Election 2024: Energy Policy by Party
Dissecting the policies and claims for energy policy made by the main parties
Introduction
We are in the middle of an election and the parties are starting to reveal their manifestos. Energy and climate policies are not exactly front and centre. However, cheap and abundant energy is fundamental to a thriving economy and social cohesion. This article goes through the climate and energy policies of the main parties in alphabetical order to give some insights on where they stand. Use your vote wisely.
Conservative Party Energy Policy
This Substack has not been shy about criticising the Tory Government’s Net Zero energy policy (for instance here, here and here) and the vast array of quangos charged with delivering Net Zero. The Conservatives remain committed to delivering Net Zero by 2050, except they want to take “a pragmatic and proportionate approach”, whatever that means. Part of their plan is to reform the Climate Change Committee giving it an explicit mandate to consider the cost to households and UK energy security in its future climate advice. However, Article 10 of the Climate Change Act already contains very similar provisions to look at the impact of decisions on fuel poverty and on energy supplies. While the Climate Change Act and Carbon Budgets are in place we remain on the conveyor belt to penury, even though the Tories might slow it down just a little.
The Conservatives claim they will ensure that green levies on household energy bills will be lower in each year of the next Parliament than they were in 2023. They do not explain how they will do this and the OBR expects green levies to rise substantially from £7.3bn in 2022/23 (including capacity market costs) to £13.8bn in 2026/27 before falling back a bit to £10.9bn in 2028/29 (see Figure A).
Sadly, this looks like an empty promise, because there does not appear to be provision for levies to be incorporated in general taxation in their costing document.
The Tories also say they will keep the windfall tax on oil and gas companies in place unless prices fall back to normal. However, the 25-year chart of Brent oil prices from Trading Economics (see Figure B) shows that current prices are at levels that have been quite normal since late 2006, especially if they were adjusted for inflation.
So, another empty promise. They also want to give households the choice of smart energy tariffs that they claim can save £900 a year, which is quite something given the latest price cap is £1,568. They are claiming smart tariffs can save 57% off energy bills to a level of £668 which is simply not credible. Moreover, they want to reform standing charges and keep them as low as possible at the same time as speeding up spending on grid connections, which they claim will reduce bills by £15-25 per year out to 2035. However, the National Grid has said they want to spend £112bn on the grid out to 2035, and it is unclear quite how spending such vast sums will reduce standing charges or our overall energy bill. They appear to be making stuff up as they go along.
There is some good news in the Tory energy plans, such as commitment to approve two new fleets of small modular reactors (SMRs) within the first 100-days of the new Parliament and deliver a new gigawatt-scale plant at Wylfa in North Wales in addition to Hinkley Point C and Sizewell C. They are also committed to building new gas-fired power stations to prevent blackouts when the weather means renewables cannot deliver. However, the good news is tempered by a commitment to treble our “low-cost” offshore wind capacity during the next Parliament. This is similar to the Labour plan and is likewise undeliverable. However, they fail to explain why subsidies are required to deliver these “cheap” renewables and why they needed to increase the subsidies on offer to offshore wind by ~66%. For new readers, I previously debunked the cheap renewables myth here.
They also want to build two carbon capture and storage (CCS) clusters which they claim will create tens of thousands of jobs. In reality, CCS reduces the efficiency of electricity generation and further increases energy costs. They will also spend £1.1bn on the Green Industries Growth Accelerator and protect what remains of our steel industry. The Tories also plan introduce a carbon tax on imports, like the EU’s Carbon Border Adjustment Mechanism (CBAM), to reduce the risk of energy intensive UK industries being displaced. These measures are effectively admitting that despite spending billions on “cheap” renewables, our energy is too expensive and will remain so. The cognitive dissonance is off the scale.
In some places it looks like the Tories recognise the economic, social and political risks of Net Zero, but they just cannot bring themselves to ditch it. They are left with trying to make the best of a bad job by trying to apply dumb sticking plaster measures to a total policy disaster.
Green Party Energy Policy
The Green Party manifesto reads like it was put together by pink-haired sixth formers without a science A-level between them. It is little more than a stream of consciousness with a massive price tag.
They want to get rid of nuclear power. Yes, they want to follow Germany in phasing out the energy source with the highest energy density, smallest overall environmental footprint and low CO2 emissions. The Greens would also stop all new fossil fuel extraction projects, cancel Rosebank, end all the non-existent subsides to the oil and gas industry and impose a carbon tax on all fossil fuels that will increase progressively over the next decade. They also want to stop burning imported trees at Drax and end all subsides for biomass. Effectively they want to close all our sources dispatchable power, except for the tiny amount of hydro capacity we have.
