Written by Michael Zdanowski, Head of Energy, Madano
While stalling “Brexit” negotiations, an uncertain economic outlook and a resurgent left under Jeremy Corbyn have dominated political discourse in the run-up to the Conservative Party Conference, those working in energy must certainly be encouraged by the number of events focused on the sector in Manchester today.
A panoply of events attended by senior Government ministers, Richard Harrington and Claire Perry, as well as the Secretary of State for Business, Energy and Industrial Strategy (BEIS), Greg Clark, reinforce the renewed importance of the energy sector to a UK that is faced with the dual challenge of leaving the European Union while engendering its long-term economic growth prospects.
Why is this the case and what has been discussed?
Firstly, Government and the energy sector both recognise that we are witnessing the most profound and wholesale transformation in the UK’s energy system since electrification. This revolution brings huge opportunity both at home and abroad. Government and the energy industry have discussed today the new technologies that will reshape our energy futures – from SMRs, to CCS, wind, solar and electric vehicles. Lots of talk also about the four “ds” – decarbonisation, digitalisation, decentralisation and democratisation. These opportunities bring major challenges too. Today discussion took place on how to integrate EVs on the grid; how to decarbonise heat; and the siting implications of SMRs.
Secondly, energy is absolutely fundamental to the UK’s new Industrial Strategy. This is, as one speaker today put it, a strategy that will be “with us to 2050”. Without cracking the energy challenge, which will see up to two-thirds of the UK’s current generation capacity go by 2030, there is no way that the UK can begin to restructure an economy that continues to lag behind in productivity compared to its European neighbours. The Faraday Challenge – a £246m investment to unlock the UK’s expertise in battery technology – is just one example of the Government’s aim to address the productivity challenge by seeking to build a new home-grown UK industry in energy technology. As Claire Perry put it today, grouping energy and industry is “totemic” and will help the UK set out its long-term strategy on where it wants to go.
Thirdly, the UK has reached an inflection point over the price of energy for homes and business. There is genuine recognition that energy costs faced by consumers and businesses are simply too high. Victoria MacGregor, Director of Energy at Citizens Advice, today talked emotively about the real choice that many people face in terms of having to choose between eating or heating their homes. With consumer energy bills up 8.3% over the past year, Greg Clark today gave regulator Ofgem one last chance to address the issue of the Standard Variable Tariff before Government directly intervenes in the market.
Finally, new polling suggesting that climate change is now the top political issue for 18-28 year olds means that the low-carbon future discussed today is likely to be a major vote winner in future. Making the low-carbon future a tangible reality is not just a vote-winning imperative, it is also enshrined in legislation at national, European and global levels. For this and the reasons outlined above, it is therefore unsurprising that energy has been such an important point of focus at this year Conservative Party Conference.
Madano works with and advises clients on communications strategies in the energy sector.