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Advertorial: in association with Hitachi Energy

The energy sector reform the UK needs

A New Statesman roundtable discussion at the Conservative Party conference convened key stakeholders on what change looks like.

The election may only be next year, but the outlines of the policy debate are already coming into focus. And though there’s increasing recognition that Britain requires urgent reform everywhere, from healthcare to policing, one area is receiving particular attention: energy.

If investment in Britain’s power infrastructure is widely recognised as vital to the country’s future security – even as the green transition promises to create vast opportunities for communities up and down the country – how and where can these broad aspirations be achieved in practice?

That’s what delegates to the Conservative Party conference recently gathered to explore at a New Statesman roundtable discussion hosted in partnership with Hitachi Energy. Given the national scope of energy policy, the conversation was largely shaped by the role of the state.

As one industry spokesperson noted, Britain’s solar factory sector is expected to grow by 2 per cent over the next decade, far less than countries like China or Indonesia. The insider partly blamed this sluggishness on the sway of local Nimbys. “Are we going to do really significant grid and planning reform?” is how they put it. “Are we going to do investment, and justify that to the public?”

If a supply-side revolution in parliament and bolstering investor confidence are both important pillars of Britain’s energy transition, speakers equally emphasised the need to secure public support. To quote the head of one trade association: “We’re all saying that the communications piece is the most important.”

In practice, participants agreed that economic self-interest could help smooth over Nimby objections. On a macro level, one way of doing this might be appealing to patriotism. “Even if you don’t believe in net zero,” suggested one parliamentarian on the panel, “then surely you must think it’s a good thing to have energy generation here in the UK, rather than being reliant on Saudi sheikhs or Putin.”

Speakers made similar arguments around the specific benefits that projects could offer local communities. As the trade association boss explained, even “a relatively modest plan” for offshore wind production, developed jointly by government and industry, could create added gross value of £92bn for the economy – and unlock around 100,000 jobs in places as varied as Humberside and Aberdeenshire. And the low cost of renewables generated by such projects was another obvious benefit noted by participants.

Winning public backing for energy investments would clearly be beneficial, as would loosening restrictive planning laws. But when applications to the grid are up 75 per cent – and the UK has the fourth-highest electricity costs in Europe – insiders must equally reflect on exactly what to greenlight.

Expanding power transmission infrastructure seems especially urgent. As the parliamentarian explained, the country is currently spending hundreds of millions of pounds in constraint payments to energy generators in Scotland and elsewhere – simply because Britain doesn’t have the grid infrastructure to absorb all the energy produced.

The same could be said, they added, of wind farms off East Anglia, where there aren’t enough power lines to get electricity to the mainland towns that need it.

Beyond these fundamentals, speakers showed enthusiasm for a range of green energy technologies. Wind and solar are two obvious examples, with the parliamentarian noting that the UK already has as much solar on the national grid as France. Hydrogen is another area of focus, as is nuclear, dovetailing neatly with government plans to build a number of small modular reactors through private developers.

It would be wrong to imply, however, that investment in mega-projects is the only way forward. On the contrary, speakers were also united in stressing the power of more modest initiatives. Consider smart meters – the parliamentarian noted that 83,000 are installed each week – machines that can both cut energy usage and save money for customers.

In a similar vein, one industry veteran highlighted the impact that thoughtful urban planning could have here, implying that a light railway network could plausibly do as much for Britain’s energy future as a wind farm. “The built environment really has to go hand-in-hand with the energy and transport infrastructure,” they argued, “to deliver for people and businesses places that we can affordably live, and affordably deliver those businesses.”

Together with shifts in education – around 300,000 engineers need to reskill to support the green economy – it seems clear that the green transition will encompass more than just the construction of new renewables infrastructure. Considering the scale of the challenge, that’s surely just as well.

But something all participants agreed on was the need for speed. We need new ways of working and faster decision-making to reach net zero. There is no time to spare.

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