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Energy Security and Net Zero Secretary of State Grant Shapps outlines his departmental priorities in new drive towards greater energy independence.
Good afternoon everyone.
It is great to be here at 10, St James’s Square. Famous not just as the Chatham House headquarters of course, but also the home of three ex-Prime Ministers.
Including two eminent Victorians ones, the Earl of Derby, and William Gladstone, whose terms in office spanned a period of phenomenal economic growth during the second half of the 19th century.
Of course, there were many different reasons for that growth, but the real powerhouse behind the Industrial Revolution was a single commodity – coal.
For so long, cheap and abundant needed in such enormous volumes as industry expanded that by 1900, coal powered an incredible 95% of the British economy.
Causing some to fear that supplies could run out. Bringing booming Britain to an abrupt halt. Economist Stanley Jevons wrote a book, predicting the likely exhaustion of our coal mines. The Times and the Economist published articles about it.
And yet, in the race to industrialise, no-one addressed our complete reliance on just one source of domestic energy. Or what was assumed to be one of our greatest strengths, and how that could become one of our greatest vulnerabilities.
Because energy security was simply not a priority.
Today I want to explain why this backstory has parallels with modern Britain.
And how we will learn from our past mistakes, to deliver my ambition as Energy Secretary for wholesale electricity prices to become amongst the cheapest in Europe.
Despite those dire warnings about coal’s longevity during the Gladstone era. We know that it became a far more enduring power source than anyone could possibly have imagined.
Indeed, thanks to Putin’s illegal invasion of Ukraine 12 months ago, it’s even experienced a brief revival.
Although Britain has slashed her coal use from 40% a decade ago, to less than 2% today. Some countries are reopening mothballed coal plants to replace Russian gas. We’ve kept two or three of ours on standby – but thankfully have not had to use it this winter.
We hope, for the sake of our climate, that coal’s renaissance will be very brief.
Just as we pray – for the sake of the brave Ukrainian people – that this appalling, pointless war is over before too long.
Putin has achieved nothing from marching into a sovereign nation, beyond disrupting energy supplies and hitting families with higher bills, killing thousands and displacing millions
In every way, his reckless gamble has fallen apart.
His military catastrophe. His miscalculation of the West on whether we would be divided. His spectacular undermining of his own country’s interests.
The past year has shown that Russian fossil fuels – like Putin himself – belong in the past.
The fallout from this tragic conflict may have caused us some short-term challenges and we know that it has. But ultimately, Putin’s war will just hasten the energy transition we all want to see
Indeed, actually I’d go further. I’d say it marks a crucial turning point for Britain’s energy resilience.
Never again will we be held to hostage by a tyrant.
Never again will we allow our energy security to be threatened.
And never again will we let one man hit the pockets of every family and business in Britain causing the government to step in and pay half – half – of a typical household energy bill.
Instead, by accelerating plans to diversify, decarbonise and domesticate our energy supplies, we will take back power.
And reform our energy market. To secure cheap, clean energy that Britain needs to prosper.
So, creating the Department for Energy Security and Net Zero is a clear statement of intent from this Government.
Nearly twice the size of the old Department of Energy and Climate Change.
The new Department can now give energy and net zero the full and dedicated attention they palpably deserve.
So, Chatham House, here are my main objectives as Secretary of State:
To set Britain on a path to energy independence, in other words, delivering energy security.
To bring bills down as soon as possible, and keep them down, so wholesale electricity prices are among the cheapest in Europe, delivering consumer security.
To decarbonise energy as part of our commitment to net zero, delivering climate security.
And to play our part in reducing inflation and boosting growth, delivering economic security.
Distinct though these may be, each of these four objectives are closely entwined.
Each one depends on the success of the other three.
So a key mission for the new Department will be to work across different disciplines, and make best use of our expertise.
But they also feed into the Prime Minister’s five priorities for Britain, in particular to halve inflation and get our economy growing, to build a strong, stable and prosperous future, thereby reducing debt in the medium term, for our country.
I’m the first to admit the challenges we face are considerable. For decades, Britain has been increasingly reliant on polluting, imported fossil fuels. We’ve neglected investment in other forms of power, and in partiuclar in nuclear power.
And that has left us more exposed to volatile international energy markets.
The government has stepped in this winter, as I have explained, paying half of a typical household bill and a third of a typical business bill, even if many people perhaps don’t realise that’s what we’re doing in the face of rising prices
I will continue to fight on behalf of the consumer – just as I’ve done recently with the pre-payment meters scam. But to address the main objectives I’ve set out.
We must wean ourselves off fossil fuel imports. And remove the direct link between gas prices and renewables. And replace them with cheaper, cleaner, domestic sources of energy.
Powering more of Britain from Britain.
