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— The next phase of the Energy Bill is now expected after the summer, creating weeks of delay.
— The government goes to court over U.K. net zero plans (for a second time).
— The global cost if renewables manufacturing is short of essential minerals? $3 trillion.
A very warm welcome to Friday’s POLITICO Pro Morning Energy and Climate UK. Abby is still hunting tulips in Amsterdam and Charlie is busy choosing his outfit to go and see Bruce Springsteen in concert — so this is Russ flying solo for the day.
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WHERE’S THE ENERGY BILL GONE? The Energy Bill was widely expected to reach Report Stage in the House of Commons next week, one of its final hurdles before becoming law. But the parliamentary schedule for the next fortnight was released on Thursday — and there was no sign of it.
Take a break: That schedule takes us right up to recess, when MPs head off for their summer holidays. So it seems the earliest the Bill might be debated again is the first week of September. A full two months away.
DESNZ THEN: Asked back in June whether the Energy Bill would be law by the summer, Grant Shapps, secretary of state for energy security and net zero, told POLITICO: “I hope so, subject to the vagaries of parliamentary procedure and procedure.”
DESNZ NOW: A spokesperson told MECUK late on Thursday: “We are keen to ensure the Energy Bill is progressed through parliament in a timely fashion to ensure we can deliver a cleaner, more affordable and secure energy system. Future stages of the Bill’s passage are subject to the parliamentary timetable, with the aim of completing passage this session.” Which suggests some time in the autumn.
STUFF THAT MATTERS: So for several weeks there’ll be no chance to debate the meat of the legislation, which covers myriad complex regulatory details of the future energy system. But we will also have to wait to see which proposed Bill amendments are selected for a vote, some of which have significant importance to the energy sector. They include an eleventh-hour bid to secure more funding to develop cleaner jet fuel and a proposed independent body to advise on the future of North Sea drilling. All of this has disappeared into the long grass for a while.
INVESTMENT WORRY: Jess Ralston, head of energy at the Energy & Climate Intelligence Unit, said the delay may give green firms and investors another reason to hesitate over committing to the U.K.
Quote: “A delay on the Energy Bill will have a massive ripple effect on the rest of the energy sector,” Ralston told MECUK, adding: “Why would you invest in the U.K. when we don’t have an incentive package that matches the IRA [the U.S. Inflation Reduction Act] or EU’s Net Zero Industry Act, and now we don’t even have the legislation, maybe, to back it up? It really isn’t helpful.”
Moving away: She added: “We will see consequences of that delay [to legislation]. We will see more businesses leave, or we certainly could do.”
ENERGY UK: Industry body Energy UK raised the same concerns. “It is very disappointing to hear about this delay to the passage of the Bill,” a spokesperson said. “The important reforms and measures it includes are needed more than ever after the energy crisis to help accelerate the energy transition — and with increasing competition from abroad, delays in implementation risk costing the U.K. investment in new technologies and jobs.”
GET ON WITH IT: Labour, unsurprisingly, think the delay is an indictment of the government. Shadow Energy Minister Alan Whitehead MP said: “There was a real understanding that the Energy Bill would pass before summer recess, and we could then get on with implementing key elements of the Bill that will help in decarbonizing our economy. This latest blow represents a massive failure of leadership from the government, with passage of the Bill now delayed yet again.”
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SEE YOU IN COURT (AGAIN): Campaigners have mounted a legal challenge against the government’s revised net zero plan, saying that ministers have “failed to honor their climate commitments.”
Who is doing what: Friends of the Earth, ClientEarth and the Good Law Project — Jolyon Maugham’s outfit — have applied to the High Court for a judicial review of the revised strategy.
Looks familiar: The government only revised its plans because the same three organizations made a successful legal challenge 12 months ago. But the campaigners say that last week’s highly-critical report from the Climate Change Committee is evidence that DESNZ still isn’t meeting its legal obligations under the Climate Change Act. So, here we all are again.
What the campaigners say: In a statement, the three organizations argued that the current Whitehall plan “provides no real information on the government’s assessment of the risk of the proposals and policies not being delivered and not meeting legally binding climate targets.” Plus the strategy relies on “high risk” assumptions that new technology will be developed in time to hit net zero targets, they say.
Quote: “We said we’d take the government to court again if we believed that they’d failed to honor their climate commitments — and this is exactly what we are now doing,” said Katie de Kauwe, a lawyer for Friends of the Earth.
Government says: A government spokesperson responded: “We strongly reject these claims and will be robustly defending these legal challenges. We have met all our carbon budgets to date and are on track to do so in future, creating jobs and investment across the U.K. whilst reducing emissions.”
What happens next? Campaigners expect to receive the government’s response to their filings in the next few weeks, MECUK understands, at which point the organizations can reply and then a judge will decide how to proceed. If they allow a judicial review, that is likely to be heard in the autumn or winter this year.
**A message from SSE: How can we make the UK the easiest place in the world to invest in and build clean energy infrastructure? SSE has a plan to help the Government unleash a decade of delivery. Actions not ambitions will secure our energy future. Discover more.**
NEXT WEEK IN PARLIAMENT: It’s a Friday, so no MPs are sitting today. But coming up in parliament next week …
Tuesday: Conservative MP Peter Aldous leads a Westminster Hall debate on renewable energy in the east of England … There are oral questions in the House of Lords on how the U.K. can prepare for global temperatures rising to 4 degrees above pre-industrial revolution levels by 2100.
