On July 4, 2024, the UK general election took place, and the Labour Party won with a significant majority. After 14 years of Conservative Party rule, a number of changes are now expected in respect of the UK's position on climate change policy.
Great British Energy
Ed Miliband, the newly appointed Secretary of State for Energy Security and Net Zero, issued a statement on July 5, 2024, in which he explained that one of the new prime minister's national missions is "to make Britain a clean energy superpower with zero carbon electricity by 2030, and accelerating our journey to net zero."
The new government intends to increase energy independence and cut bills through the delivery of clean power by 2030 by establishing Great British Energy ("GB Energy"), a new state-owned green energy company. It is expected that the GB Energy will be established in the coming months with the passing of new legislation in Parliament.
GB Energy's goal is to work closely with the private sector to co-invest in emerging technologies and to scale investment in existing mature technologies. This would include investment in hydrogen, offshore and onshore wind, tidal power, solar power, and nuclear energy. To achieve this, the government will need to dramatically accelerate the delivery of energy and infrastructure projects in the United Kingdom and ensure that the creaking national grid is upgraded to support this delivery. There will also need to be a raft of amendments to planning policy and legislation to facilitate this.
Onshore Wind
The new government has already reversed the nine-year moratorium on new onshore windfarms by issuing a policy statement lifting the de facto ban on onshore wind development. The aim is to double onshore wind energy by 2030. To do this, planning policy has been amended to ensure that the onshore wind applications will be treated in the same way as other energy development proposals. Previously, proposals for onshore wind development were subject to a much higher bar than other energy projects, as they needed to be allocated in a development plan (or order) and have the support of the local community. These policy tests no longer apply, and the National Planning Policy Framework will be updated accordingly.
The fact that these policy changes were made within four days of the election would appear to show the speed at which the new government intends to move in supporting the delivery of green energy projects.
Domestic Fossil Fuel
In its manifesto, the Labour Party confirmed that no new licenses for oil and gas production in the North Sea will be issued, and no new coal licenses or permissions for fracking will be granted. It remains to be seen whether license applications currently in process will be granted.
Mission Control
Ed Miliband, the Energy Secretary, has also appointed Chris Stark, former chief executive of the Climate Change Committee, to head a new "Mission Control," which is tasked with focusing on accelerating the transition away from the fossil fuel markets to clean, homegrown power.
It seems the intention is for "Mission Control" to be a taskforce working with key energy companies and organizations, including the regulator Ofgem, the National Grid, and the Electricity System Operator to unblock obstacles and support the accelerated delivery of new green energy projects.
Green Finance
The Labour Party has also committed to making the United Kingdom the green finance capital of the world. It intends to mandate that all UK-regulated financial institutions—including banks, asset managers, pension funds, insurers, and FTSE 100 companies—develop and implement credible transition plans that align with the 1.5-degree goal of the Paris Agreement. Details on legislation to enact this mandate have not yet been released.
Electric Cars
The Labour Party manifesto also makes it clear that the government will support the transition to electric vehicles by accelerating the roll-out of charging points and restoring the phase-out date of 2030 for new cars with internal combustion engines.
The Labour Party's ambitious climate change goals will require significant policy and legislation efforts in the near term to flesh out the details of how they will be accomplished. Companies should continue to keep a close eye on these developments and consult with experienced counsel regarding how changes may impact their business operations.
