Two-thirds of government’s strategic energy projects have ‘major issues’

More than two-thirds of the government’s major energy-related projects have a “major issue” which risks the project’s delivery.

In total, the Department for Energy Security and Net Zero (DESNZ) is responsible for delivering 19 of the government’s 244 major projects.

Of those 19 projects, only three are on track to be delivered on time and on budget, according to the National Audit Office (NAO).

Two of those relate to decommissioning activities at Sellafield and the third covers the installation of energy efficiency upgrades and implementation of low-carbon heating in low-income, on-gas grid homes in England.

The NAO’s overview of the department identifies one project as “unachievable” and a further 12 as having “significant issues […] requiring management attention”.

A further three projects – Sizewell C, deployment of CCUS in two industrial clusters, and the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme – are exempt from NAO assessment due to commercial reasons.

The delivery of replacing existing analytical facilities at Sellafield has been deemed as unachievable, while projects identified as having a “major issue” include the smart meter rollout, the Energy Bill Support Scheme and the Low Cost Nuclear Programme, relating to the development of small modular reactors (SMRs).

Despite the smart meter campaign running for more than a decade, the latest government figures show that at the end of September 2023, there were 33.9 million smart and advanced meters in Great Britain in homes and small businesses, accounting for just 59% of all meters.

A former director at Smart Energy GB, the national campaign behind the rollout, recently told Utility Week that money had been wasted on the campaign.

Meanwhile, there have also been concerns aired about the development of SMRs. Earlier this week, the Environmental Audit Committee told the government that its plan for SMRs lacks clarity and therefore risks increasing costs to the taxpayer.

It points out that as a final investment decision on the first SMR is not expected until 2029, it is unlikely that the reactor project will be contributing generating capacity to the grid in 2035.

With the government aiming to have decarbonised the grid by 2035, the cross-bench group of MPs raise concerns about the role that SMRs will therefore play.