Law & politics

The UK Government last week laid out the domestic plan for its first year in office -prioritise housing and clean energy, in order to kickstart growth.

The duo in charge of these policies – Angela Rayner (housing) and Ed Milliband (energy), did not co-ordinate their announcements last week, and there is a feeling in energy circles that both policies may fall flat for the same reason – delays in generating clean energy to the places where housing is most needed.

Housing and energy are closely connected – you cannot build new communities until the power supply is in place. We know that there is currently a 10 year wait to connect new housing estates to the grid in some parts of the country, and a 10 year wait to connect a solar farm to the grid in others.

The government also launched its vehicle for its energy initiatives last week, Great British Energy, to be run by former Siemens executive Juergen Meier. it is going into the business of picking winners – but energy for housing does not appear to be in the list. £8.5b has been announced for it to co-invest with big industry players in the next generation of wind and solar farms. But these projects take years to start generating power. It took the best part of a decade to build the Hornsea 1 Windfarm, and that was AFTER planning permission was granted in 2014. So reforms to planning permission on which the government is currently consulting are unlikely to make much impact.
And the recent history of government energy deals shows the Civil servants charged with negotiations were ham-fisted and outmanoeuvred at every turn. The UK chair of French energy company EDF, Alex Chisholm, previously ran BEIS, the department that struck the deal for EDF to build a new nuclear power station in Somerset., as reported in the Guardian. “The agreement was made in 2016 with UK bill payers bearing the costs, which soared from an estimated £18bn to at least £31bn…. it is due to be completed in 2031 – about 14 years after EDF said it would be up and running.” In 2023, EDF was the leading company in the wholesale electricity generation market in Great Britain, with a share of 18.5 percent. The UK branch of the German company RWE ranked second last year, with a market share of approximately 17.5 percent
Data centres and EVs will gobble up all the new energy the grid can produce in this country for the next ten years.
Where does that leave the new housing starts that are so badly needed? How will they get their energy this year?
The big energy consumers will always need the grid, but for at least some new housing estates, electricity could be supplied from small local microgrids that do not need to be hooked up to the main grid …

In January, GE Hitachi signed a deal to build the first small modular reactor in North America, agreeing a deal with authorities in Ontario, Canada.

GE is among dozens of companies around the world with designs for small, factory-produced reactors. The theory behind mass-producing them is that development costs can be spread over many units to lower costs.

They are also cheap enough for private companies to buy, with the smallest versions being touted as a prospect for powering container ships.

Early leaders like Rolls Royce are falling behind because of slow Government decision-making on SMRs and their higher-tech cousins advanced modular reactors (AMRs), which are a few years further away in deployment.

Some developers have abandoned hopes of taxpayer funding, but without guidance from the regulator about how far off design approvals may be, and a site to show that their technology works, lenders are skittish about committing to big projects.

Without these assurances, orders and jobs are on the line. However, the industry is hesitant to attack governments openly, given the requirement to win Government approval (and funding). Governments tend to favor home-grown companies, whihc makes the GE deal suprising.

In the UK, for example, foreign-controlled Rolls Royce still has the inside track – a government spokesman said: “Small modular reactors could play a vital role in our nuclear programme as we work to increase our energy independence and security, reducing our reliance on fossil fuels and exposure to volatile global gas prices.

“The Government is investing in these new technologies through the £385m Advanced Nuclear Fund including £210m towards the Rolls-Royce SMR programme. We will announce plans for the set-up of Great British Nuclear soon, and we are committed to backing it with appropriate funding to support projects and investment.”

Tom Samson, chief executive Rolls-Royce SMR, said: “We have over 600 members of staff in the UK, dedicated to bringing our technology to market at pace – a British solution to a global energy crisis.

“Rolls-Royce SMR has called for rapid progress from the Government and we welcome the adoption of that principle in this process.

“We look forward to working collaboratively with Government and Great British Nuclear to realise their ambitions as quickly as possible.”…