PM speech on green targets: the industry responds

Dan McGrail, Chief Executive, RenewableUK:

“The Prime Minister is right in saying the UK should embrace the huge economic opportunities in green industries like offshore wind and create well-paid jobs by making the UK the best place to invest in clean tech. However, today’s announcements will undoubtedly knock investor confidence, as many green technology leaders are now nervous about the increasing uncertainty around net zero policies in the UK.
“The government is going to have to outline clear measures to restore market confidence in the Autumn Statement, not least to ensure that we can compete against the USA, Europe and China for investment at a time when the global race to build new renewable energy projects has never been more intense. The financial incentives being offered elsewhere risk draining private investment from the UK, so we need to see capital allowances which will bring developers back to the table here and stop vital energy infrastructure projects being put on hold. We also need to see new incentives focused on investment in manufacturing.
“The Prime Minister acknowledged the need to reform the annual auction process for new renewable energy projects, as there were no bids for new offshore wind farms this year, and the need to speed up the planning process as it can take over ten years to get some projects up and running. These are excellent aims, but we need clarity and detail urgently on how this will be achieved, otherwise they will remain nothing more than aspirations.
“If Mr Sunak is really serious about taking bold measures to save money for consumers, he should end our dependence on expensive gas as fast as possible, as the volatility of international gas markets caused the cost of living crisis. The fact is that the speeding up the transition to a green economy is the only way to protect billpayers from price shocks”.

Jess Ralston, Energy Analyst, ECIU:
“This looks chaotic and not the way long-term policy should be made around important issues, with emergency cabinet meetings and investors spooked.
“Quite the opposite of an honest debate, the implication that any of these policies were going to affect the cost of living here and now is untrue. In fact, the PM has sided with landlords over renters, putting their energy bills and cost of living up by ducking the improvement of rules on energy efficiency. That doesn’t make any sense when excess cold in homes costs the NHS £1.2bn per year and renters are amongst those with the lowest incomes. As the North Sea declines, if the UK fails to shift to heat pumps, we’ll end up reliant on importing ever larger quantities of foreign gas. The last thing that the car industry wants to see is uncertainty and a lack of long term policy stability – but that’s what they’ve got with the pushing back of the phase out that they’ve been preparing for.”

Jenny Curtis, Managing Director, Vattenfall Heat UK:
“In the UK, one third of greenhouse gas emissions come from heating homes and buildings. Delaying the phase-out of gas boilers risks removing the incentive for building owners to switch to lower-carbon alternatives.
“The UK cannot afford to stall the deployment of low carbon heating by sending mixed messages about the future of fossil fuels. Companies will stop investing and the establishment of the supply chain and skills base that we so desperately need will fail to happen.”

Andrew Baldwin, Head of Policy and Public Affairs, Association for Project Management:

“Major projects related to achieving net zero targets need long-term stability and consistency from government to succeed. Today’s announcements on net zero policy changes and delays could lead to spiralling costs, reduced benefits and, ultimately, to failure – and we simply cannot afford to fail at delivering something as important as net zero.
“The government’s net zero strategy requires the delivery of a huge range of projects at pace over the next decade if targets are to be achieved. Good project outcomes require the right conditions for success … we urge the government to not lose the momentum on the fight against climate change.”

Rachel Solomon Williams, Executive Director, Aldersgate Group:
“Today’s decision to reframe the UK’s progress towards net zero, and in particular delaying the phase-out of new conventional cars and boilers, is a significant misstep by the UK Government and risks our future economic prosperity, energy security and standing on the world stage. The net zero transition is a major economic opportunity and has the potential to drive prosperity across the country, including high quality jobs where they are most needed, but this will only be realised with policies that provide certainty for investors. Today’s announcements undermine previous Government commitments and therefore the necessary certainty businesses and investors require.
“The net zero transition must be delivered in a way that is equitable and considers the needs of the public. However, pushing back targets is not the way to do this, and uncertainty only serves to complicate matters for businesses and disincentivise investment in the UK at a time when other nations are recognising the potential of the net zero transition. …
“The global direction of travel is clear. We know that decarbonisation will be a key driver of growth long into the future. Other nations recognise this and are mobilising to seize the opportunity through legislation like the US’ Inflation Reduction Act. The UK now finds itself in a highly-competitive global race to secure green investment, and we simply cannot afford uncertainty or a lack of commitment.”

Mike Tholen, sustainability and policy director, OEUK:
“Today we heard the Prime Minister confirm his commitment to net zero. In recent months we have felt the direct impact of underinvestment in homegrown energy on job security for our workers, the competitiveness of our firms internationally, and our future energy bills.
… The UK mustn’t just become a good place to do energy business, it must become irresistible. Our Economic Report shows that as the global race for energy investment accelerates, the UK must compete by making the most of its diverse homegrown industry, from oil and gas to offshore wind, hydrogen and carbon capture. Globally, this is the lesson other countries have learnt.”

