UK election 24
Will Labour's Green Prosperity Plan make Britain a 'clean energy superpower'?

Labour has promised "a cheaper zero-carbon electricity system by 2030", five years ahead of the current government's 2035 target. Achieving this accelerated goal will be highly challenging, particularly given the lengthy development and construction timelines for low carbon installations such as offshore wind farms, which can take a decade or more.
Rapid action is needed to advance more low carbon power to meet the 2030 target. Any new government must also quickly reassure investors to maintain the current pace of clean energy investment and prevent uncertainty slowing progress.

Rewiring Britain

Key to moving projects forward more quickly are Labour's first-year plans to "rewire Britain", including through reform to the planning system, acceleration of grid connections and changing the energy market, to remove barriers to private investment. 
Some proposals, like updating National Planning Policy Statements and Nationally Significant Infrastructure Projects to encourage onshore wind again in England should be straightforward. However, significantly speeding up the planning process will be more complex (as noted in our call for a pragmatic reset on planning reform here). 

Labour acknowledges that upgrading the national grid is crucial and promises to accelerate grid connections. Currently, aligning connection dates with project timelines is a major obstacle for new energy generation projects. Investors will welcome the commitment to "the largest upgrade to our national transmission infrastructure in a generation". Labour also intends to plan the energy system more strategically and dismantle the grid queue. It remains to be seen whether such plans, in practice, go beyond actions already being taken by Ofgem and the Electricity System Operator (see our posts on re-ordering the queue and queue management milestones).

Labour will look at de-linking the price of renewables from gas to pass on low renewables prices to consumers. This is something that DESNZ's Review of the Electricity Market Arrangements (REMA) consultation has looked at since 2022. Generally, the progress of REMA reform options seems unlikely to be altered by a change in government as the questions are technocratic. Labour's focus on local energy may, however, mean a move to locational pricing is more likely. That would be a radical shift for industry – with the technocratic argument against it being that delays caused by implementation threaten investor certainty and meeting the deadline. For this reason, Labour may pull back from this and seek as little delay as possible to finalising REMA. Until there is clarity, there is a risk that investors will look elsewhere to jurisdictions with more certainty.

Incentivising renewables

Labour's first-year policies include approving the next round of renewable projects in Contracts for Difference (CfD) auctions. With the sixth Allocation Round (AR6) ongoing and results expected this summer, the launch of AR7 early next year will be the first opportunity for the new government to demonstrate it can put in place the necessary ingredients for a successful auction for private renewables investment. The failed AR5, in which no offshore wind projects bid, demonstrates the importance of getting the auction parameters right. Likewise, Labour will need to act quickly to provide certainty on the design of future rounds. A number of consultations affecting CfD design, including REMA, were expected to be progressed over the summer.

The proposed National Wealth Fund and British Jobs Bonus may help to free some supply chain bottlenecks faced by low carbon developers. Labour policies include an annual fund of up to £500 million, starting from AR7, to provide capital grants to incentivise clean technology developers to build the UK supply chain. Clarity is needed on whether this complements or replaces the current government's Green Industries Growth Accelerator and proposed Sustainable Industry Reward to assess the impact. 

Oil & gas

Labour has committed to honouring existing North Sea oil & gas licences but will not issue licences for new fields. The Offshore Petroleum Licensing Bill, which would have introduced annual licensing rounds will be scrapped under a Labour administration. Investors in existing fields will be affected by Labour's "proper windfall tax" with details awaited (see our Labour's tax plans article).