Thought piece by Professor Paul Dodds,
Professor of Energy Systems, UCL Energy Institute.
There has been much interest in the climate and energy policies of the new Labour Government since it was elected on 4 July. Prior to the election, the Conservative and Labour parties agreed on a number of areas including building new nuclear power stations, offshore wind and the importance of hydrogen.
A key difference, though, was their vision for the speed of low-carbon transition. In September 2023, the Conservative Government slowed down the transition by, for example, delaying the date at which petrol and diesel cars would be phased out to 2035. Labour, in contrast, pledged to decarbonise the electricity system by 2030 and bring the phase-out date for cars back to 2030.
Labour’s Clean Energy Superpower Mission focuses on cutting energy bills and creating jobs. It includes a pledge to fund green hydrogen manufacturing with up to £500m over the new parliament. A National Wealth Fund is being created whose investments could include hydrogen, and GB Energy will be an owner and investor whose tasks will include project development, project investment and supply chains. The GB Energy Bill is scheduled to have its Second Reading in Parliament in September 2024 so it is clearly a priority.
Hydrogen is not a short-term priority for the new Government
The principal short-term priority for the new government appears to be clean power by 2030. The next offshore wind auction has already been increased to £1.5bn. There is a question about whether the Government will commit to a regular pipeline of support in the longer term that gives investors the confidence to invest in new UK factories to deliver wind turbines and other technologies.
Labour’s longer-term thoughts on net zero focus on nature, clean air, decarbonising transport and leveraging finance. It’s not clear that there will be a substantial focus on hydrogen over this parliament. Ed Miliband is the new Secretary of State for DESNZ, having held the same position for DECC in 2008–2010 when that Government was strongly in favour of electrification to reduce emissions. Sarah Jones is the new Minister of State with responsibility for hydrogen. The Prime Minister and particularly the new Chancellor of the Exchequer were very positive about hydrogen investments prior to the election.
Big questions remain about the strategy to decarbonise heat
While Labour is committed to using heat pumps to decarbonise heating in homes, Ed Miliband said prior to the election that a Labour Government would not force homeowners to rip out their gas boilers. Yet last year Lord Callanan, the previous Minister of State with responsibility for hydrogen, said “the idea that we could produce enough hydrogen at reasonable cost to displace mains gas is pretty much impossible”. So what is the strategy?
The Climate Change Committee (CCC) warned last summer that policymakers need to stop “avoiding big, impactful decisions and actions” to decarbonise heat. The decision on whether to use hydrogen for heating due in 2026 but the village pilot studies were abandoned by the previous government. The new Government will have come to a decision on its next steps for this challenging area sooner rather than later.