To reflect the “urgency of the climate crisis” and respond to the requirements of “global justice,” they want wind to provide 70% of our electricity by 2030. They then want to replace our functioning energy system with 80GW of offshore wind, 53GW of onshore wind and 100GW of solar by 2035 and for the whole economy to have achieved net zero more than a decade before 2050 (that is to say, before 2040). They claim that renewables technologies are cheaper, yet they want to increase contracts for difference (CfD) strike prices which are already more expensive than gas-fired electricity. The Greens also want to spend even more on expensive technologies such as floating offshore wind, marine, geothermal and green hydrogen.
They recognise that renewables are intermittent so they want to divert spending into interconnectors and grid-level storage, assuming this will make it possible to decarbonise the energy system (by which they probably mean electricity system) by 2030. The Green want to see a partnership – or “vaccine style taskforce” – between academia and industry to invent new energy storage technologies.
Apparently, “acting with more ambition will deliver: a zero-carbon electricity supply; security of supply over short and long periods of low generation; sufficient electricity for all cars and vans to be electric, for all homes and buildings to stop using fossil fuels, and for most industry to transition to clean energy.” If ambition is all we need, then we could have a perpetual motion machine tomorrow, we would see rainbows every day and have unicorns roaming freely across our green and pleasant land.
The Greens also have grand plans for our homes. All new homes must meet the Passivhaus standard and include solar panels and heat pumps. They also want to spend £29bn over the next five years on insulating existing homes and a further £9bn on heat pumps. Under the Greens, private landlords would have to take out an extra mortgage to pay for these improvements and rent controls would be introduced to prevent them passing on the extra costs to tenants. The Greens also want to interfere in our diets by cutting meat and dairy production.
There will also be £5bn per year to fund the rapid transition to electric vehicles. Sale of new petrol and diesel cars will be stopped by 2027, and their use banned altogether by 2035. Although we will not be able to drive EVs anywhere because the Greens are going to oppose all new road building plans, impose road pricing and cut the speed limit to 20mph in all built up areas. They also want to halt airport expansion, impose extra taxes on flights and ban domestic flights that would take less than three hours by train. This is the same Green Party that mimicked Monty Python by supporting the principle of high speed rail, but opposed HS2.
They want to spend an average of £40bn per year or £200bn over the course of the Parliament on their “Green Economic Transformation”. Of this, £50bn will be spent on electricity generation, transmission and storage. I suspect an extra zero would have to be added to their cost estimates to make them realistic. They also want to spend £30bn on nationalising water companies and the Big-5 retail energy companies.
Overall, an undeliverable, incoherent, unaffordable and plain batshit crazy wish-list of piffle that will destroy the economy and the social fabric of the nation.
Labour Party Energy Policy
Labour’s Energy policy has been the target of this Substack on several occasions before (such as Ed Stoned, Great British Energy Suicide Note and relying on Shonky Reports), but now we have their full manifesto to pull apart.
The headline is that Labour want to tackle the “climate and nature crisis” by decarbonising the electricity grid by 2030. Surprisingly, they fall short of making an explicit commitment to achieve overall net zero by 2050, although they do talk about “accelerating net zero”.
To deliver their “clean power mission” to make Britain a “clean energy superpower” they want to double onshore wind, triple solar and quadruple offshore wind capacity by 2030. This will require increasing the rate of installations of new capacity by 5.6, 7.8 and 4.8 times respectively, compared to the past five years. Figure C below shows the actual installed capacity since 2009 for solar in solid yellow, onshore wind in blue and offshore wind in green.
The heavy dashed lines show the path required to meet Labour’s targets shown by the coloured squares. The light dotted lines show the expected capacity by 2030 if the trend since 2009 is extrapolated. If the trend is maintained, then there will be a gap of 21GW of solar, 7.5GW of onshore wind and a staggering 38GW for offshore wind compared to Labour’s target. Moreover, they want to do all this while acknowledging that new grid connection dates are not being offered until the mid-2030s. Apparently, Labour can fix this fundamental bottleneck by simply “working with industry.” No wonder the GMB union has said that Labour’s plans are “unviable” and warned they will lead to “power cuts and blackouts”.
Labour claims they will “shape markets and use public investment to crowd in private funding” so “families and business will have lower bills for good from a zero-carbon electricity system.” They do not seem to have noticed that all existing renewables are more expensive than gas-fired electricity and new renewables are also being offered much higher prices than gas in Allocation Round 6 (AR6). The Labour Party will also spend on carbon capture and storage (CCS), hydrogen, marine energy and other unspecified and uncosted energy storage systems. Like the Tories, Labour wants to introduce the CBAM to “protect British Industries,” which just goes to show they are not confident their plans will bring down energy costs. They also plan to establish a framework for their policies in a new Energy Independence Act.
