Press play to listen to this article
Voiced by artificial intelligence.
— The U.K.’s grid infrastructure needs an overhaul to meet clean power targets. The problem? Pylons aren’t popular.
— The Public Accounts Committee (PAC) is hearing evidence today on the U.K. smart meter rollout.
— Inflation ain’t budging. What does this mean for net zero?
Good Thursday Morning and welcome to POLITICO Pro Morning Energy and Climate UK. Days are getting shorter again after Wednesday’s solstice— so here’s a sparkling update to try and keep everyone’s mood up.
As always, please send all your thoughts, musings, tips and critique to [email protected], [email protected] and [email protected] Or talk to us on Twitter: @hargraver; @charliecooper8; @abby_wallace3.
If you are not already a Pro subscriber and would like a free trial of this newsletter, sign up here.
WHAT EVERYONE’S TALKING ABOUT: When MECUK spoke with outgoing Climate Change Committee Chair John Gummer a couple of weeks ago, he found a neat way to express a view we hear constantly from almost everyone working on energy policy.
Quote: If the U.K.’s going to get to net zero, Gummer said, “we need to face up to three words. It’s not ‘education, education, education … It’s grid, grid, grid.’”
Grid anxiety: Yep, the grid. There’s an urgent need to upgrade and expand the U.K.’s electricity network, ready for a 2030s world of carbon-free power, electric cars in every driveway and heat pumps in every home. It’s already front-of-mind for policy folk in the energy sector. But has it hit home with the public?
Big build: The figures are pretty staggering. National Grid estimates that in the next seven years we need to build five times as many transmission lines as were built in the past three decades combined. That’s a whole lot of pylons.
The politics: So what happens when this huge infrastructure-building effort starts to become a reality — and pylon-building in the British countryside becomes the frontline of the U.K.’s net zero debate? Is it going to be net zero versus NIMBYism? Charlie’s piece today digs into the coming politics of pylons.
Shapps on the grid: Energy Secretary Grant Shapps told POLITICO earlier this month: “There’s a massive shift going on. We do have to build a lot of that infrastructure … There’s a huge amount that needs to be done — and we’re having to work very carefully with MPs from across the House.”
Starmer on the grid: In his big energy speech on Monday, Labour Leader Keir Starmer included the net zero power grid and the planning system in the list of “barriers” his party is ready to overcome in order to deliver on its green goals. “We’ve got to roll up our sleeves and start building things and run towards the barriers,” he said.
There’s a problem: Pylons are not popular. At all. Just ask MPs in East Anglia and Essex who have been battling National Grid plans over a new transmission line between Norwich and Tilbury. “In 31 years in politics, I have never known a single issue raise so much passion in my constituency,” said veteran Conservative MP Bernard Jenkin.
Time to lean in? Some think it is time to prepare the public for the work that needs to be done. Alice Delahunty, National Grid’s president of electricity transmission, said it is important to convey the message that this new infrastructure is part of a vital, U.K.-wide effort to get to net zero.
Quote: “This is a national endeavor,” Delahunty said. “It’s about getting to clean, secure, affordable energy. We need to find a way to … recognize the huge responsibility we’re asking communities to take on by housing this infrastructure. They are housing it for an ultimate aim that we are all supportive of.”
 |
ENERGY BILL LATEST: The bill is coming to the end of committee scrutiny — before it heads back to the Commons for its report stage — but super fans can watch the committee sit again today at 11:30 a.m. and 2 p.m.
PAC’s BACK: The Public Accounts Committee is — once again — on MECUK’s radar. Today it hears evidence on the rollout of smart meters. EnergyUK’s Daisy Cross, Citizens Advice’s Anne Pardoe and the Climate Change Committee’s Marcus Shepheard are all due in front of the MPs.
Double trouble: Another session will follow straight after with Ofgem’s Neil Kenward and DESNZ’s Clive Maxwell and Daron Walker.
The topic: The government has set installation targets for energy suppliers as part of its drive to meet its net zero targets, but a recent report from the National Audit Office (NAO) found that the roll out of smart meters has been slower than anticipated.
Shepheard says: “I don’t think we have concerns that there won’t be enough smart meters at some point in the future, but the overall pace is a little bit behind where we think it needs to be,” Shepheard, a senior analyst at the CCC, told MECUK ahead of today’s hearing.
Zoom out: But Shepheard said that initiative tells us more about “how you can do a nationwide program that changes the way consumers relate to energy use.”
