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The new government should turbocharge the green revolution

3 min read

Alasdair Johnstone, of the Energy and Climate Intelligence Unit and former Senior Strategy Advisor for the Cabinet Office’s COP26 Unit, argues that the United Kingdom’s 'net-zero economy' is booming despite the policy challenges it faces

A poll run in April of MPs in the last Parliament1 found 25 per cent incorrectly thought it possible to halt climate change without net-zero – continuing to add emissions to the atmosphere means climate change will continue to worsen.

Likewise, the poll found MPs to be out of step with their constituents on support for onshore wind: while most MPs believed their constituents wouldn’t support a new wind farm, in actual fact 75 per cent of people say they would. But MPs and the public were united in supporting the net-zero target, with 69 per cent of the public and 76 per cent of MPs supportive.

Reaching net-zero and building the industries that will deliver it is now a global race. The United States’ Inflation Reduction Act and the European Union’s Net Zero Industries Act are two policy packages designed to compete for these investments – the electric vehicle factories, wind farms and battery plants.

Here in the UK the ‘net-zero economy’ is booming. In 2023 while the wider economy was largely stagnant, according to CBI Economics, this new sector saw growth of nine per cent, contributing £74bn to the UK economy2. And that growth wasn’t centred around London – constituencies like Stockport, Cheadle, Hartlepool, Taunton and Wellington and Angus and Perthshire are classed as 'net zero hotspots', with wealth and jobs in clean industries significant contributors to their economies. 

“Let’s be clear: clean technologies will make a much bigger impact on the UK’s energy security than North Sea oil and gas can"

But this progress can’t be taken for granted, and opportunities have been missed. A combination of rhetorical and policy rowbacks has jeopardised the UK’s ability to compete. The failure to secure the potential 5GW of offshore wind in last year’s Contracts for Difference auction means that the UK could be importing around 10 per cent more gas each year. The new government has just a few months to ensure the next auction round can deliver more renewables onto the system. Both Labour and the Conservatives had similar power sector decarbonisation targets during the election, with the Conservatives aiming for 95 per cent clean power and Labour 100 per cent. Irrespective of the target, the quicker renewables are built out, the quicker our vulnerability to volatile gas markets will reduce. Prices are largely set by international forces, so new drilling in the North Sea won’t help.

Improving insulation in homes so we waste less gas and providing incentives for households to switch to electric heat pumps are also important, ensuring more of the energy we use in homes is UK-generated, increasingly by renewables, as North Sea output continues its ongoing decline. Let’s be clear: clean technologies will make a much bigger impact on the UK’s energy security than North Sea oil and gas can. But as output and so jobs continue to decline, it becomes ever more important to help workers transfer to new industries. Robert Gordon University found in a 2023 report that “over 90 per cent of the UK’s oil and gas workforce have skills that are transferable to the offshore renewables sector.”

This new government has an opportunity to embrace and turbocharge the green revolution that is already happening around us. It will need the policy stability, ambition, political leadership and incentives to compete in the global race for net-zero industries. In doing so, it would boost the large and small businesses delivering the change, from the heat pump installers to the wind farm engineers.

This article was originally published in The Path To Net Zero supplement circulated alongside The House magazine. To find out more visit The Path To Net Zero hub.

References
1. https://eciu.net/media/press-releases/2024/election-poll-of-mps-shows-at-odds-with-voters-on-uk-energy-security

2. https://eciu.net/analysis/reports/2024/the-uks-net-zero-economy-2024

3. https://www.rgueti.com/wp-content/uploads/2023/09/powering-up-the-workforce.pdf

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