Energy independence can be achieved but fracking isn’t the solution

The past few weeks in British politics have been a case of nearly unprecedented upheaval in what should’ve been a simple handover of power. With the Queen’s death, energy price guarantee and mini-budget, the fallout of which continues to dominate the headlines, a just as significant announcement has failed to shape the national debate. The government has, as a result of the European energy shock, announced it intends for Britain to reach energy independence by 2040. This involves a bid to speed-up renewable energy development, possible energy market reform and, more controversially, new North Sea oil and gas licences in addition to lifting the ban on fracking.

Firstly, regardless of its energy implications, lifting the fracking ban is likely to be a political headache for the government in the coming years. The Conservative Party had pledged in their 2019 election bid to effectively maintain the ban on fracking and, politically, the move made complete sense. Around 44% of the public are strongly opposed to fracking being conducted in the UK, many in northern constituencies are now key battlegrounds between Labour and Conservative. Angering such voters, especially with a policy that can be considered a breach of the last election manifesto, may endanger the coalition amassed by Boris Johnson of Southern Tory heartlands and former Labour seats in the North. The even bigger problem the government faces, however, is that despite the unpopularity this decision may cause, is that it may prove disappointing in terms of energy production as well.

Even with the fracking ban lifted, UKOOG, which represents fracking firms, has warned that existing regulations threaten the ability of the industry to hit the ground running and produce significant quantities of gas. This refers, in particular, to the rule which mandates fracking ceases if earthquakes of 0.5 magnitude or higher are triggered. As such, in conjunction with lifting the ban, the government has announced a review into this limit and whether it should be raised. Although this may make fracking easier for companies, the problem here lies that fracking is still only permitted with local support. Removing or watering down a rule that’s designed to reduce the risk of severe tremors from gas exploration is unlikely to galvanise support for an already deeply unpopular policy. Groups like Frack Free Lancashire are already warning that there will be a “huge backlash” if the rules are changed.

The enormous reserves of shale gas capable of granting Britain energy independence are disputed in size too. Although the British Geological Survey claimed that the Bowland-Hodder shale reserve could contain as much as 65tcm, another report just six years later only found as much as 4tcm, 94% less than previously thought. Chancellor of the Exchequer Kwasi Kwarteng agrees with much of this criticism too. Less than a year ago he expressed that “it would take up to a decade to extract sufficient volumes” and that it wouldn’t “be enough to lower the European price”. What’s more, is that there is significant unease within the scientific community over the UK’s viability as a fracking site. Professor Peter Styles, who wrote a review on fracking following a 2011 moratorium, notes that geologically there are far more faults in the UK than in the US making it much more difficult to frack safely, something corroborated by Stuart Haszeldine who stated it “was never going to work”.

So if fracking is too unpopular, difficult and largely irrelevant in easing the current energy crunch, can the government’s hopes of energy independence even be achieved? The answer is yes but this opportunity lies fundamentally in renewable energy and not fossil fuels. Writing in the Energy and Environmental Science journal, researchers found that an entirely clean energy grid would reduce energy costs by around 63% and pay for itself within six years. The power of renewables to lower energy costs has been demonstrated during this energy crisis. The UK’s renewable mix has already limited the degree of exposure to the gas price rise by reducing national demand for gas when it comes to electricity. The problem is that the UK hasn’t gone far enough already. On solar power, the Netherlands generates 2.5 times as much as the UK and solar generation has actually fallen by 3.5% since 2019. At this point in our fight against climate change, we should be moving forward quickly, not stepping back. Already, by effectively blocking new onshore wind farms and, therefore, cutting the capacity for renewable energy growth, household bills are £2bn higher than they should’ve been with expanded onshore wind.

Furthermore, regarding renewable energy as a central feature of an energy-independent Britain, Survation has found that there is significant public support for clean power. More than three-quarters were found to support local production with 84% of Conservatives in favour of wind and solar being developed further as part of a drive to reduce energy bills. Given this support when compared to fracking, it’s clear that this is not only more sustainable and effective as a source of energy but will also enjoy greater backing from the people where development may be necessary.

