Yesterday the UK gained a new department of Energy Security and Net Zero. In many respects this recreates the Department of Energy and Climate Change (DECC) that back in 2016 was dissolved into the Department for Business, Energy and Industrial Strategy (BEIS). Perhaps the most remarkable thing about the break-up of BEIS into two new departments and partial merger with another, is how unremarkable most commentators appear to find it. It only makes the front page of two national newspapers (FT and Times). Even on my twitter feed, largely dominated by energy geeks, the principal subject appears to be how the new acronym will be pronounced (DESNEZ?).
Back in 2016 it was very different. The departure of DECC was seen by many as a demotion of the climate change agenda in Theresa May’s post-Brexit government. Which of course it was. The loss of DECC was widely decried by those in favour of action on climate change. As it turned out though, energy policy, innovation and industrial strategy became rather well suited to one another. On the international stage it became more and more apparent that the international race for low carbon would be a major source of jobs and growth – in renewables, electric vehicles, and energy efficiency.
More recently, the huge hikes in fossil fuel prices that accompanied Russia’s invasion of Ukraine changed the narrative again. In the last year low carbon sources have also featured strongly in the governments Energy Security Strategy. The potential to reduce bills was highlighted in UKERC research. This was all underscored just last month by the Skidmore Review of Net Zero. In the US the Inflation Reduction Act has placed green energy at the heart of a hugely ambitious (and protectionist) re-industrialisation project.
So what to make of the new department? The picture is actually rather mixed. Many celebrate the recreation of a dedicated department focused on energy and net zero. Older hands may worry about the continued neglect of demand side action, but there is to be no return to separate responsibilities for energy efficiency and energy supply of the pre-DECC era. A new energy and net zero department might seem like a symbolic victory at least, but there are risks. It is hugely important that energy and innovation policy remain joined up – a point made very clearly by Aldersgate Group CEO Nick Molho. Aspects of net zero overlap strongly with industrial strategy, not least industrial decarbonisation, one of our biggest challenges. The status of net zero has changed. What one former Prime Minister apparently described as green crap is now widely seen as a source of lower energy prices and an engine for economic growth and new jobs. Perhaps ironically, keeping energy and industrial strategy together now seems like idea good idea?
Overall, what will really matter to action on climate change is political commitment from the very heart of government. This cannot be created through reorganisation in Whitehall. At the moment, the UK has bold net zero ambitions across many sectors, but in many instances enabling policies are still nascent, absent, or stop-start. Progress has been strong with renewable energy, where policy has been supportive for more than two decades. We have also seen progress with electric vehicle sales. Yet in building efficiency retrofit, heat pump sales, carbon capture (CCUS) and industrial decarbonisation there is much strategizing and rather less action. Rearranging the desks in Whitehall will take time and effort, and we can only hope that this will not distract too much from the urgency of getting on with the job in hand.