Will the new UK Government bring change to the energy sector?

Post Date
09 July 2024
Richard Jardine
Read Time
4 minutes
  • Carbon & energy management

With a new Labour Government in the UK, we are expecting to see significant changes in the energy sector, driven by its policy priorities and manifesto commitments. Yesterday the Chancellor, Rachel Reeves, lifted the “ban on onshore wind” in England [1] which is a major step forward for a just transition to a low carbon economy. But what other changes are we expecting or hoping to see?

Climate change and Net-Zero goals

Labour has committed to reaching Net-Zero emissions by 2030, which is far more ambitious than the previous UK Government's current target of 2050, and ahead of the Scottish Government’s aspiration of reducing emissions by 75% from 1990 levels by 2030 (already confirmed to be out of reach [2]). For Labour to meet these highly ambitious climate change targets and rapid transition to a green economy significant actions will be required, including:

  • Expansion of renewable energy generation
  • Stronger support for carbon capture and storage technologies
  • Development of hydrogen as a low-carbon energy source
  • Training and reskilling programmes for workers transitioning from fossil fuel industries to green jobs
  • Stricter energy efficiency standards for new buildings
  • Ensuring the benefits of green energy are equitably distributed across all segments of society, with particular attention to marginalised and vulnerable groups
  • Support for public transportation and active travel initiatives
  • Engaging with communities to ensure their needs and concerns are addressed - both to gain support for energy initiatives, and to ensure the benefits of energy projects are shared with the areas where they are based.

Renewable energy expansion

Labour has emphasised the importance of transitioning to renewable energy sources. Under the new government, we would expect to see an acceleration in the development of onshore wind, offshore wind, solar, and other renewable energy projects. Their manifesto [3] committed to double onshore wind, triple solar power, and quadruple offshore wind by 2030, a significant commitment in renewable energy infrastructure.

This raises a series of challenges:

  • Where does the investment come from for such rapid growth?
  • How will the planning system be changed to accommodate so many projects coming forward?
  • How will these project connect to the grid?

Will these challenges be overcome by GB Energy?

GB Energy, as a publicly owned energy company, is aimed at providing affordable, reliable, and green energy rooted in Labour's broader vision of public ownership. GB Energy should ensure profits are reinvested into the sector or returned to the public rather than distributed to private shareholders, to provide affordable energy with a focus on reducing energy poverty. However, we still need to understand the exact details around GB Energy to see if it will:

  • Reform the energy pricing structure to better reflect the costs and benefits of renewable energy
  • Encourage competition in the energy market to drive down prices
  • Strengthen regulations to protect consumers
  • Implement smart grid technology to optimise energy distribution and integrate renewable energy sources more effectively
  • Invest in advanced energy storage solutions, such as battery storage systems, to manage supply and demand fluctuations and ensure a stable and secure energy supply remains a priority

Final thoughts on the changes the Labour Government will bring to the UK energy sector

The new Labour Government is likely to focus on a green, fair, and secure energy transition. This will involve substantial investments in renewable energy, energy efficiency, and modernising energy infrastructure, alongside regulatory reforms to protect consumers and drive down costs. The commitment to tackling climate change will likely shape much of the policy landscape, with significant implications for the future of the UK’s energy sector.

SLR is ready to help navigate your energy projects, to speak to our experts please get in touch.

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[1] https://renews.biz/94365/labour-lifts-absurd-onshore-wind-ban/

[2] https://www.bbc.co.uk/newsround/68847883#:~:text=The%20Scottish%20government%20is%20scrapping,is%20%22out%20of%20reach%22.

[3] https://labour.org.uk/updates/stories/labour-manifesto-2024-sign-up/

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