What does the UK election mean for the wind sector?


June 16, 2017

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For the UK’s Conservative Party to lose one unnecessary vote might be regarded as a misfortune. To lose both looks like carelessness.

But with the Brexit referendum 12 months ago and the election last week – which Prime Minister Theresa May called to bolster her position but achieved a hung parliament – that is the reality for the UK. And it is undeniable that last week’s election has only added more uncertainty for British businesses.

The UK was already heading into complex negotiations to exit the European Union, which will shape the trading relationships between British firms and their EU partners. These must be done by March 2019, which was always going to be tight but at least we had a plan of sorts.

Now we have a prime minister with a minority government that, propped up by the Democratic Unionist Party, is posing a threat to the Northern Ireland peace process. Now we have a changing roster of ministers in the department leading Brexit, ahead of official talks starting next week. And now we have chance that the Conservatives could be ousted by a Labour Party which, under Jeremy Corbyn, is in thrall to hard-left policies. There are a myriad concerns for UK businesses, in addition to Brexit.

And within all of this sits energy policy. The Conservatives’ big manifesto pledge was to cap energy prices, which is a major shift from its ideology of not intervening in free markets, but that policy is now in doubt.

The party also said it would not support big onshore wind farms in England but would support them on remote Scottish islands; and reiterated its support for offshore wind. At least the latter of those is positive.

How might the approach to onshore wind change in this new government?

The first thing to say is there has been a lot of focus on the policies of the climate-change-denying DUP, on whose ten MPs the Conservatives will be relying for votes in the House of Commons. The DUP’s manifesto called for cheap energy but did not actively back renewables. It could force the Conservatives to get tougher on wind.

However, we are not quite that pessimistic. If the Conservatives learn anything from this election – and they will have to – it is that they must do more to appeal to those across the political spectrum, and particularly the young. As official government stats show that 73% of people support the growth of onshore wind, alongside the 80% for offshore wind, then giving more support to this industry would show it is listening.

In fact, Labour campaigned on a manifesto that would help wind: it pledged that 60% of UK energy should come from renewables or zero-carbon sources by 2030. Doing more to embrace onshore wind could be a palatable cross-party compromise.

There is hope this parliament could be a moderating influence on the Conservative approach until now, much as the Liberal Democrats were in the coalition government from 2010 to 2015. Well, in uncertain times we may as well look for a bright side!

Plans to reform the energy market with a price cap might be tougher to shift, though, given that a similar idea was in a Labour manifesto as recently as 2015 and Corbyn’s instincts are towards interfering with markets he sees as unfair. Any suggestion that the UK does not have a free energy market would, of course, be a concern for firms in this sector.

The hope for those who hate this policy is that the Conservatives won’t have the stomach for a fight while they are in protracted Brexit talks with the EU.

And ultimately for UK companies, including in the wind sector, it is those Brexit talks that will have the biggest impact on business. The lack of a strong mandate for May could lead us to a ‘softer’ Brexit where the UK keeps its place in the single market – or the tougher situation at home could make “no deal” more likely. We don’t know. There is even talk Brexit could be scrapped as the negative impacts become clear.

For the UK, it’s time to hunker down and hope to find a way out of this mess.

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