In a welcome intervention at Labour’s recent conference, Shadow Climate Change Secretary Ed Miliband set out plans for Britain’s clean energy future. By contrast, the speech by Prime Minister Rishi Sunak two weeks earlier (hastily arranged following leaks) had announced a “watering down” of the government’s green policies.
Fellow Tory Zac Goldsmith considered this abnegation of responsibility “a moment of shame”. The government had, in fact, already shown its true colours by signalling that it would grant hundreds more North Sea drilling licences.
To reach its net zero target, the UK needs to reduce its dependence on fossil fuels, which still make up 75% of our energy usage overall. Over 40% of our electricity came from fossil fuels in 2022. After a summer of extreme heat and wild-fires around the world, it beggars belief that the Prime Minister should take such a step, whether for ideological or electoral reasons, and should claim, falsely, that his measures would ease the burden on consumers.
Delay of ban on sale of new diesel and petrol cars
The UK car industry, heavily dependent upon trade with the EU, has been struggling since the Brexit referendum of 2016. The change announced by Sunak to delay the ban of new diesel and petrol cars from 2030 to 2035 will remove the incentive for consumers to make early purchase of electric cars. This is a blow to UK car makers like Jaguar, which have switched investment plans to EVs only.
Despite this, two days after Sunak’s announcement, the Department for Business and Trade confirmed that its “sales quota scheme”, requiring manufacturers to ensure that at least 22% of vehicles sold are EVs, will still be implemented from January 2024, with an expected target of 80% by 2030. If they fail, companies will face fines of up to £15,000 per car.
The lack of funding and guidance to local authorities from central government for the roll out of the charging infrastructure is yet another factor holding back demand for EVs.
Weakening the plan for phasing out gas boilers
The second item on Sunak’s agenda was a significant dilution of the 2035 target for a ban on new gas boilers, down to only an 80% phase-out and a delay of the ban on new oil boilers from 2026 to 2035. A fifth of households will be exempted altogether. The UK already lags behind Europe on this and the 2035 phaseout of new gas boilers was meant to provide an incentive for industry to come up with cheaper, smaller versions of electric heat pumps. This has failed to materialise. There are also major questions about how to manage the gas network viably and safely if there are fewer consumers using it.
Although Sunak announced a 50% increase in the Boiler Upgrade Scheme grants, limiting the change-over plan will simply reduce the incentive for consumers to change, and is likely to further delay investment in innovative alternative solutions.
Ending the UK’s dependence on gas heating is a considerable challenge. A comprehensive plan by government and industry is required for de-carbonising residential heating. Labour has also yet to indicate how it plans to achieve this.
Cancellation of landlords’ obligation to insulate
Insulation is often the “poor relation” when it comes to energy policy, despite being a “win-win” in policy terms. It delivers warmer houses, cheaper energy bills for consumers and less pollution of the planet. Sunak nevertheless saw fit to cancel energy efficiency regulations for the private rental sector, calling them “expensive insulation upgrades” for landlords. Ed Miliband got this right: “When Rishi Sunak tells renters they should be forced to live in damp, cold homes and landlords don’t need to insulate them, that won’t cut bills, it will raise them.”
Wind auction failure
Adding insult to injury, Sunak’s U-turn on clean energy came hard on the heels of the failure of the UK’s latest subsidy auction for offshore wind contracts, when no bids were made. Greenpeace called it “the biggest disaster for clean energy in almost a decade”. The government had ignored industry warnings that because of problems in the supply chain linked to the war in Ukraine, the cost of offshore wind turbines had jumped sharply. Less wind power will cost consumers dearly, as once built, wind turbines can provide power at a fraction of the cost of plants dependent on expensive fossil fuel imports.
Sunak’s speech was criticised by the government’s own advisors, the Climate Change Committee (CCC), as damaging to achieving net zero and keeping bills high for both consumers and motorists. The UK was the first major economy to enshrine a 2050 net zero target in law. Sunak’s unwise retreat will make it harder for his government to play a part in persuading emerging markets to use renewables, rather than polluting fossil fuels, to fund their development, in the run up to the COP28 conference in Dubai in late November.
By contrast Labour’s plan, influenced by the Inflation Reduction Act in the US, is to double onshore wind (which has effectively been banned under the Tories) and treble solar power (both these technologies are relatively cheap and quick to build). They will quadruple offshore wind, and invest in nuclear, hydrogen, carbon capture, tidal power, de-carbonisation of heavy industry and home insulation. This will lessen the UK’s dependence on imported, polluting, fossil fuels, but will also require significantly more investment in the National Grid.
Labour has made it clear its plans will need to comply with its target to reduce debt as a share of national income after five years. Sunak promised “comprehensive new reforms to energy infrastructure” – but no details as yet. Sunak’s undermining of the UK’s net zero strategy will maintain the high dependency of UK consumers on imported natural gas (which is also used for a significant proportion of electricity production) and oil. The cost-of-living crisis was sparked off by high gas prices on global markets, following the outbreak of war in Ukraine. Both Conservatives and Labour need to spell out in more detail how net zero will be achieved – but perhaps it will take a change of government to ensure the UK stays on track to achieve its net zero targets, to bring down prices for energy consumers and to play its part in fighting global climate change.