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| SNEAK PEEK |
— Keir Starmer is in Edinburgh today where he will reveal more details of Labour’s green energy plan.
— Parliament’s environmental audit committee (EAC) meets this afternoon. What’s on the agenda Grid queues of course.
— Stuart Broadley, chief executive of the Energy Industries Council (EIC), tells MECUK that delays in getting renewable projects off the ground put the U.K.’s net zero targets at risk.
Good Monday morning and welcome to POLITICO Pro Morning Energy and Climate UK. Good news all round: you made it through the weekend and we made it to a second week! Here’s your latest update.
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| DRIVING THE DAY |
LABOUR LINES: Labour is set to reveal more details of its green energy plan this morning, including renewed commitments to overturn the ban on onshore wind and overhaul the planning system. Read all about it — and in the meantime here are the main points.
STARMER SAYS: Opposition leader Keir Starmer will pledge to “cut bills, create jobs and provide energy security” when he appears in Edinburgh alongside Scottish Labour leader Anas Sarwar, Shadow Chancellor Rachel Reeves, and Shadow Energy and Climate Secretary Ed Miliband.
MORE WIND: Labour is doubling down on its pledge to reverse the de-facto ban on new onshore wind projects during its first months in power. The party estimates the ban has cost families £5.1 billion per year (or around £182 per household per year) on energy bills.
A planning plan: Plus the party will promise to reform the planning system, by introducing new targets to reduce the delays affecting renewables projects. Green schemes spend too long sitting in queues for planning approval or waiting for a grid connection, Labour says.
CONTEXT: This is all part of Labour’s plan to promote its green policy credentials, at a time when political rhetoric on energy security is getting sharper from both Labour and the government.
More details: Starmer will also give a bit more detail about the party’s plan for GB Energy, a state-owned energy company, which he says will work with local councils and devolved governments to create up to 8GW of renewable energy projects within five years.
Other commitments: To help it meet the 2030 targets, the party says it will ensure “every relevant regulator” has a net zero mandate and will simplify the consenting process for offshore wind. This will sit alongside existing commitments like a National Wealth Fund (to invest in renewables) and a Warm Homes Plan (to insulate 19 million homes).
LABOUR SPEAK: “We’ve got to roll up our sleeves and start building things, run towards the barriers — the planning system, the skills shortages, the investor confidence, the grid,” Starmer will say.
RECENT CRITICISM: The party initially pledged to invest £28 billion a year on green technologies, but have watered this down to a promise instead that a Labour government would “ramp up” to the £28 billion figure in the second half of a parliamentary term. The party’s plan to end all future oil and gas licenses has also been heavily criticized by government ministers, unions and some media commentators.
Under pressure: Environmental campaigners have called on the party to stand firm on its existing pledge to ban future oil and gas licenses. Starmer has stressed that no existing licenses will be revoked. Sarwar also reiterated on Sunday that there would be no “turning off the tap.”
CAMPAIGNERS SAY: “It’s pretty clear the electorate want the U.K. to be a climate leader. Labour have to stand firm on that,” Jamie Peters, director for campaign impact at the campaign group Friends of the Earth, told MECUK ahead of Starmer’s speech. He said that it is “no use” seeing Starmer “trying to be friends with everyone including the fossil fuel industry.”
INDUSTRY VIEW: Francesca Bell, fiscal and investor relations manager at Offshore Energies UK, told MECUK last week that the organization hoped to see “clarity” and “confidence” for investors from Starmer on the continued role of oil and gas, adding: “Oil and gas is for some companies the real engine room that is producing revenue for them to spend on new energies, and making sure we can continue to do that is so fundamental for achieving our targets.”
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| AGENDA |
LOOKING AHEAD: The Future of Utilities Summit kicks off on Tuesday, with a swathe of keynote speeches, including from Scottish Power’s chief, Keith Anderson and National Grid’s chief strategy and external affairs officer, Ben Wilson. Here’s the agenda.
**A message from SSE: Actions, not ambitions will secure our energy future. We’re investing over £7m a day in low-carbon energy infrastructure projects across the UK, including building the world’s largest offshore wind farm. SSE. We Power Change. Discover how.**
| QUICK HITS |
ROSEBANK UPDATE: Work on Rosebank, the North Sea’s largest untapped oil and gas field, could get the green light within weeks, the Sunday Times reported. The paper said Keir Starmer had personally reassured energy companies that Labour would only ban future oil and gas licenses — not existing ones — ahead of his speech in Edinburgh today.
MORE LABOUR ON OIL: Scottish Labour leader Anas Sarwar also restated the party’s pledge not to ban existing oil and gas licenses on Sunday, telling the BBC’s Laura Kuenssberg: “There is not a suggestion of any cliff edge. There will be no cliff edge, there will be no turning off of the tap.” Sarwar hailed Labour plans as a “big bold transformative package.”