Full quote: “As we step up to things like heat pumps, heat networks or other forms of heating such as hydrogen, the learning that we have got from the smart meter roll out will hopefully enable us to do those better — because those are bigger and more challenging things.”
Consumer question: Colin Griffiths, policy lead for smart meters at Citizens Advice, said the government should keep consumers in focus. “It’s ultimately consumers who will pay for the rollout through their energy bills,” he said, “and they deserve a good return for their money.”
**A message from SSE: Actions, not ambitions will secure our energy future. We’re investing over £7m a day in low-carbon energy infrastructure projects across the UK, including building the world’s largest offshore wind farm. SSE. We Power Change. Discover how.**
SKILLS GAP: Our colleagues in Brussels have a special report out today — Bridging the Skills Divide — on the workforce challenges facing the EU as it gears up for a future economy shaped by the tech revolution and the energy transition.
Green Deal Achilles heel: Charlie reports on how the skills gap could weaken the EU’s ambitious plans for developing green energy. “Speak to anyone in the renewable-energy sector and they will tell you that the workforce — or lack thereof — is now the key limiting factor that could hold back Europe’s transition to a green-energy economy, powered predominately by solar, wind and nuclear,” he writes.
LABOUR NORTH SEA BACKLASH: A former Labour leader of Aberdeen City Council has quit the party over its plan to ban new licenses for oil and gas exploration in the North Sea, according to the Aberdeen and Grampian Chamber of Commerce.
GOING NUCLEAR IN PARLIAMENT: The prime minister gave an update on government-backed Great British Nuclear’s looming competition for small modular reactors (SMRs) at PMQs on Wednesday.
The timeline … Responding to a question from Virginia Crosbie — the Conservative MP for Ynys Môn previously dubbed “atomic kitten” by Johnson over her enthusiasm for nuclear — Sunak said he expected the “down selection process” to launch this summer, while the “leading technologies” would be decided in the fall.
MP SUPERGROUP INQUIRY LAUNCH: The liaison committee, made up of chairs of the various House of Commons select committees, is looking into how MPs can improve their scrutiny of government on major topics that span several departments — with net zero strategy one of the key “cross-cutting” issues in their sights. The inquiry is taking written evidence until September 15.
**Our Product Team is exploring decisive advancements to our Pro offering and would love to get your input! Book a conversation slot with them that works best for you.**
INFLATION UPDATE: Figures released on Wednesday showed U.K. inflation sticking at 8.7 percent in May, despite analyst expectations that it would fall. Core inflation figures — which strip out volatile items like energy — actually grew in May, from 6.2 percent to 6.5 percent. Read more from our POLITICO colleague Izabella Kaminska here.
Two more years: Soaring energy prices in the past couple of years have been a key driver of inflation, although wholesale prices have started to cool off considerably. But don’t expect that to mean inflation will drop dramatically any time soon, says Urvish Patel, an economist at the National Institute of Economic and Social Research (NIESR). “We’re currently expecting it to come down to target, which is 2 percent, by mid-2025,” he said.
Hitting renewables: This is bad news for everyone, including those with their eyes set on net zero. Rising prices means the cost of building renewable infrastructure — think large wind turbines — goes up. Ana Musat, executive director of policy and engagement at RenewableUK, recently told MECUK that renewable developers should be given more support under the Contracts for Difference scheme to combat high costs.
A quick primer: The scheme — a contract between a renewable energy developer and the government-owned Low Carbon Contracts Company — is designed to provide developers with price certainty. They’re paid an agreed strike price per MWh of clean energy they produce, but if the market reference price rises above this, the developer has to pay back the difference.
Full quote: Musat said: “It just costs more to build a project, it costs more to get the capital in place because the economic circumstances are so volatile.” She added: “If we even look at steel… [there are] much higher prices this year compared to a couple of years ago and the strike prices under the CfD should really reflect that.”
SANDYS TO GREEN ALLIANCE: Former Conservative MP and all-round energy sage Laura Sandys is joining the Green Alliance think tank as chair. She recently chaired the government’s energy digitalization taskforce and is on the board of the government-backed not-for-profit Energy Systems Catapult. Current chair Graham Wynne stands down next month.
**A message from SSE: The race is on: for green growth, for net zero, for energy security. We need to be bold, today. At SSE, we’re investing in a homegrown energy system. We’re building the world’s largest offshore wind farm to power over 6 million British homes a year. We’re connecting renewable energy, households, and businesses, to a greener grid. We’re pioneering low-carbon technologies. And we’re creating 1000s of sustainable jobs. We’re delivering Britain’s energy future, today. SSE. We power change. Find out more.**