Will the UK hold firm on its net zero commitments?

Will the UK hold firm on its net zero commitments?

Five years ago, the leading lights of the global energy sector gathered for a glitzy awards ceremony on Wall Street. Talk of the shift to renewables dominated discussions both at the margins of the event, and on stage. Almost every individual and organisation recognised had been singled out for their determination to deliver a cleaner, greener future – and quickly.

One such individual was my client, Andy Vesey. Then chief executive of Australia’s largest energy company, AGL Energy – also the country’s biggest carbon emitter – Vesey was hired on the strength of his vision to reduce AGL’s reliance on coal and chart a course towards a more sustainable future. He first act as CEO was to announce the closure of several coal-fired power stations, putting him on collision course with the powerful Australian coal industry and, inevitably, with the federal government.

Vesey may have won the prestigious Platts CEO of the Year award that evening, but his AGL tenure was bloody and brutal. He found obstacles put in front of him at every turn by people and institutions who wanted to drastically slow the transition to net zero – despite Vesey demonstrating that clean energy generation could go hand in hand with profitability and soaring shareholder value. He returned to the United States in 2018.

The resistance Vesey encountered can partly be explained by a turbulent period in Australian politics, not to mention the peculiarities of the Aussie energy market. But above all it was driven by an enormous spike in energy prices. Despite sitting on substantial natural gas reserves, twice that of the UK, the failure of its export policy saw domestic customers paying more for energy generation than their Asian counterparts.

An enormous spike in energy prices. If that sounds familiar, so do the growing calls for the UK Government to scale back its net zero ambitions to stave off the prospect of further rises. The 54% increase in the energy price cap, which takes effect two weeks on Friday (1 April), is overwhelmingly likely the be the first of two substantial hikes this year, contributing to a burgeoning cost of living crisis.

Will the UK Government compromise on net zero just months after Glasgow hosted the landmark COP26 Summit, or will the Prime Minister hold firm? While there is no prospect of the UK’s net zero strategy being comprehensively jettisoned, the early indications are that the Ukraine crisis has prompted a rethink when it comes to some legally enshrined commitments.

POLITICO Playbook reports that UK Government lawyers are looking to introduce a “national security” or “geopolitical consideration” clause that would temporarily bypass our net zero commitments, so that we could “quickly drill for more oil in emergency circumstances”. There will also be accelerated licences granted for new North Sea oil and gas fields. Advocates of renewable energy will undoubtedly be concerned by this development, while others will welcome the news as evidence that the Government is deprioritising net zero.

The net zero imperative, domestic economic factors, and geopolitical reality will all factor into the ‘British Energy Security Strategy’, due to be announced this month. Much of the package is expected to focus on accelerating renewables, with onshore wind and solar certain to feature prominently. It has been reported that the life of the Sizewell B nuclear power plant will be extended by 20 years to 2055, reflecting a belief that our future energy supply and security requires a diverse approach – or as the Prime Minister puts it, “green energy of all kinds”.

Writing for the Telegraph this morning (15 March), Boris Johnson tackled the net zero sceptics head on. “Our ambition to go for net zero is not the problem”, he explained. “Renewable power – which is getting more efficient the whole time – is a crucial part of the solution.” But his argument that “there is nothing [Vladimir Putin] can do to stop the North Sea wind” was met with derision by Steve Baker MP, a leading member of the recently established Net Zero Scrutiny Group. “The wind stops on its own,” he replied.

As ever, effective communication will be critical to persuading both MPs and the public that renewables are the future. Building widespread understanding of the potential of grid-connected systems to reduce household bills would appear to be a sensible starting point. Persuading homeowners to support the development of large-scale renewable sites in their communities may prove more challenging.
As BEIS ministers work with No. 10 to finalise the proposals, those involved will be acutely aware of the generational impact of their decisions in the coming days – and of the strength of feeling they will create.

Author

Andy Williams

I am an Account Director on the London team, leading group-wide campaigns and drawing upon my eight years of experience as a corporate affairs and reputation specialist. I am adept at transforming the perception of both emerging and high-profile businesses and organisations, with a keen eye for a narrative that shapes public opinion. I am highly regarded for my ability to manage sensitive reputational matters, providing strategic counsel and crisis communications support at board level.
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