Briefing paper
Review of Energy Policy 2024
Dec 2024
Volker Beckers opened the session with a simple but powerful remark – “What a week!”. Reflecting on the General Election one week on, in which time the de facto ban on onshore wind has been lifted, and UKERC Advisory Board member Chris Stark appointed Mission Controller for Clean Power by 2030, Volker emphasised the significance of the discussions to follow, given the current political climate and its impact on energy policy.
In a wide-reaching discussion, the panel of experts provided their thoughts on how energy politics is set to change under the new government.
You can watch highlights of the webinar here:
Rob was enthusiastic about the government’s vigorous pursuit of its energy agenda since the election. He noted the establishment of GB Energy, which, despite receiving less funding than initially promised, holds potential; he will be interested to see the role it plays.
However, Rob cautioned that we shouldn’t lose sight of the significant efforts still needed beyond 2030, particularly in electrifying heat and transport, and potentially doubling the UK’s electric capacity. Rob lamented the UK’s stalled progress on insulation since 2012, and underscored the need to revive these efforts. He also touched on the North Sea transition, where the UK must manage the relationship between a nationwide rise in green jobs and the localised loss of employment around the North Sea. The Government has acknowledged the fiscally constrained context it is working in, which makes clarity even more essential.
Rob also highlighted that our existing system has huge running costs. He emphasised the need to distinguish between investment costs and running costs, noting that while low-carbon infrastructure requires substantial upfront investment, its running costs are significantly lower than those of fossil fuel systems. While action remains politicised, and we should not assume that the changes announced in the first week are universally popular, Rob applauded the clarity of purpose we have seen from the new Government.
Mallika Ishwaran placed the UK in its global context, noting that energy and green industrial policies have now become front and centre in economic debates on the cost of living, as well as decarbonisation. She emphasised that the UK, being an open and globally integrated economy, faces challenges but also immense opportunities.
While Shell’s long-term global scenarios (The Energy Security Scenarios) indicate that global fragmentation and competition around energy and climate will intensify, the nature of that competition is crucial. Competition, and the right type of industrial policies, can accelerate innovation. But protectionism, and restrictions on where inputs come from and where outputs flow to, can increase costs and slow down the pace of transition. The transition involves phasing down the existing system while ramping up a low-carbon energy system, a process that will take time. During this period, energy supply inelasticity means that even minor disruptions can lead to significant price swings.
She stressed the need for policies to drive simultaneous investment in developing low carbon energy supply, transforming energy demand, and building out the required infrastructure, Mallika highlighted the importance of an integrated and stable policy framework. She noted that a sustainable energy transition requires trillions of dollars annually, through targeted public investments and innovative policies that leverage in private investment.
Mike Thompson observed a noticeable change in the government’s narrative, tone, and approach to energy policy. He welcomed the Chancellor of the Exchequer’s announcement lifting the de facto ban on onshore wind, interpreting this as a shift from viewing clean energy as purely a climate objective to recognising its economic and security benefits.
While the government’s goal of achieving clean power by 2030 is clearly ambitious, Mike pointed out that a lot of the required progress would be delivered if existing targets are met, such as the target for 50 GW of offshore wind by 2030. Addressing barriers, including in planning, is crucial to getting progress back on track – something the government has begun taking action on, and which is likely to be a key focus for Mission Control.
Mike argued for a broader programme beyond electricity, highlighting the need for comprehensive measures to achieve net zero, and the importance of transport and heat electrification for increasing flexibility in electricity. He mentioned the potential for promoting heat pump visibility by incorporating these into new housing, in support of the more direct measures required to roll out heat pumps across the existing housing stock.
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