This compares quite favourably with the ability of fossil fuels to take Britain out of its current crisis. Even taking the environmental implications aside, which alone should be reason enough to block further oil and gas projects, North Sea production is uneconomical and unable to do anything now. Truss’ plans do give new permits for North Sea exploration that are targeted at mature areas where infrastructure already exists, enabling, according to the North Sea Transition Authority, up to 80% less time being spent between license to production than the average. However, most sites produce too little to affect the UK energy market let alone the European price for gas that we’re paying for. Westwood Global Energy Group has found that, although some production may indeed be possible within a year, the larger fields like Jackdaw and Rosebank, capable of significant output, are unlikely to produce any oil and gas until 2026 and 2027 and that, as a result, the Office for Budget Responsibility doesn’t expect gas prices to return to ‘normal’ for years, remaining 400% higher than average even into 2027.

This begins to address a second goal of the UK’s energy independence drive that must be prioritised: energy efficiency. The crisis caused by the war in Ukraine regarding gas supplies has hit the UK hard as European providers struggle to supply the gas needed to heat our homes, 85% of which depend on gas heating. This comes predominantly from its older and more poorly insulated housing. With almost a fifth and over half of homes built before the end of World War One and 1965 respectively, British homes are far more inefficient at conserving heat than almost any other in Europe, losing heat nearly three times as fast as those on the continent. Moreover, the Energy Saving Trust has found that around 30% of heat is lost just due to poorly insulated walls. Given the record high gas prices, cutting energy use this winter must be a policy priority. This position has also been emphasised by Keith Anderson, chief executive of ScottishPower, who had been influential in bringing about the energy price freeze, calling for better insulation and heat pumps to lead the way regarding energy efficiency.

The problem is that there were nearly 63 times as many gas boilers installed in 2018 as there were heat pumps despite being three times more efficient. The reason? Price. The difference in cost when installing a heat pump over a gas boiler can be as much as £23,500 which for most is simply unaffordable, especially at this time. As such, the lack of proper insulation and green homes in the UK comes particularly down to a lack of government support for home improvements. Schemes have been set up in the past but have failed to last with the recent Green Homes Grant stopped after a lifetime of half a year and improving less than 8% of the homes it expected to. The government’s boiler upgrade scheme, another way households can remove inefficiency from their own homes and save on bills, is only set to assist 90,000 households over the next three years. To fundamentally cut in particular the UK’s demand for foreign gas, government measures on energy efficiency are essential in a market where costs are still too high for most households to make improvements to their property. Decarbonisation may not be cheap in the short-term when regarding investment in clean energy, insulation and transport but will ease long-term costs with the UK set to save £5bn a year in fuel alone according to the Climate Change Committee.

In addition to greater investment in energy production, reform of the energy market has also come to the fore given the scale of the crisis that the industry is facing. One proposal is to decouple the price of electricity from renewables from the wholesale market, given the sharply lower running costs of clean energy especially compared to gas at the moment. The benefits of such reform are clear. Given the UK’s energy mix which has already made significant strides regarding particularly wind generation, Energy UK estimates this could knock £250 a year off household bills and save businesses around £11bn, potentially even more in 2023. However, the problem with this is that many renewable companies aren’t in a position to decouple much of their power as most have already sold up to half of their output for next year, significantly reducing these expected savings for companies and families. What’s more is that, by announcing new long-term contracts now, the reform could, if and when wholesale prices fall back closer to the long-term average, guarantee large windfall profits for generators and, by extension, present a poor deal for households once the immediate crisis subsides.

The reality is that any hopes of reaching energy independence by 2040 rely heavily on encouraging and supporting renewable energy production that can, combined with an ambitious programme to improve the energy efficiency of Britain’s homes, lower the nation’s reliance on volatile oil and gas imports whilst protecting its much-needed climate commitments. Whether it can actually be achieved by 2040 in this way is unclear but what is certain is that we won’t be able to frack our way out of this.