The British government will prioritise new energy streams

BRITISH POLITICS was defined by the cost of energy in 2022. Prices soared as demand rebounded after the pandemic, then spiked viciously in the wake of Russia’s invasion of Ukraine. During their contest to lead the Conservative Party, Liz Truss and Rishi Sunak tussled over the level of support they would lend Brits with their energy bills, so that no one faced a choice between “heating or eating”.

The winter will still be painful and expensive, but once it is over, attention will turn in 2023 to expanding domestic energy supplies in order to keep prices down. The government’s energy-security strategy, published in 2022, presents a plan for the construction of new energy infrastructure for the next three decades—and 2023 is the year it all gets started.

The location of a new nuclear-power station is due to be chosen by 2024, but rising interest rates will make such projects pricier. The cost of capital already makes up over half of the cost of Hinkley Point C, a nuclear plant being built in Somerset. That cost is set to rise.

Britain will also build on its successes using offshore wind turbines to generate electricity. It plans to quadruple offshore wind capacity by 2030, to 50 gigawatts. That is enough power (when the wind is blowing) to supply every home in Britain. To accomplish this, from March 2023 it will begin holding auctions annually (not, as now, every two years) in which energy firms bid to offer the government the best price for the installation and operation of new turbines. Solar-power contracts, which hitherto were offered only at some auctions, will also be available every year from 2023.

Renewables are not the only piece of the energy-supply puzzle that will expand. New oil- and gasfields, such as Jackdaw, off the Scottish coast, will be under construction all year. Drilling is due to start on Jackdaw’s first wells in the second half of 2023. The Rough gas-storage facility, off England’s east coast, will be back in action, having been retired in 2017, storing enough natural gas for Britain to weather weeks of supply constraints.

New oil and gas facilities will not necessarily come with high levels of carbon emissions. Shell, the firm behind Jackdaw, plans to capture the carbon dioxide created when its gas is burned and inject it back under the North Sea, into a depleted gasfield called Goldeneye. The government wants new supplies of fossil fuels to come with similar schemes.

Politics will remain deeply entwined with energy supply in Britain in 2023. The government will have to be involved with the financing of any new nuclear plants if they are to get off the ground. The Labour Party has promised to go even further if it wins power, and set up a publicly controlled energy company, like France’s. Both main parties agree on the need to spend heavily to create an energy system less vulnerable to global shocks.■

Hal Hodson: Special projects correspondent, The Economist

This article appeared in the Britain section of the print edition of The World Ahead 2023 under the headline “Not in the pipeline”