Updated Nov 2016
Energy & Climate Change
The UK must continue to be at the forefront of fighting for action on the catastrophic global threat of climate change. The consequences of not doing so are immense. As sea levels rise as a result of weather changes, land and resources will become more scarce. Extreme weather events such as flooding, hurricanes and drought will occur more and more frequently.
The UK has been a key player in achieving agreements to combat climate change. The government must now play a leading role in implementing the agreements put in place in Paris in 2015 and continue to show international leadership.
We believe the UK itself should have zero carbon emissions by 2050. To achieve this, important changes are needed both to national and global energy markets and to carbon intensive industries. The UK is well placed to achieve this transition and to become a global leader in new low-carbon technologies. This is a huge industrial opportunity and it would insulate the economy against the risks of both climate-related shocks and an over-reliance on obsolete industries.
The energy market is in need of reform to provide more competition and support low carbon industries
UK energy markets do not currently work well either for consumers or new entrants. Consumers feel they are being ripped off and have very little confidence this can or will change. While supply beyond “the big six” has broadened, they still control 80% of the market and it is still hard for new entrants to compete. This keeps prices artificially inflated and also means there is less pressure on the market to innovate.
We believe that increased local and municipal market participation would shift the energy market to one which is responsive both to the needs of consumers and the need to decarbonise. Cities should be at the heart of technological and planning advances, both in terms of energy generation and also efficiency. Local authorities and other community-based projects should play an increased role in any future energy market.
We do not support any one type of low carbon energy over another. Instead, we believe that the UK should have a strong mix of technologies. However, we are clear that small scale, decentralised technologies are set to radically transform how energy systems operate, bringing to an end the dominance of centralised generation and distribution, and giving rise to a system which is far more decentralised and, as a result, more competitive. To allow these technologies to achieve their potential the energy policy framework must be rebalanced away from its current focus on large-scale technologies.
Cooperating with neighbouring countries is a cheaper and more efficient approach to managing the energy system than taking action unilaterally. The UK must work with partners internationally to create truly interconnected markets. As the UK negotiates the terms of Brexit, the government must ensure the UK’s ability to work with European partners to create and mature low-carbon markets.
The UK needs a multi-dimensional industrial strategy
The government’s commitment to industrial strategy, embodied in the new Department for Business, Energy and Industrial Strategy, is very welcome. A multi-dimensional strategy is required to boost levels of innovation, to improve the way existing sectors perform, to facilitate improved economic performance across the regions and nations of the UK, and to maximise the opportunities for all sectors within the process of decarbonisation.
We believe the UK’s industrial strategy should be based on the following principles:
- All objectives and measures of success should be explicit
- An institutional framework for gathering and sharing intelligence is essential
- Public support for a particular sector, firm or innovation should be agile
Government spending should focus on efficiency
The cheapest and least polluting unit of energy is a unit of energy saved. The more the UK incentivises energy efficiency at every level, the better for consumers and for the environment. Energy efficiency should be the first priority in all energy policy.
Previous national policies for energy efficiency were flawed because they were poorly targeted at fuel-poor households. We want to see far better targeting of energy efficiency measures towards fuel-poor households and neighbourhoods and believe that local authorities are best placed to manage this.