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— The Public Accounts Committee is back again. It warns the government’s plan to hit its 2030 decarbonization target is in trouble.
— The Supreme Court hears a case today on whether planning permission for an oil field was granted unlawfully. What does this mean for future fossil fuel projects?
— The government has stripped the Energy Bill of a Lib Dem amendment on coal. We dissect the fall out.
Good Wednesday morning and welcome to POLITICO Pro Morning Energy and Climate UK. You’re halfway through the week — thanks for sticking with us. Here’s your latest update.
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TARGET TROUBLE: The government has no “coherent” plan for decarbonizing the U.K.’s power supply by 2035 — a critical milestone on the road to net zero by 2050. That’s the verdict of the influential Public Accounts Committee (PAC) of MPs in a fairly blistering report this morning. POLITICO has it covered here.
Credibility problem: The PAC’s report doesn’t beat around the bush, with MPs questioning whether government plans for expanding nuclear, solar and wind power are “credible.”
Nuclear options: Ministers want the U.K. to have electricity generating capacity of 24 gigawatts for nuclear by 2050, 70GW for solar by 2035 and 50GW for offshore wind by 2030. But looking at nuclear, the committee said the government’s aims depended upon “nascent technologies” in the shape of small modular reactors which are “untested in the U.K. and not operating at scale anywhere in the world.”
Deadline: The Department for Energy Security and Net Zero told the inquiry that it does plan to publish, by fall 2023, “a delivery plan of its portfolio of activities, and report annually thereafter as part of its response to the Climate Change Committee’s (CCC) regular progress reports.” The PAC said that they needed to publish the plan “as soon as possible” and by the fall “at the latest.”
More to come … The PAC report — which doesn’t even get into some of the other challenges to decarbonizing power, like grid capacity — comes one week ahead of the CCC’s new progress report to parliament, which seems likely to be an equally enjoyable read for ministers.
Glasshouses: And while Labour might be tempted to gloat, it should be noted that their own target for decarbonizing the power sector is five years earlier, in 2030. Which means any incoming Labour government will have a maximum of six years to do what the government is currently struggling to achieve in 12.
WHO PAYS? But perhaps the biggest question raised by the report — and one that neither Conservatives nor Labour have answered in detail — is whether and how the costs of decarbonizing power will fall on energy bills or taxpayers. The government has estimated that £280 billion to £400 billion in public and private investment in new generating capacity will be needed by 2037, PAC says. But the report warns that DESNZ has “not yet assessed what this ultimately means for energy bill and taxpayers.”
Meg sez: Committee chair Meg Hillier said that the U.K. needed “an overarching plan charting the way” to give businesses and consumers confidence. “There is an information vacuum in key areas — energy efficiency, investment, the cost of the transition to the public — that must be addressed,” she said.
DESNZ responds: A rather bullish spokesperson said: “Far from the committee’s claims, our plan to power up Britain seizes opportunities from our transition to a decarbonized energy system.”
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THE GLOBAL STAGE: Secretary of State for Energy Security and Net Zero Grant Shapps will attend the Ukraine Recovery Conference today, which will focus on how the international community can support the rebuilding of the country, including its energy infrastructure. Shapps will meet with German Galushchenko, the Ukraine energy minister, with the chat live on DESNZ’s Twitter feed from 4.30pm.
Bolstered: Shapps said: “The U.K. has led the powerful international support for our Ukrainian allies, against Putin’s barbaric and unjustified invasion. That support will continue through their country’s recovery and will include bolstering Ukraine’s energy security and independence to better shield against Russia’s malevolent actions in the future.”
BRAZIL-BOUND: Energy Minister Graham Stuart lands in Brazil this morning for a four-day trip encompassing São Paulo, Brasilia, and the Amazon, meeting ministers, businesses and local communities.
COP30: Brazilian city Belém is set to host the UN climate summit in 2025 — and Stuart is aiming to launch a “COP2COP” dialog, his office said, to share what the U.K. learned from hosting COP in Glasgow in 2021.
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ENERGY BILL UPDATE: As the Bill goes through its committee stages, the government has stripped out a Liberal Democrat amendment aimed at banning new coal mines. Energy Minister Andrew Bowie said in the committee on Tuesday that despite the phase out of coal power stations, there would continue to be demand for coal from sectors including steel, cement and, erm “heritage railways.”
