UK election pledges show different paths to net zero

The outcome of the election will have a significant impact on the pace of energy transition, particularly regarding North Sea gas production, writes Georgia Gratton

The UK's two main political parties have set out their plans on energy and climate change in their manifestos, ahead of the country's general election on 4 July. Energy security and the cost to consumers is a common theme, but the two parties diverge on their approach to the energy transition.

Both the incumbent Conservative and opposition Labour parties are committed to the country's goal of achieving net zero emissions by 2050, which is legally-binding and was passed with significant cross-party support under a Conservative government in 2019. The Conservatives have promised a "pragmatic and proportionate" route to achieve that target — guaranteeing "no new green levies or charges". Labour, which according to recent polls is on course to secure a sizeable majority, has pledged to accelerate the path to net zero, and has committed to a zero-carbon UK power system by 2030.

Labour has pledged to "maintain a strategic reserve of gas power stations to guarantee security of supply", but its manifesto does not clarify whether that would involve building any new plants to replace ageing units. In contrast, the Conservative manifesto reiterates previously announced plans to build new gas-fired power stations. The party had previously committed to a decarbonised power network by 2035, in line with a G7 pledge, although that is not mentioned in its manifesto.

Both parties are considering measures that could reduce residential gas demand in the long term. They have pledged to invest similar amounts of public money in energy efficiency schemes — £6.6bn ($8.3bn) over the next parliament for Labour, which it says will be used to upgrade 5mn homes, against £6bn over the next three years for the Conservatives, which their manifesto says will "make a million homes warmer". Labour also plans to work with the private sector, including banks and building societies, to facilitate the provision of further private finance in such schemes. The Conservative Party announced that it will fund an "energy efficiency voucher scheme", without providing further details.

The different pace of the parties' energy transition plans is apparent from their respective renewable energy targets. Labour's plans to "double onshore wind, triple solar power, and quadruple offshore wind by 2030" would result in installed capacity of 31GW, 48GW and 59GW, respectively, against an end of 2023 baseline. The Conservatives' target to triple offshore wind by the end of the next parliament would put installed capacity at 44GW in 2029 — below the 50GW target for 2030 set in 2022 — while it said it supports solar and onshore wind in some circumstances. The two main parties support nuclear power, including small modular reactors, although those are unlikely to be operational until after 2030. And both pledge to cut planning bureaucracy and tackle grid connections.

Diverging upstream

The parties have adopted markedly different positions with regard to North Sea oil and gas production. Labour is clear that it "will not revoke existing licences" in the North Sea, but it will not issue any new licences for oil, gas or coal exploration or production, and has pledged to "ban fracking for good". The Conservatives have restated their aim to legislate for annual North Sea licensing rounds, and to "retain the current moratorium on fracking".

The Conservative Party aims to keep the windfall tax — which effectively results in a 75pc rate — on oil and gas producers' profits in place "until 2028-29, unless prices fall back to normal sooner". Labour has confirmed plans to lift the rate to 78pc and to retain the tax until the end of the next parliament, which is likely to be mid-2029.