Last week’s King’s Speech under the new Labour government highlighted Parliament’s clear focus on clean energy transition and reducing consumer bills. At Duracell Energy, we share these goals with our Home EcoSystem of home storage solutions.The Renewable industry has reacted to the King’s Speech, and Duracell Energy’s Mark Millar is featured in Current+’s recent article ‘King’s Speech meets mixed industry response‘, on the sector’s response.
Read the full article below.
Framed around economic promises and the party line of “getting Britain building”, Labour’s policy package outlined at the State Opening of Parliament has met with mixed reviews.
Climate did feature – and it was a major part of the party’s election campaign – but while targets are being set, the King’s Speech itself did little to expand on how they will be achieved.
There is a broad consensus that Labour’s plans are ambitious. Greg Jackson, Octopus Energy’s founder, is fairly optimistic.
He said: “The Government’s clean energy vision laid out in the King’s Speech is ambitious but can be achieved with rapid action and huge effort.
“Accompanied by market reform it could deliver some of Europe’s cheapest power and lower bills for UK households.”
Senior policy advisor at the climate change think tank E3G, Heather McKay, said: “The last Government was infamous for its delay on green, so it is welcome to see Labour fast out the blocks by centring green growth in today’s King’s Speech. It’s welcome to hear the clear recognition of the economic opportunities that UK Net Zero promises – at home and abroad. Delivering this goal requires a plan to drive green investment fast. The industrial strategy council must centre green if it is to deliver prosperity, jobs and climate safety for Britain.”
Indeed, the speed at which Labour moves over the next few months is a key topic. For the Association for Renewable Energy and Clean Technology (REA), “the flurry of activity we have seen since the new Government has taken office marks a welcome step-change from what the sector has seen in recent years”.
Still, REA CEO Trevor Hutchings acknowledged some gaps remain. He said: “We await to see the finer details behind these proposals, as well as some areas that the King’s Speech did not cover. For example, the growing need to address electric vehicle charging infrastructure, and measures to promote the circular bioeconomy, as outlined in the REA’s First 100 Days action plan for the Government.
“I would urge the Government to work with industry as an essential partner as we deliver a shared ambition of green growth for this country.”
Likewise, Alasdair Johnstone from the Energy and Climate Intelligence Unit (ECIU) said there are outstanding questions, including whether new standards for the private rented sector will extend to energy efficiency improvements.
As Labour Chancellor Rachel Reeves first set out on 8 July, Labour plans huge planning reform that will see faster housebuilding and approvals for major infrastructure projects – including renewable energy developments.
Further to this, Edward Glass, senior associate in the commercial real estate team at law firm Forsters, commented: “We need clarity on what should be done in areas such as ease of securing planning and grid connections. Further guidance on minimum energy efficiency regulations is still missing, as well as what “net zero” actually means within the built environment. For example, many commercial real estate investors are asking, is it EPC B by 2030 or not? Hopefully Labour is aware of this and further announcements are in the near-term pipeline.”
Great British Energy – more than an investor after all
Hotly anticipated headliner Great British Energy will be established under the Great British Energy Bill. The King’s Speech established Labour’s intention to set up GB Energy as a publicly owned company with a capitalisation of £8.3 billion over this parliament.
What has not been clear, until the briefing that accompanied the King’s Speech was published, is that GB Energy will have a mandate to develop, own and operate clean energy assets.
As well as highlighting the risks associated with an “extremely short” timeline, Jonathan Croley, who is a partner in the energy and resources team at Ashfords LLP, pointed out that “building a green energy superpower also requires an enormous supply chain”.
He added: “While Labour has offered investment, it is not clear how quickly this can be translated into the new workforce and expertise we need to achieve the aim. It will simply take longer than six years to get everything in place.
“GB Energy and its promise to work with the private sector to unlock growth and investment has been one of the most eye-catching energy pledges, but the industry response has been muted. At best it could offer a useful partner for risky schemes, at worst it could be unnecessary competition.
“But the real hard work for Labour is developing and building the renewable energy capacity it has promised – and that is a task much bigger than GB Energy could ever manage alone.”
Renewable UK’s executive director of policy, Ana Musat, pointed out that huge amounts of private investment will be needed.
“Setting up Great British Energy to mobilise investment into renewables and support engagement with local communities will also play an important role in helping us meet our deployment targets”, she said.
“Ensuring this institution works well alongside the National Wealth Fund and other financial institutions will be essential to enable the private sector to mobilise the finance required to deliver the energy transition: in offshore wind alone, £100bn of private investment will be needed to deliver Labour’s target of 60 gigawatts by 2030.”
On the National Wealth Fund, Dr Rhian-Mari Thomas, CEO of the Green Finance Institute and chair of the National Wealth Fund Taskforce, said: “Setting out the National Wealth Fund as a key priority demonstrates the Government’s determination to reshape the way we approach public, private risk-sharing, providing private investors with the confidence needed to invest in technologies and infrastructure that will drive growth and create jobs.
“Implementing the recommendations made by the Taskforce will drive investment into priority areas, accelerate the decarbonisation of our economy and position the UK for increased international investment. Yet time is of the essence. We need the Government to maintain the momentum that has characterised the work of the Taskforce to date so that capital is deployed at pace.”
Grid issues go unmentioned
Perhaps an oversight so far is the issue of grid capability: whether or not the system will handle the scale and speed of buildout that would facilitate Labour’s targets being met.
GB Energy is being pegged to reduce consumer costs – although exactly how is yet to be defined. Mark Millar, of PureDrive Energy which is a Duracell Authorised Licensee, said: One way to achieve [the energy transition and lower bills] is by installing a battery storage system. Using this can allow homeowners to purchase energy from the grid at off-peak prices and store it till peak times when homeowners can discharge the battery to power electricity at home.”
Energy storage – also from Labours headline policies – stands to support the grid through the energy transition.
According to Association for Decentralised Energy (ADE), a trade association which represents more than 150 organisations from the energy sector, “The mass acceleration of renewables is only possible if a smart and flexible optimised system is prioritised”.
“Unlocking the potential of a demand-led system is the only way the UK can achieve true energy independence and security. Now is the time to use investment – through initiatives such as the National Wealth Fund – to deliver the green industrial revolution. This will ensure a prosperous future is secured for Britain, all whilst meeting legally binding net zero targets.”
Glass, of Forsters, pointed out: “Many would argue that rather than headline grabbing public investment and creation of new bodies, we need clarity on what should be done in areas such as ease of securing planning and grid connections.”
Tom Faulkner, head of product development at Cornwall Insight, added: “Striking a balance between environmental protection and the urgent need to modernise our energy grid will be challenging, but we must remember that no environment will remain untouched by the impacts of a global climate crisis.
“We must also address the slow pace of grid connections and the growing backlog of projects awaiting approval. Too many important projects are being held up by lengthy queues. However, we urge caution, because there is a need to manage concerns and make sure developers and investors don’t see new projects enter the queue and leapfrog them under the new rules.”