from green groups to the idea of increasing North Sea output have, predictably, been highly critical. However, of more pressing immediate concern for bill payers is the rapidly rising cost of heating their homes. This, too, has spurred heated debate within the Cabinet, with Kwasi Kwarteng rumoured to be at odds with Chancellor Rishi Sunak over the Treasury’s proposed energy bills rebate scheme.

Politico reports that the Prime Minister has asked BEIS to explore some alternative arrangements. Options reportedly on the table include doubling the rebate from the current £200 and delaying the start of the loan repayments, currently set to commence in 2023. BEIS has apparently also mooted the creation of a more generous rebate for poorer households.

When the Energy Independence Plan is released in full, where the government has landed on these key decisions will have significant implications for the direction of its energy policies in the longer term – and it is likely to be revealing as to where the balance of power within the Cabinet currently lies.