How Labour can shift the narrative from short to long-term solutions on the energy crisis
With a tough winter ahead, Labour has the chance to articulate how we can achieve a just transition to net zero.
This weekend, the Labour Party will meet in Liverpool set against a backdrop of rising energy bills, as consumers worry over how they will meet soaring costs.
Inflation is driving down income, household budgets are stretched, and some of the most vulnerable people in the UK are set to disproportionately struggle. Three-quarters of UK households are predicted to fall into fuel poverty by the new year.
In the short-term, the energy price guarantee is a necessary intervention to help consumers – something Labour were quick to call for themselves.
The cause of the problem we face is multifaceted and while some may think now is the time to re-think our net zero commitments, we need to be doubling down on them. Net zero and energy security go hand in hand with one another and green technologies can play a leading role in reducing our dependence on global energy markets to bring down bills.
Firstly, the Government should use the ongoing Review of Electricity Market Arrangements to break the link between gas and electricity prices. This is a chance to drive down the long-term electricity price, support the full development of renewables such as solar and wind, and ensure the cost reductions are passed onto customers.
Elsewhere, more should be done to inject biomethane – a net zero solution made from waste such as food, manure sewage and crops – into our existing gas infrastructure. At SGN, we already inject biomethane into our network to heat 250,000 homes across Southern England and Scotland and have ambitions to reach 400,000 homes by 2026.
But longer-term answers must be found. A continued costly reliance on overseas fossil fuels will do nothing to bring bills down to help consumers. Or to help the UK’s energy security and binding climate commitments, which enter a critical phase following COP26.
Labour already has strong ambitions to up renewable energy production and boost the UK’s energy security. Matching this ambition with reality will be contingent on consumers participating in the transition. People, places, and households must be brought into our net zero journey if we are to succeed.
The good news is customer research tells us the public support net zero. We also know, however, that this support wavers when the cost of the transition becomes a factor – an increasingly salient factor.
Conference therefore presents Labour with a chance to do two things.
To double down on the green, home-grown, technologies that can make net zero a reality and reduce the UK’s dependence on global energy markets. The very same markets that are currently pushing consumers into fuel poverty.
And to make the link between a radical shift to net zero and cutting long-term costs for consumers unbreakable.
No single technology will get us to net zero by itself.
One area that perfectly encapsulates both opportunities is the changes we all need to make to our home heating systems over the coming years. The decarbonisation of home heating is the biggest challenge we face in achieving net zero. It’s the second biggest emitting sector with around 30 per cent of our national emissions coming from buildings, which includes around 25 million homes connected to gas networks across the UK. Millions of homes and people will be heavily impacted by this change.
Labour has already committed to upping low carbon heat sources to 50% by 2030. But no single technology will get us to net zero by itself. We will only achieve this by utilising every tool in the box and most importantly, matching the solution to the needs and expectations of homeowners.
One of the areas we’re exploring in this space is how existing infrastructure can be repurposed to supply hydrogen to homes. Hydrogen can deliver clean and reliable energy to consumers’ homes. This can also be generated through the UK’s enormous wind resources. If we take Scotland for example, thanks to an abundance of rich renewable energy resources, the promise of green hydrogen could soon be turned into reality. With all of this renewable potential in Scotland, there is a fantastic opportunity to generate green hydrogen, which can be used to decarbonise a number of sectors.
To maximise this potential, the UK-wide supply chain is on hand to support the decarbonisation effort, with industry trade association Hydrogen UK projecting 75,000 new, skilled and secure jobs by 2035. This can boost our economy and help keep the transition just and fair.
If we want to protect consumers, grow the economy and decarbonise some of the toughest sectors, every available technology will be needed. We can make real progress towards net zero in the 2020s by doubling down on our short and long-term policy options. As part of this journey, the UK has a great opportunity to create a flourishing hydrogen economy, which can support the decarbonisation of a number of sectors.
Members of the SGN team will be at Labour Conference this week. For those also attending, look out for us in the Hydrogen Zone, where we look forward to meeting you to discuss our shared ambition of supporting customers through the energy transition.
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