Most people in this country want the UK to lead the way on net zero. This is a political fact. It is true for 56 per cent of Conservatives and 73 per cent of Labour voters, according to our recent polling. It applies for both Brexit camps, too: 56 per cent for leave and 72 per cent for remain. We are more united than divided on becoming a green superpower.
And yet the economics of net zero is being increasingly politicised. Voters feel stuck between wanting to tackle climate change and worrying about higher bills. But energy bills will remain volatile for as long as we rely on international gas supply. We can lower bills in the long term and strengthen our economy through a nationwide drive to decarbonise Britain’s homes and increasing the amount of renewable energy on the grid. Rather than diluting and delaying key policies and targets, we need to change how we use energy. Reducing reliance on gas, and making our energy system more flexible and renewables cheaper, will keep bills down whilst creating thousands of jobs and boosting GDP. And all this needs to happen in regions that need it the most.
Such green growth requires substantial funding – but this is an investment, not a cost. The government estimates £250bn would be needed to take us towards a new circular economy where every region, business and individual can seize the huge opportunities of the green transition.
My company OVO, one of the UK’s biggest energy suppliers, has an instrumental role to play in this change. We are in a position to innovate and introduce new products and services that will create a multiplier effect on growth.
Unlocking our economy through transforming our energy use means a vast infrastructure update for the UK and a major drive to boost renewables. But the UK is failing to make the policy decisions necessary to meet net zero by 2050. Three areas stand out.
First, we need to insulate our homes to help us use less energy. Our housing stock is the leakiest in Europe, losing heat up to three times faster than in Germany or Sweden. This lack of proper insulation, combined with our reliance on fossil fuels, means the UK’s housing contributes a third of its total emissions.
The answer? We need a vaccination-style retrofitting drive to rapidly insulate and double glaze our homes. And we must prioritise support for installing insulation for those who will benefit the most from lower bills. There is already some funding in place, but we must go further and faster in reducing barriers to access. Beyond this targeted support, more private and government finance will make it easier for all households to access retrofitting funding.
This retrofitting campaign will bring bills and emissions down quickly as people use less energy to heat their homes. That means there will be more money to spend elsewhere, helping to stimulate the economy after a period of stagnation.
Second, we need to electrify our homes to make more use of renewables. Electrification requires a more flexible grid which adjusts according to consumer demand so we don’t rely on fossil fuels at times of peak usage.
Such a system needs flexibility at home too, which industry can encourage. Customers who are informed about their energy usage can time it to ease pressure on the grid. Last winter, OVO rewarded its customers for using energy at off-peak times. This Power Move scheme has recently expanded across the country, so households stand to gain as much as £15m by using energy at times when it’s typically cleaner and cheaper.
Electricity bills are also made more expensive by related costs – such as social and environmental obligation costs – which help to fund much-needed government levies and discounts. Government should fund these through general taxation so it doesn’t increase the price for households. Not only would this make energy bills lower for everyone, it would also make powering homes on renewable electricity more appealing.
Underscoring all of this is the need for the UK to generate enough renewable energy to consistently meet demand.
Looking across the Atlantic you can see that incentivising investment in renewable energy could boost our economy. In the year since Biden’s Inflation Reduction Act passed, green energy projects in the US have received £218bn of investment – that’s half a billion dollars every day. This towers above the £120bn generated in the UK, spread out over 13 years. To join in the green energy race and unleash its economic potential, we need policies that encourage renewable energy investment.
And we need a workforce equipped to insulate our homes and connect them to our flexible, green grid. The Climate Change Committee estimates that up to 725,000 net new jobs could be created in the green transition. Businesses like OVO must commit to ring-fencing funding to train the workforce and policymakers must incentivise apprenticeships, where applications are falling year on year.
These policies will go down well across the country. A government committed to levelling up will continue to dedicate funding and create jobs in areas like Anglesey, Aberdeen and Hull, where our renewables are currently generated.
Being a green superpower whilst maintaining public support will test UK leadership. The UK has a unique opportunity to innovate and lead the way. With the next general election in sight, it’s time to unite the country behind a net zero ambition that will create opportunity and prosperity for decades to come.
OVO’s fringe event at the Labour Party Conference takes place on 9 October at ACC Liverpool.