HONOURS TIME: King Charles III released his first birthday honours list over the weekend. Nothing was bestowed on the MECUK team, sadly, but congratulations are in order for…
The gong gang: … Julia Nolan, former head of international climate strategy at BEIS, who gets an OBE. Director general for net zero in the Scottish government, Roy Brannen, gets a CBE, as does Peter Davies, who chairs the Smart Energy Code Panel. There is an MBE for David Smith, former boss of the Energy Network Association.
ABSOLUTELY PUMPED: The government has gone big in recent years on promises to phase out the installation of new natural gas boilers and replace them with eco-friendly heat pumps. The European Heat Pump Association gave MECUK a peek at its projections for how the U.K. market will grow in the years ahead.
Scores on the doors: The EHPA estimates that 59,800 heat pumps were sold in the U.K. last year and expects that figure to double to 121,300 by 2028. Annual sales are forecast to hit just under 140,000 in 2031. Year-on-year growth is roughly in line with the average across 21 European countries.
Lots to do: The U.K. had just 2.1 heat pumps per 1,000 households last year, according to EHPA estimates, lagging waaaay behind Scandi neighbors like Finland (69.4) and Norway (62.2). In other words, there is lots of room to improve.
Get out the jump leads: Thomas Nowak, EHPA secretary general, said: “The U.K. is the biggest potential heat pump market in Europe. Dedicated and ambitious government guidance — and making sure the price of electricity is no more than double the price of gas — will help jumpstart the market.”
| GRID CONNECTION DELAYS |
MP INQUIRY UP AND RUNNING: The environmental audit committee (EAC) opens its inquiry today into the hurdles facing renewable energy projects trying to connect to the grid. Giving evidence will be Nick Winser, the former National Grid U.K. CEO and “electricity networks czar.” His report for government on the challenges of the net zero grid is expected to reach ministers before summer recess.
What to expect: Winser is speaking in his capacity as a member National Infrastructure Commission so won’t be able to go into detail about his report — but no doubt we’ll get some clues about his thinking on an issue vital to the U.K. energy system.
Waiting for Winser: The government has put a lot of stock in his findings. Energy Minister Andrew Bowie said last month that the report would give advice on “how we can speed up connection times and build our network to the position it needs to be in.”
The 15-year queue: The focus of this afternoon’s session is the truly epic wait-times facing many renewables projects trying to connect to the grid — and the impact this is having on the U.K.’s goal of decarbonizing the electricity system by 2035. EAC Chair Philip Dunne MP told MECUK the committee had highlighted examples where developers faced projected delays of up to 15 years. The session kicks off at 4 p.m., live stream here.
Not to scale: “One of the concerns of the committee is that the [government’s] ambitions may be thwarted by various barriers in the way of scaling up offshore, onshore, solar, tidal, nuclear — all of which requires grid connection and grid capacity,” said Dunne. “This is one of the big barriers and risks” for U.K. progress on renewables, he added.
Also giving evidence: National Infrastructure Commission Assistant Director Joanna Campbell. More details on the EAC’s inquiry here.
| SUPPLY CHAIN WARNING |
NET ZERO? WE’RE NOT SEEING IT: The energy supply chain — the thousands of businesses that provide specialist goods and services to energy industries — are a key part of the net zero puzzle. But what do the companies themselves think about the U.K.’s trajectory? MECUK asked Stuart Broadley, CEO of energy supply chain trade association the Energy Industries Council (EIC). His verdict was bleak.
Quote: “The last two or three months,” Broadley said, “it’s been striking the groundswell in opinion … Everybody [is] now saying: ‘We don’t understand why we keep hearing policymakers and press talking about these targets still being achievable. Because we no longer believe that.’ Increasingly, all the people in the room, when you ask them, they say ‘Net zero? No chance.’”
Yikes. Why? Broadley pointed to a key metric: the number of renewables projects globally which have reached final investment decision (FID) stage. That’s the point at which the project is basically all-systems-go: the plan is fully funded, with capacity on the grid, and a pricing model. The EIC keeps tabs on these figures and estimates that, while around 20 percent of oil and gas projects globally are at FID stage, that number is only eight percent for offshore wind and two percent for hydrogen and carbon capture. “It’s a worryingly low number,” Broadley said. Supply chain suppliers cannot find profitable opportunities to start servicing projects if so many still await lift-off, he argued.
U.K. context: “You see that in the U.K. a lot of the projects have been announced, but so few of them [are] fully funded — stuck in issues with licensing or planning, or port capacity, grid capacity, or with no [energy] storage plan,” Broadley said.
Targets under threat: Broadley said that delays in making renewables projects a reality would have to be addressed “or targets have to be moved.” The EIC represents 900 members and estimates that there are 3,500 companies in the energy supply chain, based in the U.K., with more than £1 million in revenues. Of those more than 80 percent are still reliant on the oil and gas industry. Around a thousand have now diversified into renewables. Broadley said his members wanted to contribute to the energy transition — but were seeing a widening gap between government policy and reality on the ground.
Solutions: “It starts with policymakers. They have to take the lead and they have to be much clearer. We do look at the U.S. Inflation Reduction Act as an example of a much braver, clearer, faster and at-scale approach,” Broadly said.
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