What can we do about the end of consensus on cheap renewable power?
By Jade Pallister, Director, Energy and Infrastructure
The consensus on cheap renewable power has cracked - to fight back we must re-focus on stability, fairness and cost, and not lose sight of clean power.
The cost-of-living crisis has become a battleground for energy policy, consolidating in three key attacks:
Bills are high because we are spending too much on renewable energy subsidies.
Net Zero and green levies result in higher in energy bills - not reductions.
Gas is taxed unfairly making it more expensive.
Political parties on the right are reframing net zero as a story of unfairness and waste - one that pits ordinary people against companies and government.
Reform UK say they would impose a "generation tax" and a "special corporation tax" to cover the costs of government funding for renewable energy. Conservatives, meanwhile, would axe the carbon tax on electricity generation and end RO subsidies.
Ironically, what is missed in the debate is the fact that Treasury spent £69bn on reducing energy bills between 2022-2024. That equates to roughly double the annual defence budget in 2023-24 (£35bn), just to deal with gas volatility as Russia invaded Ukraine.
It goes back to something fundamental: voters don’t blame net zero for energy prices. They blame an unfair system.
More in Common polling shows that half (51%) of voters blame profiteering by energy companies for rising energy bills - 36% blame the war in Ukraine – and less than 15% blamed net zero or subsidies for renewables.
Energy organisations should see this as both an opportunity and a reputational risk.
Voters understand the need to invest in infrastructure – but they want investment that is fair, transparent, and worthwhile.
In response, the industry go further on arguments around stability and fairness and engage with – and not dismiss - Conservatives and Reform.
Indeed, while much has been made of the politics of scrapping the Climate Change Act and Net Zero – what all political parties are ultimately focused on is cost.
If we get the messaging on fairness right, clean power can win. But, to do that we need to:
Admit that the system is not working as effectively as it could be. The energy transition is exactly that - a transition - but we are still trying to run it through a patchwork system built for another era. Policies and market mechanisms overlap and contradict each other, slowing investment, and resulting in clumsy – sometimes wasteful – decisions. We need to simplify, modernise, and value new technology like never before. Companies helping the government to understand and implement this will benefit.
Focus on regulators and decision makers. Ofgem and NESO are huge beasts. The way they are structured and how they make decisions still favours older systems and technologies. To enable the transition, we need organisational focus as much as policy change. Industry is well placed to do this.
Work Treasury hard on fairness and levies. The UK is missing a transparent framework that balances fiscal discipline with fairness to consumers on energy bills. Instead of an endless tug-of-war between DESNZ and HMT, we need a shared view of the system’s finances - where costs sit, how revenues circulate, and what outcomes they deliver. Treasury should be laser-focused on making sure the system feels fair, stable, and accountable to the people funding it.
Put stability and fairness first. Gas is volatile so every investment, every reform, must be framed around stability and fairness. That’s where industry can help: by making the case that predictable, fairly distributed investment in new technologies now reduces volatility and risk later.
Be frank about the benefits and limits of renewables. Solar and battery farms don’t employ the same high-skilled workers that many older infrastructure projects did. Many of Reform and Conservative target seats are also in areas hosting, or about to host, significant infrastructure – solar farms, BESS, pylons. More companies should be thinking about how they can communicate their value – fairness and cost is the way to do this.
We have four years to win the argument on the future of energy. Companies that don’t show how they’re reducing costs and delivering will find others writing the story for them.
The winners will be those who adjust to the new political climate. Just as we’re rebuilding the physical grid, it’s time to rebuild the political one too.