The UK Energy Security Strategy – Welcome but we need short-term actions urgently

The BCC welcomes the Government’s new energy strategy and hopes it is the beginning of an effective long-term strategic approach to energy security for UK manufacturers. But while there was good news for electro-intensive sectors with the extension of compensation for indirect carbon emissions costs, there was no such help for gas-intensive manufacturers.UK ceramic manufacturers produce bricks, clay roof tiles and drainage pipes, refractories, sanitaryware, wall and floor tiles, tableware and giftware, and industrial ceramics. Advanced ceramics are used in a wide range of hi-tech products including computers, jet engines, lasers, X-ray equipment, radar, and medicine.The UK ceramics manufacturing sector was already battling with internationally uncompetitive energy and compliance costs before the Russian war on Ukraine but now faces even-higher gas prices. The sector is committed to working towards net zero but needs a government energy strategy that allows UK energy intensive manufacturers to compete on a fair basis, not against heavily subsidised overseas competitors or ones that have no regard for decarbonisation or human rights.The strategy has been criticised in the media for considering only long-term energy security solutions and not providing immediate answers that energy intensive industries need now. While the strategy does indeed focus on the medium to long-term, this is vital in and of itself so UK manufacturers know what a future energy landscape will look like. And it doesn’t preclude the Government taking further action urgently to support UK energy-intensive manufacturers now.Looking at what the strategy does say, let’s look at wind turbines and solar panels for instance. We are moving increasingly to harness the power of nature, and although they may form part of the energy equation, the current debate over on- versus off-shore turbines shows the uncertainly that surrounds even this solution.Love them or loathe them, we cannot fill our seas and fields with turbines but, even if we do, how do we transport this energy to where it’s needed? Can the national grid cope with the additional demands which will be placed on it?Industry in particular needs reliable energy, so what happens when the wind fails to blow or when it rages so strongly, we must turn off the turbines to protect them?As for harnessing the power of the sun, while solar panels undoubtably have a part to play, can it ever amount to more than a few per cent of demand in the UK?Fracking is back on the agenda but it will not happen overnight. The North Sea is being eyed up for more oil and gas. And there has even been talk of opening coals mines, but where are the coal-fired power stations? The answer is the existing ones are being dismantled.Nuclear energy does provide power 24/7, but how long will it take to deliver the eight reactors proposed? Even with the very ambitious plan to get them approved in this and the next Parliament, it could be many years before they are up and running. And of course, we return to the question of can the grid cope?Research projects are well under way to put hydrogen into the gas network but leaving aside how that squares with stopping new houses being connected to the gas networks, there is the serious question of whether UK ceramic manufacturers can use hydrogen.Many BCC members are at the vanguard of research into how the industry can use hydrogen but it is not an easy solution. Not only are most UK ceramic factories located away from hydrogen and CCUS clusters but how will burning hydrogen interact chemically and physically with the clay? What impact will the hydrogen have on the metal burners and the refractory kiln furniture? There is a lot of research needed before hydrogen can simply be added to the gas supply to modern industrial processes.And with the typical kiln operating lifetime of 25 to 40 years, access to low carbon compatible infrastructure and equipment is needed by at least 2025 to keep the sector on track to reach net zero by 2050.If we do not solve the short-term energy crisis for industry, we risk simply offshoring manufacturing to countries with low environmental standards and poor reputations for human rights and working conditions. It will not solve the journey to net zero by simply pushing carbon production elsewhere.Publication of the strategy to solve medium and long-term energy issues is important, but unanswered questions remain over what happens in the short-term.The answer for today must in part be to support UK energy intensive industries with an easing of policy barriers as well as price control mechanisms to shelter our UK manufacturers from uncompetitive gas pricing.Rob Flello BCC Chief Executive