We summarise the key energy pledges in the Government’s manifesto at the base of this article in which Anders Lorenzen, writing for Fuel Oil News, considers what the change of government might mean for the energy sector.
Net zero, climate, energy and energy transition policies are all buzzwords frequently thrown around by politicians to describe what they are doing to tackle climate change.
Both the major parties have previously underlined their commitment to tackling climate change and decarbonising the economy, with the former Prime Minister and Conservative party leader, Rishi Sunak, adopting a position of delivering a pragmatic net zero, while the new Prime Minister, Labour leader, Keir Starmer, has promised to “make the UK a clean energy superpower by 2030”.
Oil, gas and a little bit of coal
One of the key elements in the energy transition is how fast we should move from fossil fuels to clean energy, and how that transition is best achieved while protecting the economy.
Deciding how to manage the UK’s biggest fossil fuel resource, North Sea oil and gas, has become a defining issue in this and is one where the Conservatives and Labour differ significantly.
Labour
Labour’s position is that they will not approve any new North Sea oil and gas licenses, arguing that it would not contribute to bringing down bills – an argument in line with this analysis from Carbon Brief.
However, the party has underlined that the current operational North Sea oil and gas fields will continue to be in operation for decades to come, and the party will not revoke them. They have issued assurances that they will be managed to the end of their lifespan in a way that does not jeopardise jobs. Additionally, they have alluded to training programmes for existing offshore oil and gas workers, explaining the role those workers will have in leading the world in the industries of the future.
The party also plans to get tough on oil and gas companies by closing the loopholes in the windfall tax, extending the sunset clause in the Energy Profits Levy until the end of the new parliament, increasing the rate of the levy by three percentage points, removing ‘unjustifiably generous’ investment allowances and retaining the Energy Security Investment Mechanism.
This is a significant change from the Conservative commitment to keeping the oil and gas windfall tax they introduced as well as the allowances that incentivise investment in North Sea oil and gas.
The Conservatives
The Conservatives claim it would be risky to shut down production, citing energy security issues and arguing that allowing new North Sea oil and gas licenses is key to becoming more energy independent, bringing down bills and reducing energy imports.
However, there is no documented analysis that indicates that new oil and gas licenses would reduce energy imports and cut energy bills, nor that the production would be used for domestic consumption rather than exported.
For context, it is worth adding that, outside the UK, the biggest North Sea oil and gas players are Denmark and Norway. A while ago Denmark, like Labour, said no to new licenses. But Norway, the historically and present largest North Sea oil and gas producer with far larger reserves than Denmark and the UK, do allow new permits to be approved.
On a side note, the Whitehaven coal mine, which was approved by the Labour–Liberal Democrat-led Cumbria County Council in 2019, has become a symbolic issue on the subject of emissions. The mine will produce coking coal which is primarily used for steel production. The previous government refused to interfere in the council’s decision, and it will be interesting to see what action, if any, the new Labour government takes .
Industrial large-scale energy production and decarbonisation
Labour
Establishing the UK as an energy superpower was a key element of the Labour Party manifesto. The party, under former party leader and newly appointed Secretary of State for Energy Security and Net Zero, climate action advocate Ed Miliband, set out plans to double onshore wind, triple solar power, and quadruple offshore wind by 2030.
As well as investing in CCS, hydrogen and marine energy, they also plan to establish the Energy Independence Act, which will be the framework for their energy and climate policies.
Nuclear energy plays a big part in its strategy and the party argues that they will manage projects the Conservatives have struggled with far better, namechecking the completion of Hinkley Point C and progress with new nuclear power plants such as Sizewell C. They also embrace the use of new technologies such as Small Modular Reactors (SMRs), declaring that such projects, alongside a commitment to maintain a strategic gas reserve, will ensure energy security.
The Conservatives
Historically, to demonstrate their support for Net Zero, climate action and clean energy, the Conservatives have always favoured big industrial projects rather than small and local ones.
With a few exceptions, it could be argued that there are few large-scale energy technologies they are not in support of. The party believes it would be reckless to give up on UK oil and gas resources, proudly supports the expansion of both offshore wind power and nuclear energy and argues that it was under their leadership that the UK became the world leader in offshore wind power capacity. Relative to its population, the UK remains the European country with the largest installed capacity of offshore wind.
Nuclear energy has not come without controversy and criticism, with the biggest nuclear project to date in the UK, Hinkley Point C, dominated by delays and costs running well above budget.
Solar PV, on the other hand, does not seem to have complete backing. The Conservatives have cooled significantly on support for large-scale solar farms on farmland but continue to support both small- and large-scale solar on rooftops and brownfield sites.
While the party still has a moratorium on fracking, it supports an expansion of gas usage and the build-out of more gas fired power stations as well as the development of hydrogen production (blue and green). They claim on their net-zero record to have almost entirely eliminated the use of coal for electricity production. But remarkably, while they eased some restrictions, they did not fully support onshore wind, failing to clear several red-tape obstructions. This is despite the fact that energy analysts, such as Bloomberg New Energy Finance (BNEF), found onshore wind to be not just not the cheapest new clean energy source for the UK, but the cheapest of all energy sources.