Dr Nina Skorupska CBE, Chief Executive, Association for Renewable Energy and Clean Technology:
“While badged as a ‘pragmatic response’ to the cost-of-living crisis and the UK’s (undoubted) good progress to date on cutting emissions, it is hard not to see today’s news as a retrograde step arguably designed to play to the PM’s base before party-conference season and pre-election. Furthermore, Sunak feeds into the ongoing misguided media rhetoric of “net zero extremists” picking high profile policies to roll back on in the hope to garner votes, while leaving the industry a few positive measures through an effective repackaging of ongoing commitments.
“The renewables and clean tech industry have long called on government to support all households in the energy transition. This could have been achieved through more consistent policies over the last five years, and today’s statements mark an admission of government’s previous failures.
“The purpose of long-term targets is to allow time for people to make the transition and for government to support them in doing so, and delays risk making the transition more expensive, while damaging UK competitiveness in terms of green investment. It is curious as to how government intends for the UK to remain a world leader by retracting on commitments – Industry urgently requires details on the Prime Minister’s new approach as a whole.
“The EV industry will particularly be looking towards more ambitious and favourable international markets.”

Rt Hon Philip Dunne MP, Chairman, Environmental Audit Committee:
“The Prime Minister’s speech this afternoon, contrary to prior media speculation, reinforced his clear commitment to net zero Britain. This was very welcome, as was his reflection on how far we have come in meeting our environmental goals. It was a measured and realistic response to the current Net Zero challenge and the demands the transition will make on the British public.
“The very welcome ‘rabbit in the hat’ is the 50% increased grant for the Boiler Upgrade Scheme to £7,500 for any household scrapping their fossil fuel boiler. There is also specific relaxation of the proposed timeline to replace oil-fired boilers for those households off the gas-grid by 2026, of which there are some 1.5 million, including the majority in rural areas of South Shropshire. The Government has clearlylistened to concerns that, without Government support, some low carbon alternatives are simply too far out of reach for many at this point.
“As our Committee found during our work on heat pumps earlier this Parliament, successful heat pump installation often requires significant additional work to insulate homes properly and may require changes to radiators. There are simply not yet enough skilled engineers in the supply chain. The Government appears to have learned the lesson from previous home heating schemes for homeowners and landlords and I expect this straightforward grant support will enable the supply chain to develop.

“We still have the leakiest housing stock in Europe, but the cost of requiring energy efficiency measures on the 20% of hardest to insulate homes, such as those which are listed or old properties in rural areas, lacked credibility. Energy efficiency policies will now be focussed on the 80% of homes which need improving and can be achieved to meet emission reduction targets.

“Delaying the ban on sale of new petrol and diesel cars is disappointing, but reflects the reality that this is where most of the major car manufacturing nations are. The take-up of electric vehicles has been led by fleet buyers, which is happening faster than predicted and likely to continue until economies of scale bring down the purchase price for individuals able to buy new cars. The industry has called for ambition and certainty. It is now absolutely imperative that this date does not slip further. The Government must now accelerate its efforts to get charging infrastructure up to speed.

“I was encouraged to learn the Chancellor and the Energy Security and Net Zero Secretary will confirm their plans to make the grid ready for Net Zero Britain: the Environmental Audit Committee will be engaging actively with these policy proposals. It was also good to learn that the next Contracts for Difference auction round for Offshore Wind will be improved to reflect sustainable pricing in a global context, which shows the Government has learned from the last round and should enable projects to come forward to help meet renewables targets.

“On scrutiny, the Prime Minister is right to point to the deficiencies in how Parliament examines carbon budgets. The effective bypassing of the Commons chamber on measures which have such a significant effect on the UK economy means that we as parliamentarians do not have a stake in the crucial policy decisions we are asked to approve on the nod. So I welcome his commitment to present a full delivery plan for the Seventh Carbon Budget to Parliament for scrutiny before we are asked to approve the Government’s plans.

“My colleagues on the Environmental Audit Committee and on the other Commons and Lords committees examining Government policy will have heard the Prime Minister’s criticism of poorly-scrutinised policies developed in departments, with too little external engagement. Colleagues across Parliament who take scrutiny seriously will welcome the Prime Minister’s commitment to opening more Government decisions on climate targets up to fair and rigorous scrutiny. We look forward to greater openness from Government on its climate plans and greater responsiveness to those Commons committees tasked with holding the Government to account.”

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