How the ground is shifting now that Labour finds itself in government and is actually responsible for UK energy policy. This morning, workers at a glass factory on Merseyside were treated to an unusual visit from the threesome that is the Prime Minister, Chancellor and Energy Secretary.
Keir Starmer, Rachel Reeves and Ed Miliband had travelled up to announce the latest twist in the government’s energy policy: a £22 billion investment in carbon capture and storage (CCS). This, apparently, is an inspired policy to create jobs, help us accelerate to net zero and boost our economy. It is also extraordinarily similar to an announcement that the previous government made in March 2023, when Rishi Sunak pledged £20 billion towards CCS projects.
Miliband would rather we imported the gas
On that occasion, however, Miliband was far from enthusiastic. ‘Of course we need to replace retiring gas-fired stations as part of a decarbonised power system, which will include carbon capture and hydrogen playing a limited back up role in the system,’ he said. But what we really needed to guarantee our energy security was to lift the ban on onshore wind which was dooming us to ‘at least another 10 years of high energy bills’.
In July 2023 the then prime minister Rishi Sunak reiterated his policy of including gas plants with CCS in Britain’s future energy mix, with the gas provided from the North Sea via new licences. Miliband responded by saying Sunak’s ‘weak and confused policy will not take a penny off bills, will do nothing for our energy security and drive a coach and horses through our climate commitments, while continuing to leave us at the mercy of fossil fuel dictators like Putin’.
Yet fast forward 18 months and Labour’s announcement on CCS is suddenly the beginning of a ‘new era’, according to Miliband. It will guarantee ‘a new generation of good jobs in our industrial heartlands’ and a ‘new route to economic prosperity and energy security’.
Miliband’s dream of a clean national grid made up nearly entirely of renewables seems to be in the process of being discarded. At the weekend Fintan Slye, head of the new Energy System Operator, just demerged from National Grid, revealed that Miliband’s promise of 100 per cent clean energy by 2030 doesn’t quite mean what it says – it means 95 per cent clean energy, with the remaining five per cent made up of unabated gas (i.e. not fitted with CCS). And even that, he added, is ‘at the limit of what is achievable’. Obviously the head of Miliband’s new nationalised grid company is not going to diss the Energy Secretary’s policy, but he came as close to doing it as he could. Don’t be surprised if that 95 per cent figure starts to slip further in the coming months and years.
It appears that Miliband has been persuaded that actually Britain will need new gas plants to ensure that we can keep the lights on in future – just as Sunak argued. The difference between Miliband’s and Sunak’s positions is that Miliband doesn’t seem to want the gas for those plants to come from the North Sea, for which he refused to issue new licences. He would rather we imported the gas. How that fits in with Miliband’s promise to free us from ‘fossil fuel dictators like Putin’ I can’t quite see. Indeed, I would say that Miliband is the one whose energy policy appears to be becoming confused.
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