The Conservatives pledged to treble offshore wind power – though they gave no timeline to deliver this. The construction of the first two carbon, capture and storage (CCS) clusters spanning across North Wales, North West England, Teesside and the Humber, initiated during their tenure, is already well underway. They also pledged to invest £1.1 billion into the Green Industries Growth Accelerator.
Finally, a key part of the Conservatives’ decarbonisation strategy was the establishment of the industrial and innovative clean energy and carbon reduction and research hub, the Humber in Yorkshire. It is already a key area for innovation, learning centres and hubs across CCS, offshore wind, hydrogen, electric vehicles (EVs) and many other innovating technologies.
Conclusion
In the run up to the election, the then Energy Secretary, Claire Coutinho, delivered a robust defence of the previous government’s net zero and broader climate and energy policies.
She argued that, while in office, they halved CO2 emissions while growing the economy, and built more offshore wind than any country in the world, except China. She highlighted that half of the UK’s electricity is now produced with clean energy – stating it was only 7% when they took office in 2009 – that they set out the largest nuclear energy expansion for 70 years, and were at the forefront of investing in, and supporting, new technology such as CCS and SMRs.
Stats don’t lie, and the previous government won praise for big visionary thinking on infrastructure projects, while criticisms were directed towards the party for not doing enough to transition away from fossil fuels.
The business community have frequently expressed frustration with a lack of consistency relating to energy policies, arguing that all they need is to know the direction of travel so they can make business decisions based on that.
The new Labour government has presented a strong case for establishing the UK as a clean energy superpower, but advocates for this argue that a lot is needed, on a policy level, to make this a reality. Given some of the significant wins under the previous government, Labour would be wise to keep what the Conservatives have delivered, embracing the policies that have proved effective, and should not be afraid to work with the Conservatives who were the ‘brains’ behind successful decarbonisation policies.
As it has been over 15 years since Labour has been in power, comparisons are difficult, since energy markets have completely changed, with clean energy sources now able to compete with traditional energy sources.
The most frustrating element of party manifestos in the lead up to a general election campaign is that they only give a snapshot of what they would like to do, with few policy details. As a result, we will only see the clear picture emerge in the coming weeks as the new government takes shape and the dust settles.
Danish-born Anders Lorenzen is a freelance writer and the founder of Greener Life, a greener world. He is a guest contributor to FON, looking broadly at global and UK trends that signal the UK’s energy transition pathway. Anders has a strong passion for action on climate change and the green energy transition and has contributed to various outlets on the topics of lifestyle, politics, climate change, energy and broad environmental as well as sustainability issues. He is a keen runner and lives in London with his partner and daughter. You can follow his work on Twitter, LinkedIn and view his writing portfolio here.
The Government’s manifesto in focus
As the dust settles, all eyes are now firmly on the new Labour Government to see just how it plans to deliver on its promise of ‘making Britain a clean energy superpower by 2030’.
There are some big, and bold, headline actions included in the manifesto which could potentially be transformative for the energy industry – plans to create 650,000 new jobs, to invest £8.3bn in a new publicly-owned energy company, £6.6bn to upgrade homes and to offer grants and low interest loans for domestic renewables – for example.
But as always, the devil will be in the detail and everyone is waiting with bated breath to see how the new policies will impact them.
A number of key measures were included in the manifesto and it now falls to new Secretary of State for Energy Security and Net Zero, Ed Miliband, to make good on them.
The key energy pledges
Clean power by 2030
- Double onshore wind, triple solar power and quadruple offshore wind by 2030
- Invest in carbon capture and storage, hydrogen and marine energy
- The lifetime of existing nuclear plants will be extended
- A strategic reserve of gas power stations will be maintained – existing licences will not be revoked, but new ones won’t be issued
Great British Energy
- Create a new publicly-owned company called Great British Energy
- Invest £8.3bn to create jobs and build supply chains across the UK, including to facilitate local energy production
Energy system reform
- Work with industry to upgrade national transmission infrastructure and rewire Britain
- Ensure a tougher system of regulation that puts customers first
Warm Homes Plan
- Invest an extra £6.6bn over the next parliament to upgrade five million homes to cut bills
- Offer grants and low interest loans to support investment in insulation and improvements such as solar panels, batteries and low carbon heating
- Work with private sector to provide further private finance to accelerate home upgrades
- Ensure homes in private rented meet minimum energy efficiency standards by 2030
High-quality jobs
- Invest in industries of the future through the National Wealth Fund to create 650,000 new jobs by 2030
- Reward clean energy developers with a British Jobs Bonus, allocating up to £500m per year from 2026
Accelerating to net zero
- Support the introduction of a carbon border adjustment mechanism
- Make the UK the ‘green finance capital of the world’, mandating UK-regulated financial institutions to implement credible transition plans that align with the 1.5°C goal of the Paris agreement
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