Labour is moving fast but is it moving correctly? I spoke to Jonathan Brearley, CEO of Ofgem and Anthony Ainsworth, Chief Operating Officer of npower Business Solutions for their reactions to the policies announced and the way business will have to respond.
Jonathan kicked off the chat saying very little was unexpected: “I can’t say I’m surprised. The party’s been signalling major shifts for some time. Great British Energy? Not a surprise. The 2030 target? (to decarbonise the grid). Not a surprise.
“But what I would say is Ed Miliband has generated what I think is an incredibly positive atmosphere around his agenda.
“There is definitely amongst all of this actually a mindset of, you know, if we are going to achieve something like 2030, for example, we’re just going to need to surface problems and work through them much more quickly.
“And all of us are coming into the room with the mindset that actually, whatever it takes, we will do.”
He highlights the appointment of Chris Stark from the Committee on Climate Change as a pivotal move: “They’ve called it ‘Mission Control’ which gives us a central focus to drive things forward at pace.”
And adds that across the sector, from network operators to generators, there’s a cautious optimism: “There’s excitement building and that’s what we need to tap into.”
He also said lessons from the energy price crisis sparked by Russia’s war against Ukraine had been learned and were now influencing government action.
Net zero in focus
“The Russian invasion of Ukraine exposed the fragility of the global energy market. Europe had to spend €1 trillion managing the gas crisis and that only kept bills at double their pre-crisis levels. We can’t afford to go through that again.
“So, what it says to me is that the economic case now for this net zero transition is much, much stronger. So I think there is a focus on a goal.”
From a business point of view Antony Ainsworth was also positive about Labour’s plans but said red tape challenges would have to be overcome, for rapid progress.
He said: “Well, I certainly give them an A for effort for the first hundred days in terms of everything that they have done and the speed that they’ve done it. I agree with Jonathan to say there’s probably no surprises individually there. But as a collective effort, I think it’s pretty huge and a really big push to do all those things.
“I think the challenge is going to be to coordinate those policies and the things that sit outside of the energy sector, such as the planning regulations will need to change.”
Businesses want clarity
Mr Ainsworth’s connection to UK businesses gives him a sharp sense of what matters most: “The businesses we support account for around 16% of the UK’s GDP. Their priorities are clear. CFOs want lower energy costs. CEOs need a reliable supply chain that can withstand shocks. And everyone’s under pressure to decarbonise as fast as possible.”
He continues: “Our surveys show that businesses are fully behind the government’s goals. But they need a consistent and clear policy framework to make confident investments.”
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