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UK election: What would a Labour win mean for wind?

With two weeks until UK election day, Sir Keir Starmer’s Labour Party is far ahead of the ruling Conservatives and the prospect of a change of government is in sight. But the party must give more details on how it plans to double onshore wind and quadruple offshore wind capacity by 2030.

RICHARD HEAP

June 18, 2024

  • People in the UK are due to vote in a general election on 4th July
  • The Conservative Party is on track to lose after 14 years in power
  • Labour plans state-backed green energy firm, but faces challenges too

 

The UK is now halfway through it general election campaign and it’s fair to say it isn’t going how Prime Minister Rishi Sunak wanted on the day of that rain-soaked launch.

Sir Keir Starmer’s Labour Party is far ahead of Sunak’s Conservative Party, with latest opinion polls showing that around 42% of voters intend to pick a Labour candidate on 4th July. This is double the 21% that favour the Conservatives.

The return of the divisive figure of Nigel Farage to frontline politics as leader of the right-wing populist party Reform UK is further eating into Conservative votes. It is currently polling at 15% while stoking debates about the climate and net zero.

As a result, some analysts are predicting that Sunak faces a hammering at the polls and maybe a landslide loss of historic proportions. Last week, defence secretary Grant Shapps warned about the threat of Labour ending up with a “super-majority” if it achieves a landslide win “the size of Blair’s or even bigger”.

There’s still half an election campaign to go, and Starmer faces his own difficulties enthusing voters and those on the left wing of his own party. But the party has reached the halfway point with a sense of relief, so it is worth asking what a Labour government would mean for wind.

 

State-owned renewables investor

Labour’s flagship energy policy is to form a state-owned group, Great British Energy, to support investment in sectors including wind. These include established technologies such as onshore and fixed-bottom offshore wind, and newer technologies such as floating wind. It is set to be backed with £8.3bn public funding by mid-2029.

The approach sounds similar to the UK Green Investment Bank formed by the Conservatives and Liberal Democrats in 2012 when they ruled the UK in coalition. The UK GIB was later sold to Macquarie, in 2017, and re-branded as the Green Investment Group.

There is little detail on how Great British Energy is set to operate, although the Labour manifesto last week did share some details. GBE is set to be funded by a windfall tax on oil and gas giants, and those funds will be used to crowd in private investment for capital-intensive schemes.

This approach is typically used for projects with technologies regarded by banks and other investors as too risky, so we would expect to see it deployed for projects using floating wind turbines or green hydrogen. The case for GBE to get involved is weaker for technologies with a strong commercial track record, such as onshore wind and solar.

However, the bigger challenge for Labour to meet its commitment to end the use of fossil fuels for electricity generation by 2030 is how it can unlock accelerate development of onshore renewables and offshore wind.

In onshore wind specifically, the party has committed to double onshore wind capacity to 30GW installed by 2030, but has given little indication of how it plans to resolve longstanding hurdles with the planning system that have acted as a block on wind projects across England.

Prime Minister Sunak has said that in September 2023 he ended the de facto ban on building onshore wind farms in England that was put in place shortly after the Conservatives won the 2015 election. Even so, this change has had little effect because it has not been accompanied with changes to the planning system. Labour needs to find ways to make those changes and reduce the powers of objectors.

This is where the growth of Reform UK could cause headaches for Starmer, as Reform’s arguments could undermine what has been a relative period of consensus about the role of net zero targets in UK energy policy. Reform is arguing that the UK should end its net zero commitments; scrap subsidies for renewables; and fast track licences for North Sea gas, shale gas, and small nuclear schemes. It may not get the chance to enact its policies, but we are likely to see more moves to put energy policy and anti-renewables rhetoric at the centre of a ‘culture’ war.

Separately, Labour doesn’t appear to have done enough to distance itself from unrealistic Conservative targets for offshore wind. The Institute for Public Policy Research warned this month that the UK is well off track to deliver a Conservative target of 50GW installed wind in its waters by 2030, which former prime minister Boris Johnson raised from 30GW in two announcements between October 2020 and April 2022.

However, the Labour manifesto commits to a quadrupling of offshore wind by 2030. With 14GW currently installed in UK waters, that would commit it to a target of 56GW by 2030. Many in the industry believed that the 50GW target was unrealistic even before recent challenges with inflation and the supply chain, which rendered the UK’s 2023 Contracts for Difference tender a non-event for offshore wind. This explicit target could put Labour on the back foot to explain why it isn’t hitting its targets, and will damage any efforts to argue that Johnson set the offshore wind targets too high.

Finally, other parties such as the Greens and Liberal Democrats will call for faster action on net zero, which could tarnish Labour environmental credentials in a similar way as its recent high-profile U-turn on £28bn green spending.

None of this will be easy. There are no quick fixes for energy policy, and Labour will likely have to tackle the issues while its rivals deride is as either too green and not green enough.

But, after 14 years in opposition, the party would welcome that challenge, as long as it gets the result it craves in three weeks’ time.