Wednesday: The energy security and net zero select committee will consider the work of the department, with evidence from the North Sea Transition Authority and the UK Atomic Energy Agency at 1.15 p.m … The Lords will hear oral questions about carbon capture in the concrete industry.
Thursday: Oral questions in the Lords on the case for setting green procurement targets for carbon-intensive industries as part of the U.K. emissions capping scheme.
CHARITIES DIVEST: The U.K. net zero debate may focus on the contribution of the public and private sectors, but campaigners are calling on charities to get serious about the role they can play.
Do gooders, doing good: The National Council for Voluntary Organizations (NCVO), a membership body representing 17,000 charities, said on Thursday that the sector should divest from its fossil fuel investments. This is another way for charities “to help secure a better future for their communities,” campaigners said.
Size matters: Remember — charity is a multi-billion pound industry. NCVO estimates that U.K. charities hold investment assets worth about £118 billion, and it wants the sector to trawl through those assets and make a permanent shift away from carbon-intensive investments.
MISSING MINERALS: Hitting net zero targets relies on boosting low-carbon technology — and that relies on having access to the minerals needed to develop clean (or cleaner) tech. We may be about to hit a problem, according to consulting giant McKinsey.
Short supply: Their latest report warns that global demand for some minerals is likely to outstrip supply between now and 2030. Shortages of nickel and dysprosium (both used in, among other things, manufacturing electric vehicles) threaten to derail the net zero transition.
How much? The research puts a price tag on mitigating the shortage (of course it does, this is McKinsey). Investing in the necessary mining, refining and smelting will take global costs up to at least $3 trillion by 2030.
RETURN OF THE ZAC: Former minister Zac Goldsmith, who quit the government last week accusing Prime Minister Rishi Sunak of being “uninterested” in climate policy, doubled down in an interview with Channel 4 News last night. Goldsmith said of the PM: “He’s not in the net zero skeptic camp … He’s just not motivated by these issues, he’s not interested, they don’t move him.”
NIT ZERO: In the week’s most unexpected news, MECUK picked up rumors late Thursday of a bed bug problem in DESNZ’s Victoria Street HQ. We have approached officials there for comment. If it’s true, staff have our sympathy — they’re an absolute nightmare.
| SMART METERS TARGETS CHANGE |
The cupboard under the stairs: Smart meters — which replace estimated energy-use with actual data sent directly to suppliers — play a crucial role in the government’s net zero plans. Indeed, DESNZ says they “underpin” the whole strategy.
But but but … Under pressure from the firms which put new meters into homes and businesses, the government has reduced targets for how quickly smart meters should be installed across the U.K. However, it has made these targets legally binding on installers.
How we got here: Back in 2022, the government announced ambitious plans to ramp up smart meter installation. Companies were set annual installation targets with a goal of hitting 100 percent smart coverage by the end of 2025. DESNZ consulted with the industry earlier this year to check on progress, and published a response on Thursday.
Feel the ambition: The consultation showed that energy and meter suppliers — the majority of the bodies which responded to the consultation — expect to miss the initial targets. Or, in the language of a government policy document: “[R]espondents were also concerned that the proposed installation requirements for year 3 (2024) and year 4 (2025) set a level of ambition beyond what industry would be able to achieve in the latter part of the framework.”
Down a bit: In response, the government has “lowered the minimum market-wide smart coverage we project to reach by 2025 to 74.1 percent.”
Right in the wallet: The Liberal Democrats jumped on the new data. “The government have once again watered down the smart meter rollout, hitting people’s bills right at the time when they could use the money the most,” said Wera Hobhouse, the party’s climate and energy spokesperson.
Innovate your way out of trouble? Lower targets are the wrong approach, Tone Langengen, a senior adviser at the Tony Blair Institute for Global Change, told MECUK. “Rather than reducing the targets, the government should seek to find the policy solutions and enablers to help speed up the roll-out.”
DESNZ speaks: A spokesperson for the department said: “Previous targets for the smart meter rollout were proposals, and based on further evidence we’re now making installation targets for 2024 and 2025 legally binding so they remain ambitious while realistic.
Suppliers step up: They continued: “We expect suppliers to rise to the challenge so they meet their obligations and go further where they can, and Ofgem have stated they will take a robust approach towards companies failing to meet targets.”
**A message from SSE: Want to revitalise UK industrial heartlands by pioneering clean, flexible energy technologies and green industries? SSE has answers and has published a plan to help the Government prioritise how to build new flexible capacity. Emerging technologies such as Carbon Capture and Storage and Hydrogen will play an important role in our energy system and industrial decarbonisation, but we need to move faster and further to keep the UK industry competitive in a net zero world and to boost energy security. It’s vital we increase targets for CCS power generation, making the UK a world leader in CCS technology and for hydrogen capable power stations to pioneer clean, flexible power generation. Actions, not ambitions are what’s needed now to secure our energy future. SSE. We Power Change. Find out more.**