Labour’s plans also include reintroducing the ban on the sale of new cars with internal combustion engines by 2030. Apparently, the long-term future of aviation will be secured through promoting sustainable aviation fuels.
They make no specific pledges about heat pumps but do say they will support investment in insulation and low-carbon heating. They will also work with the private sector to provide finance to accelerate home upgrades and low carbon heating as well as ensuring private rented properties will have to meet minimum energy efficiency standards by 2030.
Labour will reverse the Conservative’s decision to prevent the Bank of England giving due consideration to climate change in its mandates, in a vain attempt to change the weather with interest rates. They will also make the UK the “green finance capital of the world” by forcing financial institutions to develop and implement “credible transition plans” that align with the 1.5oC goal of the Paris Agreement. Either this will lead to a flood of new subsidy seeking grifters or capital will flee to friendlier locations.
On the plus side, Labour makes a half-hearted commitment to nuclear by talking vaguely about Hinkley Point C, Sizewell C and SMRs. They also plan to maintain a “strategic reserve” of gas power stations to guarantee security of supply. They will not issue new oil and gas licenses but will not revoke existing licenses. However, Unite the Union has said Labour need to “pull back from this irresponsible policy” and that “North Sea workers cannot be sacrificed on the altar of net zero.” Moreover, Labour will not grant new coal licenses and will ban fracking for good.
We are to believe that all these pipedreams are to be achieved by just £1.7bn per year of spending on Great British Energy, £1.5bn to the National Wealth fund to upgrade ports, build gigafactories, deploy CCS and support green hydrogen. However, they do hope that additional funds will be provided by the private sector, but they do not explain why public money is needed at all if these are such attractive investments. There will also be £1.1bn per year spent on the Warm Homes plan. This spending will be funded by extending and increasing the windfall tax on oil and gas companies by £1.2bn per year. However, the windfall tax brought in only £2.6bn in its first year. Since then oil prices have fallen, so it is difficult to see how adding 3% to the current 35% Energy Profits Levy will bring in an extra £1.2bn. In fact, their commitment to end new licences is more likely to reduce the tax take. Labour plan to fund the rest of their “Green Prosperity Plan” (which must be an oxymoron) by “borrowing to invest” an extra £3.5bn per year.
It is patently obvious that Labour’s plans are a fantasy. Their numbers on energy bills, the cost of renewables and sources of funding simply do not add up. If renewables really were cheaper, then private companies would be falling over themselves to install new capacity without Government subsidy. If Tory policy was dumb, Labour’s plans are dumber because they want to do more foolish things more quickly.
Liberal Democrat Climate Change and Energy Policies
The Energy and Climate Change part of the Lib Dem manifesto starts off by claiming that climate change is an existential threat affecting billions of people “through falling food production and rising prices.” The trouble is, their starting premise is a lie, because according to Our World in Data, global cereal production shows a steady increase since the 1960’s (see Figure D).
Wheat is also trading around the 10-year average according to Trading Economics (see Figure E).
They continue with another lie, saying we need to “invest in renewables – both to cut energy bills and to deliver energy security.” As mentioned above, the whole notion of cheap renewables is a myth that has been debunked before.
Overall, they want to cut greenhouse gas emissions to net zero by 2045 at the latest. This is five years earlier than the Conservatives, and so even less deliverable.
Their policies seem quite feeble compared to the scale of their ambition. These include an emergency upgrade programme to offer “free insulation and heat pumps for those on low incomes.” Of course, these things are not free, it just means they will have to increase taxes to pay for the subsidies. Plus, a recent scandal of badly installed cavity-wall insulation, fitted under government-backed insulation schemes, has led to damp problems in hundreds of thousands of homes. In addition, they want all new homes built to the zero-carbon standard, even though that will add costs when there is a housing shortage.
They also want incentives (read subsidies) for households to install solar panels and offering a guaranteed price to electricity sold back to the grid. They want to invest in renewable power so that 90% of electricity is generated from renewables by 2030. This is just as bonkers as Labour’s Net Zero grid by 2030 plan. The Lib Dems make no mention of nuclear power in their manifesto. There is also a plan to “decouple electricity prices from the wholesale gas price.” They do not explain how they will achieve this feat, nor how it will affect prices because the high, index-linked fixed prices we pay for renewables funded by Contracts for Difference and Feed-in-Tariffs are already decoupled from the gas-price. Renewables Obligations Certificates are awarded in addition to market prices.
