The UK’s political debate should focus on policies that will unlock private sector investment and not just on levels of public spending, said an executive with SSE, one of the country’s leading renewable energy producers.
Britain’s opposition Labor Party – which holds a commanding lead in opinion polls ahead of an election likely to be called before the end of this year – came under fire from climate campaigners this week after abandoning a key pledge to increase annual green spending to £28 billion ($35 billion) due to concerns about future borrowing costs.
The change drew criticism from climate activists and some quarters of the energy sector, but not all.
“I understand this is a very political issue, but I think there is a consensus at the top on energy security and decarbonisation. From our perspective it’s not necessarily the amount of public spending commitments that gets things built in this country.” said Sam Peacock, managing director of government affairs, regulation and strategy at SSE, speaking to the BBC.
“What things build on is faster planning, faster decision-making and investable policies. I think the real difference a government can make is to catalyze the private sector, focus on that part of it and make the UK the most easiest in the world to invest in,” he added.
Labor leader Sir Keir Starmer said the decision to drop the commitment was a “common sense” reaction to changed economic circumstances.
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Starmer said Labor would keep two elements of its green plan: a new state-owned energy company with £8.3bn of seed funding and a £7.3bn sovereign wealth fund, but would also reduce the amount of funding promised for a national house. isolation scheme.
Labor has also kept a pledge to fund renewable energy jobs in Britain’s rust belt regions, with £1.5 billion committed over three years.
The initial plan, which would cost £140 billion over five years, would be half-funded by promised windfall taxes on North Sea oil and gas.
The retreat drew criticism, with Energy UK, a trade association, expressing concern about the signal a return to such announcements sends to an industry that is being asked to invest in transition.
Peacock, whose company has pledged to invest £40bn in the decade to 2032, agreed that policy signals could be valuable.
“But for us it’s about how you catalyze that private sector investment. We have £40 billion to invest over the decade and so do many other companies. The appetite for investment is there, it’s about the pace of execution for future governments.
“We would like to see activity around this really. How do you make the planning system faster? How do you get the network there when you need it? How can you procure more projects through policy mechanisms? This is going be critical to investment in this country.”
Peacock argued that future governments should make it “much faster” than the current ten years or so to deliver power lines and offshore wind farm projects.
With insufficient resources
One of the steps to address, Peacock said, was the fact that many of the authorities involved in the planning and permitting stages for such projects are “very under-resourced”.
SSE is currently building Dogger Bank, billed as the world’s largest wind farm, in the North Sea and has started the process for a potentially larger one, Berwick Bank.
“There is not enough pace at the moment to procure these types of projects through policy mechanisms. Just the ambition for this would make a big difference in the energy system… This is not about public spending, but about… planning and networking,” said Peacock.
He added that all major parties already show a strong commitment to infrastructure needs such as grid networks, cleaner and more flexible power plants and offshore wind.
“What we want to see in the election manifestos is a continued commitment to do more of those big ticket items at pace…So it’s really about building the infrastructure rather than the exact amount of commitments public sector,” he said.