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Labour’s Vision for the UK’s Energy Future


Envantage’s Trading and Risk Manager, Richard King, rounds up what we can expect from the new Labour Government following the general election results on 4th July, and outlines Labour’s vision for the UK’s energy future.

The Labour party, led by Sir Keir Starmer, claimed victory in last week’s General Election, winning 411 Parliamentary seats. This victory ends 14 years of Conservative rule. While the margin mirrors Tony Blair’s 1997 landslide, the new government faces a different economic and geopolitical landscape, marked by a cost of living crisis, inflation, and global conflicts in Eastern Europe and the Middle East. Labour’s key priorities include addressing these issues and implementing transformational changes.

In the energy sector, Ed Miliband will become Secretary of State for Energy Security and Net Zero. Labour’s manifesto promises prioritise green policies to drive growth, prosperity, and climate resilience. Key targets include fully decarbonizing the electricity grid by 2030 and achieving a net zero economy by 2050. The new Energy Independence Act will establish a framework for these policies, aiming to double onshore wind, triple solar power, and quadruple offshore wind by 2030. Investments will also focus on CCUS, hydrogen, marine energy, and long-term energy storage.

Labour plans to create Great British Energy, a publicly owned company that will partner with industry and trade unions to deliver clean power. This initiative, funded with £8.3 billion from an increased Energy Profits Levy, aims to accelerate local energy production and benefit communities nationwide.

Other major policy goals for the next five years include:

  • Ensuring the long-term security of the nuclear power sector by extending the lifetime of existing plants and investing in new nuclear stations, such as Hinkley Point C and Sizewell C, and developing Small Modular Reactors (SMRs).
  • Maintaining a strategic reserve of gas power stations for supply security while banning onshore fracking.
  • Retaining existing North Sea oil and gas exploration licenses but refusing new ones.
  • Speeding up the planning process for new energy infrastructure to reduce costs and deployment times, while ensuring community benefits.
  • Implementing a Local Power Plan to increase distributed production capacity, partnering with Great British Energy, energy companies, local authorities, and cooperatives.
  • Upgrading the national transmission infrastructure and investing in hydrogen and long-term energy storage.
  • Introducing a British Jobs Bonus to reward clean energy developers, aiming to create 650,000 jobs by 2030.
  • Investing £6.6 billion to upgrade five million homes for better energy efficiency by 2030.
  • Offering grants and low-interest loans through a ‘Warm Homes Plan’ for insulation and other energy improvements to cut bills.

Labour’s energy reforms are ambitious, reflecting their strong electoral mandate. However, meeting renewable energy targets may prove challenging due to global supply chain restrictions, skilled labour shortages, and critical mineral availability. Geopolitical shocks impacting energy costs could also shift priorities if the public perceives the costs of an accelerated energy transition to outweigh the benefits.

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