Today the country goes to the polls. Environment and climate change are the fifth most important issue to voters – after the cost of living, health, the economy, and immigration and asylum – according to a recent poll from YouGov. This means that energy policy issues are important to the electorate, but perhaps not the main election determining items.
With the exception of climate-sceptic Reform, all major political parties continue to back the UK’s 2050 net zero target. But messaging on the energy transition has diverged markedly in the last year or so. Unlike the 2019 election, where the two main parties tried to outbid one another in ambition on climate, the Conservatives are now taking a much more cautious approach, emphasising costs, opposed to Labour’s focus on rapid action and benefits. Carbon Brief has produced a handy overview of all parties positions.
Labour sets out three ‘missions’: to decarbonise electricity by 2030; to create a new state-owned energy company, Great British Energy; and to tackle fuel poverty (warm homes plan). The Labour manifesto says it will create green jobs and reform the market to benefit consumers, particularly those on lower incomes. Interestingly, Labour also proposes to create a ‘strategic reserve’ that will hold gas stations in readiness to keep the lights on, even as the system moves to more and more renewables. No more details are provided, but this may be an implicit recognition of the difficulty of decarbonising power completely in less than 6 years, when both renewable schemes and new power lines are struggling with planning consent (which Labour also promises to tackle, though quite how to do this fast is not clear).
By contrast, the Conservatives ‘affordable and pragmatic plan for net zero’ leads with energy security, supporting new North Sea oil and gas licences, and claiming that Labour plans to end new licensing would cost 200,000 jobs and “billions of pounds of tax receipts”. The manifesto says that it will place “security and your family finances ahead of unaffordable eco-zealotry”. Despite the rhetoric there’s some pretty ambitious net zero stuff in the Conservative plans, including the trebling of offshore wind, two CCS clusters, and a commitment to approve two new fleets of small modular reactors ‘within 100 days’. No modular reactor yet has generic design approval, and this highly technical task is the job of the nuclear inspectorate. It usually takes years. It is hard to know quite what that pledge means, but the Conservative plans appear to be about cutting the cost of net zero, not cutting net zero.
The other parties offer a range of energy and climate promises. The exception is Reform, who propose to scrap the net zero target altogether in the interests of saving large amounts of money. In evaluating any party’s plans, it is important to carefully evaluate claims. The use of statistics by some is particularly interesting. In this regard it is important to bear in mind some important principles:
Expenditures by the private sector (much of the investment needed for the energy transition) cannot be used for public expenditure (for example on the NHS) or to cut taxes.
Large numbers appear in the energy system accounts irrespective of net zero. For example, the energy price spikes of 2022 added around £250 billion to financial flows through the energy system. The U.K. spent £40 billion protecting households from the worst impacts of the price hikes. And irrespective of climate change it will be necessary to replace old power stations, power lines and appliances. It is misleading to present the absolute cost of investment in net zero as if the alternative cost were zero.
Investment in new assets should not be confused with running costs. It will cost billions to upgrade the grid and to build new sources of energy. But these assets will last decades, with their costs spread out over long time horizons. Some assets, once built, may last a century (like some existing hydro stations). And if the transition is successful, the ongoing running costs of burning fossil fuels falls to near zero.
Whoever wins today, the challenges around energy will be great. The debates may intensify. UKERC will continue to champion evidence based policy and to provide high quality, independent analysis across the whole energy system. We hope that this will help the incoming government formulate effective policy, and provide all stakeholders with the facts and analysis needed to tackle complex problems.
If you want to learn more about how the election will impact energy politics, sign up to our webinar on 11 July.