Winds of change
The battle for Number Ten is down to two candidates and the cost of living and energy crisis has become the key issue. On the hottest day ever recorded in the UK, we also saw a new record set for the highest price Britain has ever paid for electricity to keep the lights on.
It’s not only a hot topic for the leadership race. There are further regulations coming into force. The European Sustainability Reporting Standards (ESRS) will be phased in between 2024-2028, making ESG reporting mandatory for more than 50,000 companies. Reducing our emissions, increasing use of renewable energy over fossil fuels and considering the impact of the cost-of-living crisis on our employees should be everyone’s priority.
Dramatic increases in global gas wholesale prices over the past year, now exacerbated by the war in Ukraine and supply chain issues between Russia and Europe, has led to household energy bills rocketing. A further increase to the energy price cap is widely expected to come into effect less than a month into the new leader’s premiership.
So far, the focus has been to help households with funding the price hikes, but just as wage increases have driven further inflation, this could fuel further hikes. Rishi Sunak promised to cut VAT on all domestic energy bills under his ‘winter plan’ if he becomes the next Prime Minister, after previously ruling out short-term tax cuts as the wrong thing to do. Liz Truss set out her stall on supporting households with energy costs earlier in her campaign, with a pledge to temporarily suspend the Government’s green levy on energy bills to help with the cost-of-living crisis.
However, the green levy currently supports schemes that improve energy efficiency in housing, supports vulnerable households, and take-up of renewable technologies. Cutting the levies will make bills higher in the long term.
But there is good news. The UK is a world leader in offshore wind power. Renewable energy now accounts for 45 per cent of the UK’s electricity generation, with wind driving this trend following the UK’s investment in offshore wind sites in particular.
Growth of the wind energy sector has been a big success story for the UK over the past decade, and further investment in wind power infrastructure will help fulfil the promise of more ‘green jobs’, as well as helping meet net zero targets. While both candidates have confirmed their commitment to maintaining the UK’s net zero target, Truss’s current energy policy looks to create energy self-sufficiency through North Sea gas exploration and potential fracking, if supported by local communities, rather than focusing on delivering clean-energy production. Sunak has vowed to further boost offshore wind production to make the UK ‘energy independent’ by 2045, but supports a ban on onshore wind farms, which have lower investment costs and require the creation of less infrastructure.
The UK’s new leader will need to balance helping consumers with the cost-of-living crisis and rising energy bills, while keeping a sharp eye on continued investment in sustainable energy production to safeguard households’ energy expenditure in the long-term. We cannot afford to slow down our investment in wind.