27 Oct The Implications of Another Biting Winter for the UK
Against the backdrop of escalating energy and climate crises, energy security concerns have grown in prominence among policymakers in recent years. Russia’s invasion of Ukraine in February 2022 turbo-charged this trend, sending wholesale gas prices soaring. While prices have since stabilised, Saudi-Russian oil production cuts and conflict in the Middle East threaten to drive up fuel prices once more. As we approach another biting winter, what will the implications of energy insecurity be for the UK, at a global, regional, and domestic level?
A Rewiring of Geopolitical Maps
Russia’s invasion of Ukraine magnified energy insecurity concerns and led to a considerable rewiring of the world’s energy maps, with nations forced to rely more heavily on non-traditional partners as conventional supply routes became less reliable. We have seen new partnerships emerging, from Italy and Algeria, to Japan and Namibia, with governments hard at work diversifying both their fossil fuel and renewable energy supplies.
This winter we can expect more of the same, with the threat of elevated prices likely to drive nations to continue to diversify their energy partnerships. While energy storage in Europe is approaching full capacity for this winter, policymakers are exploring deals with nations such as Egypt and Morocco, which hold burgeoning capacity, particularly in renewable fields, for years to come. And as nations that have traditionally focused on hydrocarbons diversify into renewable energy markets, the UK must compete with other fast-moving allies and rivals to secure the renewable agreements of the future and protect its long-term low-carbon energy supply.
The energy security crisis has also underscored the need for countries to seriously consider their strategic dependencies. The repercussions from Russia’s invasion of Ukraine demonstrate the risks of relying on nations with whom our interests and values aren’t wholly aligned, raising questions about the prudence of shouldering any more dependence on such players. But while the rewiring of global energy maps could offer the UK the opportunity to engineer a clean break from some uncomfortable and unstable dependencies, these considerations throw up complex hurdles for the UK. The UK’s energy relationships with the Gulf states, for example, are strategically important in limiting these nations’ alignment with China. Any decoupling risks dismantling some parallel strategic political calculations. The UK will have to continue to navigate a delicate balancing act of diversifying dependencies within the evolving geopolitical energy map, while still maintaining a number of divisive but critical relationships.
Strengthening UK-European Relations
Highlighting the necessity of open, cross-border coordinated action, the energy crisis seems to have marked an inflection point for UK-European relations. The UK played a significant role in filling gaps in European gas storage last Winter, and the UK re-entering the North Seas Energy Cooperation Platform last year as a technical partner signalled a key compromise from European powers, providing the UK with a seat back at the table. While Prime Minister Sunak will be cautious of significantly scaling up cooperation with the EU this side of the election, the extent of the domestic energy challenge may mean this is one area of UK-EU cooperation that Sunak feels comfortable enough to endorse, as the benefits are clear.
This is a trend we are already starting to see. In September, for example, the UK and Germany agreed to work together to accelerate the development of an international hydrogen industry, and the UK and Ireland signed two new Memoranda of Understanding on boosting energy cooperation. Looking forward, there are clear opportunities for alignment between the UK’s ambitions and those laid out in the EU’s REPowerEU package, such as routes to market for hydrogen, and commitments to capital investment in new offshore transmission grids – paving the way for closer technical cooperation in the field and beyond. The announcement that the UK will rejoin Horizon Europe also presents opportunities for academic collaboration on climate and energy innovation.
The rejoining of Horizon Europe is just one of a recent string of wider initiatives (e.g the Windsor Framework) that suggest we have entered a new phase in the post-Brexit UK-EU relationship. This, combined with the renewed pressure on energy security, suggests we can expect to see increased UK-EU coordination and support in the context of renewables investment and emissions reductions targets, as well as the possibility for such cooperation to transpire the energy field.
Domestic energy policy will take centre stage this winter, as the Conservative and Labour parties adopt increasingly divergent climate policies. While last month Prime Minister Sunak announced a scaling back of the UK’s climate activities, adopting what he declared a more ‘pragmatic’ approach to climate action, Labour used its party conference to sharpen its green credentials. With a harsh winter ahead, the relative prioritisation each party gives to climate action is likely to be an increasingly divisive issue. Given authentic commitment to climate leadership is not merely an electoral battleground but also crucial for the UK’s long-term economic and security resilience, the direction of policy travel this winter will also have a resounding impact on both the UK’s domestic and international agendas.
In any event, with energy prices and climate action at the forefront of voter concerns, energy policy will play a divisive role over the coming months. And as COP28 looms large on the horizon, our domestic policy choices will be scrutinised internationally. Time will tell whether the UK re-earns its status as an exemplar in domestic green leadership, or jeopardises its once carefully constructed cross-party green consensus.