Security plan: Kwarteng rebuffs energy efficiency critics

Kwasi Kwarteng has expressed “surprise” at criticism that the government’s energy security strategy contained too little focus on energy efficiency, arguing that the matter was dealt with in last year’s Heat and Buildings Strategy (HABS).

Last Thursday, the business and energy secretary unveiled the government’s 12-page British Energy Security Strategy.

Despite featuring a significant section on energy efficiency, the strategy contained no new measures aside from a pledge of up to £30 million for a competition to encourage UK heat pump manufacturing.

Kwarteng’s ministerial colleague, Lord Callanan has subsequently admitted that the Treasury blocked further spending on energy efficiency and expressed regret there had been no more cash for insulation in the energy security strategy.

The lack of support for energy efficiency sparked widespread criticism across the sector on the grounds that reducing demand would provide the greatest immediate benefits in terms of improved energy security.

Kwarteng was pressed on why the government had not gone further by Aurora’s managing director Dan Monzani during the consultancy’s latest podcast, which was published at the end of last week.

The secretary of state expressed “surprise” that “knowledgeable commentators made that point”, arguing that last year’s HABS was a “whole document published only last year on the precise question of energy efficiency”.

“The security strategy was about security of supply and generating capacity, focused almost exclusively on electricity generation and power supply,” he remarked.

Kwarteng also said the new target to increase offshore wind capacity by a further 10GW to 50GW by 2030 is “stretching” but “doable”.

He said the currently ongoing fourth Contracts for Difference (CfD) allocation round is expected to bring the total capacity of offshore wind in operation, under-construction or with support to around 28GW. The secretary of state additionally highlighted the government’s commitment to hold annual CfD auction rounds from now on and its decision to set a higher target for floating offshore wind, opening up fresh offshore areas.

And Kwarteng told Monzani that potential greater reliance on coal next winter does not mean abandoning the UK’s pledge to phase out this type of generation by 2024.

“We can still maintain 2024 regardless of whether we use more coal this winter or not,” he said.

He also expressed hope that the comprehensive review of electricity markets, announced in last week’s strategy, will look at more locational and time-of-use price signals within the wholesale market in order to integrate more electrical vehicles and wind.

But he said major regulatory interventions to cap the prices that gas generators can set, as proposed by the Spanish government, are not in tune with UK thinking.