Amid the omnishambles of domestic politics and the horrific violence against civilians in the Middle East, the war in Ukraine – the largest European land conflict since the Second World War – has been relegated to second-order status, and Western publics are showing signs of war fatigue.
But the effects of the war on global trade and energy supplies have not diminished. When Europe cut off imports of Moscow’s abundant gas supplies, it led to an energy shock that engulfed the continent. Global supply bottlenecks that had emerged as the world tentatively eased its Covid-19 lockdowns were exacerbated by the biggest jolt to fossil fuel markets since the 1973 Yom Kippur War. Just as it did in the 1970s, the energy crisis put rocket boosters on a period of runaway inflation. In response, Liz Truss’s short-lived government pledged tens of billions in household subsidies, and prices today remain 59 per cent higher than in winter 2021/22.
This is the crucial context in which the Energy Security and Net Zero Secretary, Claire Coutinho, announced this week that the government would back new gas power plants. “The UK banned Russian fossil fuels, making sure we were no longer contributing to Kremlin coffers,” she told an audience at Chatham House in London.
Coutinho said that £100bn had been spent supporting businesses and households, and that the future prosperity of the UK rested on access to “homegrown” energy, talking up the government’s commitment to renewables, offshore wind, the “world-renowned” contracts for difference auctions, as well as the importance of North Sea oil. “Make no mistake”, she warned, “we are in a global race for energy.”
And she’s not wrong. Global energy flows have been reordered. In the Green Transition last month, Will Dunn explained how a Donald Trump victory in November would give the Republican hopeful unprecedented control over Europe’s gas. Tons of the stuff, in liquified form, have kept the lights on all over Europe. Even with this shift from pre-war, pan-Eurasian energy flows towards Transatlantic trade, Germany has entered a period of “deindustrialisation” with a new “Rust Belt on the Rhine”. Berlin’s coalition government has been unable to smooth out the crisis for the country’s car manufacturers and chemical giants, which were once reliant on a flow of cheap Russian gas through the Nord Stream pipeline. The energy woes of Europe’s largest economy have not been helped by the decommissioning of nuclear power stations at the behest of Chancellor Olaf Scholz’s Green coalition partners. Germany’s economy is forecast to continue its slow contraction this year while Russia’s will grow.
What does this mean for Britain and our green transition? The independent Climate Change Committee has stated that it does regard “a small amount of remaining unabated fossil gas capacity in 2035 as compatible with a decarbonised power system”. Similarly, the Green Alliance think tank has predicted that gas will continue to be used as a “dispatchable bloc” even after we’ve achieved net zero. The problem with an entirely renewable grid is that we’ll always need an alternative source of energy for when the wind doesn’t blow and the sun doesn’t shine.
But all is not what it seems. Experts at the Green Alliance have also stated that gas plants should use carbon capture and storage technology, something the government has said it does not include in its plans. The think tank also points out that a new set of gas power stations “means further reliance on imported gas subject to volatile prices on the international market”. Rather than securing our energy supply, it leaves us more dependent on authoritarian petrostates.
Aside from Russia, lot of the UK’s gas imports in recent years have come from Qatar – a country that has suspended trade through the Red Sea in response to Houthi attacks. The Gulf state is an autocracy that has been accused of having links to Islamist terrorism. When Rishi Sunak wrote in the Telegraph this week to decry an energy supply dependent “on the whims of dictators”, he wanted to evoke images of a former KGB agent turning off the gas. Yet the Prime Minister could just as easily have been talking about our strategic allies and trading partners in Doha.
Industry lobbyists push gas as a “transition fuel”, and the government seems to have bought the line. So what’s the alternative? Proper investment in renewables, along with energy storage and hydrogen power, would be an improvement, and a report last year by the Green Alliance said that along with nuclear, “new technologies like enhanced geothermal, wave and tidal power may also play a role” in the provision of on-demand electricity. Coutinho and Sunak’s announcement highlights their true priorities, however: In the very real “global race for energy”, rather than spurring a boom in green growth, local regeneration and jobs and skills by investing in secure, clean energy, the government is still very much committed to the status quo.
*This article was originally published as an edition of the Green Transition, New Statesman Spotlight’s weekly newsletter on the economics of net zero. To see more editions and subscribe, click here.
Content from our partners
Related
