2024 is set to be a pivotal year for UK climate and energy policy. In the near term, the government must enact measures to drive investment in the UK’s low-carbon sectors to get on track for net zero and increase global competitiveness. In the longer term, the coming general election will set the narrative and determine the scale of ambition we can expect to see on climate action in the future.

The UK’s future economic prosperity and energy security depends on a strong low-carbon economy, so high ambition is vital. Private investment in net zero could catalyse a 6.4% growth in UK GDP by 2050, equivalent to £240bn, and accelerating the energy transition will bolster the UK’s energy security, reduce consumer energy bills and mitigate regional inequality through job creation.

The US Inflation Reduction Act and the European Union’s Green Deal Industrial Plan have changed the global landscape and are already diverting investment out of the UK. Similar upward trends are present in China, where solar capacity has doubled and wind power capacity increased by 66% in 2023.

Before the election itself, the current parliamentary term will be critical to delivering the right frameworks that put the UK in a strong position to deliver its climate pledges in a way that benefits the economy. Although some public investment will be required to accelerate the transition at the pace required, there are many policy levers that can be utilised to allow private investment to power the transition.

Taking a holistic approach to policy through a clear industrial strategy, implementing smart regulation across the economy and ensuring cross-Whitehall collaboration will be vital to enabling decarbonisation. This should be achieved alongside efforts to streamline the planning system and open up new areas for investment such as onshore wind.

During the election, businesses and investors need to see cross-party consensus in favour of rapid decarbonisation. The narrative as voters go to the polls must be a race to the top between the major political parties, with leaders presenting high ambition targets and credible delivery plans that give confidence to the private sector.

Ultimately, securing the finance to drive forward the energy transition and the decarbonisation of the whole economy relies on a stable and supportive policy environment, backed by the right signals for investors.

A foundation of clean power
To enable the decarbonisation of the wider economy, swift action must be taken in the power sector. A net zero power grid will not only lower bills and boost energy security, but also provide knock-on benefits across the economy, from industry to electric vehicles. There remain achievable policy options available to the current government to achieve this goal.

One low-cost way to deliver this would be by removing the significant barriers currently preventing the development of onshore wind projects in the UK. Doubling UK onshore wind capacity to 30 GW by 2030 would reduce consumer bills by £16.3bn over this decade, generate £45bn of economic activity and create 27,000 full-time jobs, but just one objection to a wind farm can currently prevent an entire project.

The government should amend the planning system to speed up consents, set a target for capacity, and provide a detailed roadmap for how and when the technology will be rolled out, as part of a strategic spatial energy plan.

To create a level playing field, government can look to reduce the electricity generator levy (EGL) for renewable energy projects to a point that is at least consistent with treatment of oil and gas extraction. There is also an opportunity to drive collaboration and create efficiencies by improving the UK’s participation in global power markets. For instance, we could restore participation in day-ahead electricity markets with neighbouring countries, the absence of which is estimated to have resulted in £45mn in lost trade in 2021. We could also expand interconnection capacity with neighbouring countries.

Doubling UK onshore wind capacity to 30 GW by 2030 would reduce consumer bills by £16.3bn over this decade, generate £45bn of economic activity and create 27,000 full-time jobs, but just one objection to a wind farm can currently prevent an entire project.

Although the UK has made strong progress on decarbonising energy supply and delivering net zero across the economy compared to many international peers, there remains much work to do. The current government, and those that follow, must make clear that the UK is a dependable partner for those looking to advance ambitious new low-carbon projects. This requires a staunch commitment to a prosperous low-carbon future through a combination of targets, policy delivery and communication.

Businesses recognise the immense economic opportunity that net zero presents for the UK, and are rapidly decarbonising their own operations and supply chains. They are ready to play their part in delivering a prosperous low-carbon future, so government should look to engage them and prioritise policy that can accelerate progress immediately.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.