The Lib Dems also want to maintain the ban on fracking, ban new coal mines, increase the windfall tax on oil and gas companies, re-instate the ban on internal combustion engined vehicles by 2030 and offer more subsidies for electric cars. They also want to make the UK the world leader in zero carbon flying and take steps to reduce demand for flying by for example banning some internal domestic flights and placing a moratorium on airport expansion.
They also want to create another layer of bureaucracy by appointing a Chief Secretary for Sustainability in the Treasury and establish a Net Zero Delivery Authority to coordinate government departments and devolved administrations. The Lib Dems also want national and local citizens’ assemblies and to increase the international development spending back to 0.7% of national income with tackling climate change as a key priority for spending.
The Liberal Democrats have also released a separate costing document that sets out how much they plan to spend to achieve these objectives. Apparently, their emergency home energy upgrade programme, spending on renewables, grid infrastructure and storage as well as planting 60 million trees per year can be achieved with £8.4bn of public investment. This is part of their overall £19.7bn per year investment commitment. It is not clear whether the £8.4bn for climate is an annual spend or an overall figure for the Parliament. Either way, it is not going to be enough. By way of comparison, a single offshore wind farm, the 3.6GW Dogger Bank development is forecast to cost £11bn. To hit their target of 90% renewable power by 2030, then at least 35GW of additional offshore wind capacity will be needed. Using the Dogger Bank figures will mean that this alone will cost over £100bn, then there’s >£100bn of grid expansion on top plus extra spending on onshore wind and solar.
The Lib Dems policy started with a lie and the funding they have earmarked for their plans will not achieve their short-term objectives, let alone their Net Zero by 2045 pledge. All in all, complete insanity.
Reform Party
The Reform Party is due to release its updated “contract with the people” on June 17. So, for the time being we will look at the draft contract they released earlier this year.
Reform’s opening pitch is to scrap Net Zero and the related public sector spending. They also want to effectively scrap renewable energy subsidies by levying equivalent taxes on renewables generators. They think we should invest in cheap, secure energy by fast-tracking new North Sea licenses. They also want to grant shale gas licenses on test sites for two years, with a view to extending them and enabling major production once safety is proven.
Thereafter, Reform wants to fast-track new nuclear energy with UK-built SMRs, supplemented by gas-turbines. They also want to incentivise the production of clean synthetic fuel and clean coal mining as well as UK lithium mining for batteries.
Overall, Reform’s energy plans are brief and lacking detail but appear to be a step in the right direction.
Other Parties
There are of course other parties in this election. The Libertarian Party will also repeal the Climate Change Act. The SDP does not support Net Zero and wants to restart fracking. However, they also want to spend on carbon capture and storage and stop short of calling for the Climate Change Act to be repealed.
The SNP has yet to release its manifesto for this election, but it has recently climbed down from its commitment to net zero by 2045 and caused the collapse of the ruling coalition in Holyrood. The SNP website talks about supporting renewable energy and producing green hydrogen but is short on detail.
Plaid Cymru is committed to meeting net zero targets in Wales by 2035. Enough said.
Conclusions
When we wake up each morning our lives depend upon energy. From the hot water in the shower, to boiling the kettle for a morning drink, to all forms of transport to get to work and back, our lives depend on energy. In many ways, energy underpins almost everything we do and is in effect the base layer of the economy and society. However, many decades ago, we were so successful in building a cheap and reliable energy system, that we now take it for granted without really understanding its importance.
Yet, we now see families struggling to heat their homes and a creeping deindustrialisation such as the recent closure of the Port Talbot steelworks and our last fertiliser factory. We are losing key industries that are of vital importance to the basic building blocks of society: namely defence and food. Like Germany, we are approaching an existential crisis.
Despite this, the three main parties remain committed to the Climate Change Act and want to continue down the road to serfdom; their only point of difference being the speed with which we approach oblivion.
We might characterise the Conservative and Labour policies as Dumb and Dumber, the Liberal Democrats as insane and the Greens as batshit crazy. Only Reform and a couple of minor parties have anything approaching a sensible energy policy. We deserve better. Use your vote wisely.
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It’s like reading a bunch of six-years old kids writing to Santa with GMB Union and Reform the only adults in the room.
I was considering voting Plaid Cymru as I think the candidate makes a good MP and is often a sceptic, even supporting Andrew Bridgen over the vax.
However I will definitely be voting Reform as the only Party who wants to ditch NetZero. I think this, and all its ramifications, is THE most important issue currently.