The transition to net zero is the biggest energy industry upheaval for 50 years. The Labour government will require utility-scale investment from the private sector for grid improvements and new, low carbon, generating plants. For example, National Grid alone says it needs to invest £60 billion over five years, but currently is not sitting on even 10% of that liquid capital.*

To compete for investment on the international stage the UK needs to offer certainty: a prolonged period of stable, positive, low-carbon policy. We need to initiate policies across the board that are pro-renewables, and that fall in line with the positive public opinion that exists across voters of all political persuasions.

Having called, prior to the election, for removal of the block on new onshore wind turbines in England, and streamlining of the planning process for solar PV, we were pleased to see both issues addressed within the first few days in power.

We welcome the rapid and decisive action to drop the de facto ban on new onshore windfarms in England and the unlocking of additional budget for offshore wind in Allocation Round 6.

Thanks to the simple removal of two footnotes to the National Planning Policy Framework, Labour’s commitment to double onshore wind capacity by 2030 is one step closer. We look forward to Parliament’s formal ratification of this significant step.

Onshore wind power is cheap, popular with the majority of the public and can be deployed quickly and close to centres of demand.

Additionally, at the eleventh hour, before the 1st of August deadline, the new government unlocked additional budget of £300 million for offshore wind in Allocation Round 6 (AR6) of the Contracts for Difference (CfD) scheme. This scheme has successfully contracted 14 GW of offshore wind projects in the last decade, capable of generating electricity needed to power 50% of UK homes in 2023. The increase to a total of £1.1 billion for offshore wind in AR6 goes some way towards the nation’s 2030 clean energy targets, but a lot more must be done if those go are to be met.

The pace of change has continued with plans to triple the amount of solar power by 2030.

Promising to take on the “blockers, delayers and obstructionists” who have opposed Labour’s plans to speed up the UK’s progress towards a clean energy system by the end of the decade, Energy Secretary, Ed Milliband has: re-examined restrictions on the placement of rooftop solar; revised standards for new-build properties; and approved three large ground mounted solar farms – which could deliver about two-thirds of the solar energy installed in the whole of 2023. We would also encourage co-location of solar with wind and batteries, to make the best use of grid capacity for as much of the year as possible.

Industrial and commercial roof space is a valuable and under-utilised resource that can be simply and cost-effectively harnessed for self-generation of predictably-priced, low carbon solar power – whether new build or retrofit.

We are pleased that the new government has confirmed its commitment to the publically-owned Great British Energy company, while also announcing a Mission Control for Clean Power and a £7.3 billion National Wealth Fund.

Key objectives include:

  • turbocharging the UK to clean power by 2030;
  • breaking down barriers and accelerating progress on clean energy projects;
  • speeding up the connection of new power infrastructure to the grid;
  • accelerating decarbonisation technologies;
  • boosting Britain’s energy independence;
  • allocating £21.7bn over 25 years to develop two CCUS hubs (East Coast Cluster and HyNet);
  • supporting green H2 to the tune of £500 million, with a plan to increase low carbon H2 production capacity to 10 GW by 2030.

We believe that the National Wealth Fund will support industrial growth and, notably, green hydrogen production – both of which are most welcome. However this requires clean, low carbon energy, which needs to grow in step. Hopefully the fund can work in tune with its sister initiatives, GB Energy and the Mission Control for Clean Power, to speed up the adoption of renewables nationally.

The NWF needs renewables growth in order to be a success, and so its remit should include the provision and use of renewable energy as a material investment consideration. Any industrial and investment plan will have to be underpinned by renewable energy for it to be fit for the future.

While we are encouraged by these quick wins at headline level, much of the follow-on detail from our wishlist remains:

  • setting national planning and environmental processes for the development of renewables-to-hydrogen projects;
  • restructuring the requirements on the electricity system operators (National Grid, Scottish Power, SSE and the new National Energy System Operator) to provide fast and transparent connection procedures;
  • restructuring the requirements on the distribution network operators (DNOs) to provide fast and transparent connection procedures;
  • grandfathering government support scheme rights at project level to remove investment risk; and
  • incentivising ownership of renewable energy projects by companies for their own use, through tax breaks.

Grid-scale change will take many years, during which time we are likely to see a shortage of green energy and higher costs. However, the industrial and commercial sector can deliver company-scale change now by choosing to own and operate renewables either on- or near-site (within 10 km). Ownership delivers secure, green electricity and Renewable Energy Guarantees of Origin (REGOs) that are greenwash-free. That green electricity can be used to power, heat and refuel transport for businesses, turning each company’s energy transition goals into actions.

Onshore wind and solar PV pay back the carbon used to build them within around a year, and then produce zero-carbon electricity at around a third of the cost of Hinkley Point C for 25 years or more. Furthermore, they can be developed and built quickly.

The policy recommendations made above would provide even further impetus for many more businesses to own and operate on-site renewables.

Owning the means of energy production gives companies control over their energy supply, security and costs, boosting profits, providing essential energy security, and having a genuine plan to deliver on net zero goals.

Early strategies set out by the new government suggest that the 2024 election was a once-in-a-generation opportunity to address the transition to net zero; with long-term cost and energy security benefits for business. The Labour government has made some rapid and robust policy pledges that, properly executed, could provide companies and their investors with much needed regulatory certainty and economic predictability.