How does Ukraine affect power generation here?

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Published:
6:30 PM March 12, 2022



A major international crisis like Russia’s invasion of Ukraine has enormous implications and ripple effects beyond any of the immediate and ongoing costs of dire death and human suffering.

The events that took place there touched our hearts and generated remarkable momentum from the local people in the form of offers of financial and practical assistance.

But these events will also directly impact households here by adding to their cost burdens. Significantly higher wholesale energy costs due to the crisis will have a direct impact on national electricity bills, which were already rising.

These effects are being felt now, but will continue to be felt for months and years as well, particularly if international threats to boycott Russian oil and gas materialize and hold.

The UK is not particularly directly dependent on buying energy from Russia, but ultimately the global energy market is just that – it is ultimately about a market, so the effects on one part of the market will be felt throughout and are likely to be long-lasting.

The Ukraine crisis and the moral and geopolitical need it generates to act against an aggressive Russian state led by Putin is causing real additional pressure on an already strained energy market.

Work already underway to reduce our dependence on fossil fuels for the good of the planet adds another major and urgent element to what was already a very complex picture.

The UK government has already responded by resuming an urgent review of the energy supply mix and working on a new energy strategy.

There is a renewed look at all possible sources that will meet the demands of the new international situation and work towards the government’s net zero goal while reducing costs to consumers as much as possible.

In this context, a spokesperson for Downing Street indicated on Wednesday that the British moratorium on hydraulic fracturing could be lifted.

The spokesman said: ‘Everyone would expect the Prime Minister to look at all of our options.

Thus, as part of the energy strategy review, the government will examine all forms of electricity generation that reduce dependence on Russian oil and gas and are at the same time effective in combating climate change.

This will reinforce the urgency of developing renewable energy sources, an area in which the East of England is particularly strong, including recent planning for the Norfolk Vanguard and Norfolk Boreas offshore wind farms.

In this context where the need and the pressure are even greater to develop other forms of energy, the desire to include a greater contribution of nuclear power in the energy mix can only grow.

Prior to this latest review, the government had already committed to making a decision on a new nuclear power plant in the short term.

In the Autumn 2021 Budget and Expenditure Review, Chancellor Rishi Sunak said he would invest “£1.7 billion to enable a final investment decision for a large-scale nuclear project within of this Parliament”.

The whole race for this development of the next big nuclear project is of course based on the planned Sizewell C power station on the east coast of Suffolk.

It should be emphasized that no final decision on whether to greenlight Sizewell C has been made, but all steps leading up to that final decision have been and are ongoing.

The latest follow-up information has been submitted, corporate and management changes have been made and the Planning Inspectorate’s report with its recommendation on the future of the power station project was due for government consideration now. All of these factors, plus some degree of local opposition to the project, must be considered and judged.

At the end of January, Business and Energy Secretary MP Kwasi Kwarteng visited the Sizewell site and announced further financial support of £100million for the development of the project – the money would support it and prime the pump to attract new investment from private investors.

But of course since then Vladimir Putin has ordered his forces into Ukraine and the world has changed and with it the urgency and scope of the government’s agenda, placing the Sizewell C decision in the middle of the wider energy review.

It will also have changed the way of thinking of potential investors, looking at energy investment opportunities in a range of countries and international projects. The demand for alternative energy sources is greater, but so is the complexity of the picture to wade through to make investment decisions.

The events and their repercussions on energy are enormous, including the plan announced by the European Union on Tuesday to cut its imports of Russian oil and gas by two-thirds within a year. Currently, Russia supplies 40% of the EU’s gas – with Italy, Germany and other central European countries particularly dependent – and around 25% of its crude oil.

Instead, the EU, as European Green Deal Commissioner Frans Timmerman, said on Tuesday it would seek to reduce that dependence by importing more liquefied natural gas, rapidly increasing its production of renewable energy and seeking to use existing energy sources more efficiently. But he also admitted that countries might have to burn coal for longer instead of switching to gas, which would have meant future contracts with Russia.

With an energy future less dependent on oil and gas for general reasons related to climate change and specific reasons for not trading with Russia, the case for nuclear energy as part of the energy production mix becomes more difficult to challenge.

The Government’s £100million funding package provided that if the new Sizewell nuclear power station project did not go ahead the site would be set aside for alternative energy use, but the Sizewell C project is well advanced and there for an imminent decision.


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