The energy landscape in the UK is undergoing significant changes as new government policies take shape.
In this 100 Days of Labour podcast, LCP Delta analysts Sam Hollister and Matthew Dietz explored the implications of these policies after the administration’s first 100 days, focusing on their effects on energy costs and financial stability.
Sam Hollister, the Head of Energy Economics, Policy and Investment, expressed optimism about the government’s initiatives, stating, “The standout thing for me has been a real kind of energy and momentum being brought to energy policy and decarbonisation.”
He highlighted significant developments, including an increase in the Contracts for Difference (CfD) budget and advancements in renewable energy projects like onshore wind and solar.
Matthew Deitz, a Senior Consultant at LCP Delta, underscored the critical relationship between energy prices and investor sentiment.
Mr Deitz pointed out that reliance on international gas markets has made energy costs volatile, while Mr Hollister acknowledged the challenges posed by ongoing geopolitical tensions.
As winter approaches, they discussed the importance of gas storage levels, noting, “We inherited such a high gas storage level coming out of the previous winter,” which could provide some assurance for energy supply.
The analysts emphasised the need to decouple energy bills from gas prices. Matthew Deitz noted, “In the short term, there’s not much that the government can do… fundamentally they are still set by gas prices.”
Matthew Deitz emphasised that the government’s policies need to instill confidence in the market to attract investment, remarking that “the appointment of Chris Stark into that mission control position… was a masterstroke.”
This move aims to consolidate energy policy-making and address various constraints related to planning and environmental permits.
