Labour’s ditched £28 billion climate pledge sends the wrong message on UK COP energy commitments

The pledge was an important signal to international partners about future energy policy. Dropping it increases doubts about the credibility of UK plans should Labour win the election later this year.

Expert comment Updated 16 February 2024 3 minute READ

Antony Froggatt

Former Senior Research Fellow and Deputy Director, Environment and Society Centre

Last week the UK’s Labour Party rolled back its pledge to make £28 billion per year of additional capital expenditure available to meet the country’s Net Zero target: extra spending is now likely to be around £5 billion should Labour form the next government.  

The move has implications beyond the context of the general election. Without precise policy interventions, it could also unravel the party’s other core commitments, particularly the pledge to decarbonize the electricity sector by 2030 – which was to be part funded by the £28 billion.

The party’s rollback also underscores the immense challenges any new UK government – Conservative or Labour – will face to meet the UK’s broader climate goals without significant investment and action.

Real progress on decarbonizing energy

The UK has made remarkable progress in decarbonizing its power mix under Labour, coalition and Conservative governments. As recently as 2008, 76 per cent of UK electricity was generated by fossil fuels, with a sizeable share generated by the most carbon-intensive fossil fuel, coal.

There remains significant work to be done if the UK is to meet the renewables and energy efficiency pledge it signed up to at COP 28.

In 2023, fossil fuels provided just 33 per cent of electricity, virtually all from natural gas, according to the Carbon Brief. Renewables proved 43 per cent and nuclear 13 per cent, with the rest from imports or other sources – such as waste incineration.

However, there remains significant work to be done if the UK is to meet the renewables and energy efficiency pledge it signed up to at COP 28, which will require a global trebling of the deployment of renewables and a doubling of energy efficiency by 2030.

As of the end of Q3 in 2023, the UK’s installed capacities of renewable energies were 15.4 GW for onshore wind, 14.6 GW for offshore wind, 80 MW for floating offshore, and 15.5 GW for solar.  

In early 2023, Labour’s ‘Switch on British Energy’ pledge featured a ‘Clean Power by 2030’ proposal that would include a total of 35 GW of onshore wind, an ‘ambition’ of 55 GW of offshore wind, at least 5 GW of floating offshore wind, and 50 GW of solar by 2030.

Meeting the party’s proposed increases would therefore require nearly trebling the total amount of solar and wind over the next six years, a step change in current deployment rates. Even that will not alone lead to a decarbonized power sector.

Meeting the party’s proposed increases would therefore require trebling solar and offshore wind over the next six years.

To ensure the smooth operation of the system, there will also need to be a parallel increase in storage and in flexibility measures (such as dynamic demand or interconnection with continental Europe).

The scale of the task

Ratcheting up the installed capacity of renewables at such a scale within a single term of office would require huge investment, the removal of supply chain bottlenecks and planning obstacles, and significant new infrastructure development – National Grid has estimated that by 2030 five times more new transmission lines will need to be built than have been constructed in the last 30 years.

The investment cost of decarbonizing the power sector will also rise, and the Climate Change Committee estimate that financing will need to increase to £15 billion per year by 2035.

There are also considerable non-fiscal barriers to accelerated renewable energy deployment. A recent publication by Parliament’s Environmental Audit Committee stated that some customers wait 10 to 15 years for grid connections for solar installations, due to a lack of physical infrastructure and problems with the system used to allocate connections to the grid. Further barriers have been identified by Nick Winser, the newly appointed Electricity Networks Commissioner.

The UK government responded in the Autumn Statement, saying that new procedures would be implemented to ‘reduce overall connection delays from five years to no more than six months’ for viable projects and ‘to halve the time to build new grid infrastructure to seven years.’  

The UK’s part in a global effort

Labour’s 2030 ambitions acknowledge the enormous challenges involved in decarbonization. Its strong presence at COP28 was probably intended to demonstrate its understanding of climate policy as integral to a global effort, and that it intended to reinvigorate UK leadership on Net Zero.

That is why its rollback on its financial commitments is potentially so damaging: it not only reduces the available capital but sends a negative message to other countries, investors and international renewable energy companies.

UK Prime Minister Rishi Sunak has also sought to claim that he and his government remain ‘totally committed to Net Zero’, despite making rollbacks on some of the UK’s domestic climate goals. 

Regardless, neither parties’ current programmes would enable the UK to meet its international climate goals without considerable additional action.

To meet its international commitments, the UK must avoid falling further behind the US with its Inflation Reduction Act and the EU, with its Green Deal Industrial Plan. 

It also needs to work more closely with the EU to help deliver on key infrastructure, such as offshore wind in the North Sea and interconnectors to Ireland and the continent, to balance the grid and ensure the efficient and cheaper operation of the system. The importance of a pan-European energy approach was amply demonstrated by Russia’s full-scale invasion of Ukraine.  

Also of strategic importance is future supply chain security, particularly the approach to China, which produces over 80 per cent of global batteries and solar panels at far lower prices than could be achieved domestically.

National Grid has estimated that by 2030 five times more new transmission lines will need to be built than have been constructed in the last 30 years.

Consideration needs to be given to the trade-offs between higher priced, domestically made solar panels and electric vehicles and a slower, more expensive energy transition.

Whoever wins the UK’s 2024 general election, transforming the power sector within a decade will require unprecedented changes in the UK’s energy infrastructure. That will mean a step change in the pace of delivery, and working with European and international partners to secure supply chains and project pipelines.

Building these relationships will require confidence in the UK government’s pledges. Labour’s 2030 decarbonization plan exceeds the ambition of the current government. But dropping the £28 billion funding commitment makes Net Zero harder to achieve and raises questions about the credibility of UK plans. 

Should there be a Labour government, a future Energy Secretary of State will now have to work harder to convince international partners and investors that the UK is serious about meeting the challenges ahead.