Let’s not forget what we’ve achieved already.
We were ranked top 3 in the world last year for clean energy investment – only the US and China, obviously much larger countries, were higher.
We are a global leader in offshore wind power – with the world’s largest offshore wind farm. And the world’s second largest. And the third. And fourth largest.
And we’re pioneering many breakthrough energy technologies, through our open ecosystems. We have so much to promote here in Britain.
The thriving tech sector. Our world class universities. and the North Sea, described recently by the Economist as “Europe’s new powerhouse”.
Plus, our position outside of the EU gives us the freedom to regulate and deregulate, and build our business-friendly environment.
So, we can and have increased energy security whilst decarbonising faster than any other industrialised nation. We expect growth in offshore wind to support 90,000 jobs directly and indirectly by 2030.
And we’re developing the next frontier in this exciting industry. floating offshore windfarms – Currently the only operational ones in the world for example, is in the Celtic Sea around Cornwall and Wales.
Proving that Britannia still rules the waves!
We have incredible potential in areas like carbon capture and hydrogen. Carbon capture clusters, and exporting the technology, could support 50,000 UK jobs by 2030, with the backing of our £1 billion CCS Infrastructure Fund.
Hydrogen hubs like places in Teesside, bringing back investment to areas that experienced significant decline during the 20th century
And we promise sustained growth for the future.
And we’re not just concerned with creating new jobs.
Through our North Sea Transition Deal, we’re helping to decarbonise oil and gas and protecting thousands of existing jobs as well. So, bringing all this work together through the Energy Security Bill – the vehicle for delivering our strategy.
It will modernise the way that we heat people’s homes.
It will turbocharge British technology.
And it will liberate private investment, scaling-up jobs and growth.
But this is not just all about government, of course. My new department will be working flat out to fire up private investment in our energy transition.
A couple of weeks ago I was meeting with Bill Gates to discuss how green energy opportunities can work here in Britain. He was hugely impressed by the drive and innovation, the political will which is not universal throughout the rest of the world, to transform energy security.
His ‘Breakthrough Energy’ initiative was founded in 2016 to invest in fledgling green clean energy projects that have enormous potential. It’s just the kind of stimulation we need to scale-up green energy businesses in the UK.
But alongside all of those renewables, I am also firmly committed to nuclear within our future energy mix.
We’re progressing with the construction of Hinkley Point C, and driving forward Sizewell C, a sister project that I funded at the end of last year, which could be powering the equivalent of six million homes and supporting 10,000 jobs – it’s the first time in 40 years public money has been committed to nuclear in this country.
And we’re setting up Great British Nuclear, to produce a resilient pipeline of projects, so it is not the last. I’ve appointed the country’s first ever nuclear minister in Andrew Bowie – already dubbed ‘Atomic Bowie’ within our department.
All of this together will help us to meet those legally-binding target of net zero by 2050.
As well as creating new green energy and jobs of tomorrow, we must make sure that we energy efficiently today. Our goal is to cut energy consumption from buildings and industry by 15% in this decade.
Backed by £6 billion funding between 2025 and 2028, on top of £6.6 billion provided in this Parliament. This winter I know has been incredibly difficult for households across the country.
Thankfully, there are now signs of the wholesale gas price coming down. But if anything positive has come from the past few months, it’s built awareness of the need to increase efficiency of energy use. An awareness we must develop, even when energy prices return to normal.
Because the “Net Zero” part of my Department’s title is really just the flip side of “Energy Security”.
All too often I think in the green debate in this country, it has been framed by a tiny minority of people who glue themselves to motorways. But that’s not the future when it comes to tackling climate change.
I see decarbonisation as a fundamental, and mainstream aspect of everything we do.
With hindsight, then, we can perhaps forgive Gladstone and Lord Derby for neglecting energy security. Coal supplies had long been considered inexhaustible.
And there was little concern for or even recognition of environmental impact as Britain’s economy boomed at that time. Today, by contrast, we have many compelling reasons to think differently.
Putin’s invasion of Ukraine demonstrated something that the UK already appreciated – fossil fuels are not the future. Instead, greater energy independence, by investing in renewables and nuclear, is the way to ensure aggressors can never again hit people’s energy bills.
And this reason alone is justification to overhaul our energy strategy.
But when it’s also critical to achieving net zero.
And creating hundreds of thousands of green jobs to level-up Britain. Then we must address energy security with much greater urgency and resolve.
Those Victorian Prime Ministers were lucky, fears over coal reserves were ultimately unfounded as we know.
But we won’t take a chance on our energy security again.
This time, we’ll choose the responsible path.
Make the right decisions.
For our environment.
For our prosperity.
And for our children’s future.
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Chatham House speech on greater energy independence – GOV.UK
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