Not over: Labour’s Kerry McCarthy opposed the government’s approach in the bill committee and a Lib Dem official told MECUK that they would look to bring back the amendment once the Bill returns to the House of Commons.
Bill’s next steps: There’s another round of bill committee discussions on Thursday, before plenty more Labour-backed amendments — including on fracking, onshore wind, and North Sea fossil fuels — are discussed next week, in what is expected to be the final few days before the Bill completes committee stage.
CBAM JITTERS: The House of Commons European Scrutiny Committee (aka the Bill Cash committee) has been drilling into the implications of the EU’s carbon border adjustment mechanism (CBAM) for the U.K. — and it’s not happy.
Brussels red tape klaxon: Their analysis, published Tuesday, warns of “burdensome bureaucracy for U.K. businesses” arising from the upcoming EU levy on carbon-intensive imports. The U.K. is currently planning its own version of CBAM, with the consultation due to close this week.
SUN POLL: A lot of reaction yesterday to the Sun’s big polling story on net zero. The paper led on YouGov’s finding that 62 percent of people backed a statement saying the government “should prioritize keeping down the cost of living over taking actions to help the U.K. reach net zero.”
But but but … The same poll also found that 65 percent of people back net zero as a policy, versus only 19 percent who don’t. The public were also split — 37 percent for and 37 percent against — when asked whether they thought it was possible for the U.K. to hit net zero without increasing the cost of living.
No easy win: Sam Hall, director of the Conservative Environment Network said there was “no way to keep down cost of living without climate action” and said the polling implied, wrongly, that there was a “cost-free ‘do nothing’ option.” Full poll data here.
Step back: The fact that one of the country’s most popular newspapers is taking this editorial line is, in itself, relevant to the politics of net zero. But the polling suggests that public opinion is what it has always been: complex. Not a slam dunk for the net zero skeptics, as Jack Richardson of the Onward think tank points out — but not a clear cut win for the green lobby either.
LABOUR PLAN DOCUMENT: Mea culpa that MECUK on Tuesday forgot to include a link to the full detailed document setting out Labour’s energy plans for your perusal. You can find it here.
STARMER SOFTENS STANCE : Analysts at Wood Mackenzie have poured cold water on Starmer’s plan for oil and gas. Analyst Greg Roddick said Starmer was softening his plans because the ban only applies to future oil and gas licenses, where there is “no guarantee that new, commercial discoveries will be found.”
Full quote: “Opportunities in existing licenses are more material and, in recent years, exploration drilling has already dropped to historic lows,” Roddick said.
HORSE HILL HEARING: A Supreme Court hearing today will consider whether new oil drilling at the Horse Hill site in Surrey should have been given the green light.
Context: The site was granted planning permission from Surrey County Council in 2019. Further drilling would mean the site could produce up to 3.3 million tons of crude oil to be used as transport fuel over the course of 20 years, lawyers say.
THE LEGAL CHALLENGE: The challenge is being led by the climate campaigner, Sarah Finch, on behalf of the climate action organisation, Weald Action Group. Finch is arguing that the council should have taken into consideration the downstream — or end use — emissions of oil extracted from the wells in its environmental impact assessment before approving the project.
BIG NAMES WEIGH IN: Green campaign groups, including Friends of the Earth and Greenpeace, have intervened behind Finch. The U.K. environment watchdog, the Office for Environmental Protection, has also weighed in on a legal case for the first time, saying that previous decisions had left the law in “an uncertain position.”
… and in the other corner: West Cumbria Mining — the company behind the Whitehaven coal mine approved in December — have also intervened.
LEGAL TALK: “Clearly the proposers of that coal mine do think it will impact on them because they’re intervening in this case,” said Sam Fowles, a lawyer at Cornerstone, which specializes in planning and environmental law.
Significance: “The reason this case is so important is that it’s the first time that the Supreme Court will ever have considered the question of whether end use emissions from fossil fuel projects should be included in the environment impact assessment,” Katie de Kauwe, Friends of the Earth’s lawyer, told MECUK.
What’s at stake? The people granting planning permission have to consider all direct and indirect environmental impacts before they approve new projects. Fowles said if the court rules that “indirect” environmental impacts include end use emissions, these decision makers will have to “take more information into account when making their decision.”
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