With a decisive victory on 4 July, securing 412 seats, the Labour Party has set the stage for a transformative shift in the UK’s energy policy. The new government’s approach represents a significant departure from the previous Conservative administration, with a focus on clean energy, energy independence, and accelerated action toward net-zero emissions.
Building a Clean Energy Superpower
At the heart of Labour’s energy strategy is an ambitious pledge to make Britain a clean energy superpower by 2030. Central to this vision is a commitment to decarbonise the electricity sector entirely within the next seven years. The Labour government plans to expedite decisions on nuclear power, extending the life of existing plants and pushing key projects, like Hinkley Point C, toward completion. Additionally, Labour is committed to maintaining a strategic reserve of gas power stations to ensure the stability and security of the energy supply during this transition.
“A national mission for clean power by 2030 is achievable and should be prioritised. We desperately need to end the era of high energy bills, excessive carbon emissions and energy insecurity by accelerating the transition to clean, homegrown energy. Britain can lead on this by treating this mission like the vaccine challenge. We can be the innovators and the implementers, helping ourselves and exporting our solutions worldwide. But if we choose to go slowly, others will provide the answers, and ultimately we’ll end up buying these solutions rather than selling them.” – Sir Patrick Vallance, Former Chief Scientific Adviser
Energy Independence Act: A New Legislative Framework
To support these ambitious goals, Labour intends to introduce the Energy Independence Act, a legislative framework designed to drive the UK’s energy and climate policies. This act will set the foundation for decarbonising the electricity sector by 2030, aligning with Labour’s broader Green Prosperity Plan.
The Green Prosperity Plan will fund the clean energy transition, with an average investment of £4.7 billion per year. Approximately one-quarter of this funding will be sourced from a time-limited windfall tax on oil and gas companies, while the remainder will come from government borrowing. This financial strategy underscores Labour’s commitment to funding the energy transition without placing undue strain on public finances.
Great British Energy: Public Investment for a Green Future
One of Labour’s flagship initiatives is the establishment of Great British Energy (GBE), a publicly funded entity that will co-invest in clean energy technologies alongside private companies. With a planned capital injection of £8.3 billion over the next parliament, GBE is expected to play a pivotal role in expanding renewable energy capacity. Experts predict that GBE’s investments will help double onshore wind capacity, triple solar power, and quadruple offshore wind capacity by 2030, directly supporting the UK’s decarbonisation targets.
GBE will also play a key role in Labour’s Local Power Plan and Warm Homes Plan. The Local Power Plan aims to deploy distributed energy generation projects, such as onshore wind, solar, and hydropower, in partnership with local authorities, energy companies, and community cooperatives. Meanwhile, the Warm Homes Plan will see an additional £6.6 billion invested over the next parliament to upgrade the energy efficiency of five million homes, offering grants and low-interest loans to support investments in insulation, solar panels, and low-carbon heating technologies.
National Wealth Fund: Investment in the Future
Labour’s Government National Wealth Fund, a £7.3 billion Net Zero initiative, is an investment in the industries of the future, including green steel, hydrogen production, battery technology, and port infrastructure. The fund aims to attract significant private sector investment, targeting a 3:1 ratio of private to public funding. This initiative will be critical in supporting the UK’s transition to Net Zero, with direct investments in key industrial sectors that are essential for the country’s long-term energy security and economic resilience.
Reforming the Energy Market for Consumers
In addition to driving the clean energy transition, Labour is committed to reforming the UK’s energy market to prioritise consumer interests. The government plans to work closely with Ofgem to strengthen regulatory oversight, reduce standing charges, and ensure that consumers are compensated for failures in service. Labour’s approach to energy market regulation is designed to attract the investment needed to reduce bills while ensuring that companies are held accountable for their actions.
Accelerating Renewable Energy Deployment
Labour’s commitment to renewable energy is already evident in its early actions. Within days of taking office, the government announced the removal of the “de facto ban” on onshore wind development in England, making it easier for new projects to gain approval. In addition, Labour has granted Development Consent Orders (DCOs) for three large solar farms, signaling a clear intent to accelerate the deployment of renewable energy projects across the country.
Navigating Inherited Policies and Challenges
Labour has also inherited several ongoing policy initiatives from the previous Conservative government, including the Review of Electricity Market Arrangements (REMA). This complex program aims to ensure that the UK’s electricity market is fit for a net-zero future, addressing market failures and optimising system design for a renewable-dominated energy mix. While Labour’s
specific approach to REMA is still unfolding, the government is likely to prioritise reforms that align with its 2030 decarbonisation goals, ensuring that the market supports the rapid deployment of renewable energy and the transition away from fossil fuels.
What Lies Ahead?
Labour's government have demonstrated a clear determination to remove barriers to the energy transition, Net Zero, particularly in planning, infrastructure and investment. However, with ambitious targets set for both 2030 and 2050, the road ahead is challenging. Decisive action will be needed in the coming months to maintain momentum and ensure the UK remains on track to achieve its net-zero ambitions.
As the Labour government continues to refine and implement its energy policies, the next few years will be crucial in laying the groundwork for a resilient and sustainable energy future. The focus will not only be on meeting immediate targets but also on ensuring that the UK’s energy infrastructure is prepared to support long-term economic growth and environmental stewardship.