Energy and Net Zero Manifesto Analysis
As anticipated, the themes of energy and net zero take centre stage this election, with the parties' manifestos outlining their respective strategies for transitioning the UK to a decarbonised economy. Positively, the major parties are largely agreed that the UK must maintain its climate leadership in delivering net zero, cut energy bills, decarbonise the power system, and provide energy security.
Where they differ is the pathway to get there, and the speed at which the UK should meet its targets to win the ‘race’. Labour and the Conservatives currently sit on two opposing ends of the spectrum. Labour’s policy plans are highly ambitious, pledging to decarbonise the power system five years earlier and implement a green industrial strategy. The Conservatives take a slower, more pragmatic approach, vowing not to place additional costs on households. The Liberal Democrats have pledged to achieve Net Zero by 2045, while aligning with the Conservatives on their target of a decarbonised power system by 2035.
Governance
To achieve the goal of Net Zero by 2050, or 2045 as pledged by the Liberal Democrats, there needs to be certain shifts in the existing governance model. The Conservatives have pledged to reform the UK’s independent advisor, the Climate Change Committee, by giving it an explicit mandate to consider costs to households and UK energy security in its future climate advice. Labour, on the other hand, have promised to strengthen Ofgem as the energy regulator to ensure it can hold companies to account. They have also pledged to create a new Regulatory Innovation Office which will bridge the gaps between cross-governmental departments.
While these are welcomed governance reforms, they don’t go far enough in fostering a coordinated approach across government, both national and local, and across different sectors and net zero agencies. It is imperative that the UK has a collaborative and whole systems approach if it is to deliver a decarbonised economy.
The Liberal Democrats are unique in their pledge to create a new Net Zero Delivery Authority to coordinate action across government departments, work with devolved administrations, and hand more power and resources to local councils for local net zero strategies. Carbon Connect has previously called for a Net Zero Delivery Authority to coordinate the delivery of net zero in their report Connecting the Watts, launched back in 2021. The report went a step further to call for the Delivery Authority to be established in statute so as to have the autonomy to make the necessary implementation decisions, and this is what we recommend other parties to strive for.
Energy Security
Following Russia’s invasion of Ukraine, households witnessed unprecedentedly high bills as energy prices skyrocketed, which further exposed the UK’s reliance on imported oil and gas. Since then, energy security has remained a key concern for the UK’s major parties, culminating in their detailed plans to pursue home-grown, secure, and resilient energy systems.
Both the Conservatives and Labour manifestos highlight their ambition to upgrade the network, speed up grid connections, and increase renewable energy capacity, through investment in offshore wind and nuclear energy. Labour have pledged to increase support for onshore wind and solar, which the Conservatives have previously imposed restrictions on. Also central to Labour’s ambition for achieving energy security is their flagship project, GB Energy. You can read our analysis on GB Energy here.
While greater investment in renewables is welcomed, their intermittent nature mean it is not enough on its own to achieve energy security. There is a lack of commitment towards investing in long duration storage in both parties’ manifestos which is a crucial component of achieving a resilient energy system.
The main point of contention between Labour and the Conservative polices, can be seen in their stance on oil and gas, with the former opposing issuing new oil and gas licenses, and the latter advocating for annual licensing to promote security. While oil and gas is likely to play some role in balancing the grid, it is concerning to see the Conservatives policies so heavily focussed on oil and gas. New gas plants and dependency on fossil fuels is likely to result in higher bills and more energy insecurity. It is widely accepted in the sector that clean energy will lower bills in the long term as renewable energy is cheaper and less volatile than oil and gas.
Affordability
The Conservatives have centred their green agenda around affordability and not imposing additional costs on consumers. However, when it comes to offering short-term support for households who are struggling to pay their bills and have found themselves entrapped in energy debt, the party’s manifesto is lacking.
The Conservatives intend to maintain their energy price cap, review standing charges, and guarantee no new green levies will be introduced. Similarly, Labour also intends to review standing charges. Both parties have pledged to reduce household bills, but neither have offered any substantial short-term support for those experiencing record levels of energy debt.
At Carbon Connects Energy Security roundtable, representatives from the energy sector issued strong calls for a form of social tariff. The Liberal Democrats have pledged to introduce a social tariff for the most vulnerable by providing targeted energy discounts.
Green Jobs and Skills
The Conservatives have accused Labour of putting 200,000 jobs at risk by rejecting any new licenses in the North Sea. On the contrary, Labour estimate that through their pursuit of becoming a clean energy superpower, there will be 650,000 new high-quality jobs created. They have also pledged that through the establishment of the National Wealth Fund and the British Jobs Bonus, they will be able to invest in jobs that can rebuild Britain’s industrial strength. Similarly, the Conservatives have estimated that investing in carbon capture and storage clusters will result in tens of thousands of jobs being created.
While it is promising to see both parties reference the creation of green jobs in their respective manifestos, there is a lack of mention of green skills in their plans. Given there is a looming skills gap in the green economy, there should be greater emphasis on an incoming government developing a blueprint to upskill the workforce and deliver the green economy of the future. An upskilling plan will also ensure those workers who are transitioning from the fossil fuel sector can take on new clean energy jobs.
Concluding Reflections
Whilst Labour’s proposals to achieve Net Zero are positively ambitious, they remain light on detail, with continued disconnect between the scale of funding needed to deliver these ambitions. On the other hand, the Conservatives seem to have missed the opportunity to see net zero as synonymous to economic growth. By taking a pragmatic approach and being timid in their net zero plans, they may fail to grasp the long-term pay off of lower bills, energy security, and a green economy.
