Solar Energy UK
19 June 2023
Labour has set out an ambitious plan to boost public and private investment in clean energy, with intentions to reform the Contracts for Difference (CfD) mechanism particularly welcomed by the solar industry.
“Make no mistake: we are living in an increasingly volatile world. The twin risks of climate change and energy security now threaten the stability of nations. So we’ve got to ground everything we do in a new insight: that clean energy is essential for national security,” said leader Keir Starmer.
The war in Ukraine illustrates this “with total clarity”, he added.
But the party’s “national mission on clean energy” is about more than avoiding danger. It is, “a bridge to a better future”, Starmer said, though not one that will come easily. Noting the threat of crippling delays to grid connections, he warned that, “We’ve got to roll up our sleeves and get building things.”
That means planning reform, public procurement, offering long-term finance, supporting R&D, and developing a strategic plan for skills and the supply chain, the party leader explained.
“Labour has wisely staked its economic case on clean and renewable energy, of which solar energy is an increasingly critical part. Pushing to treble capacity by the end of the next parliament would set an even faster pace than that implied by the Conservatives’ Energy Security Strategy, which seeks to reach 70 gigawatts by 2035,” said Solar Energy UK Chief Executive Chris Hewett.
“But it is the £500m British Jobs Bonus that particularly caught my eye, as a direct response to the US’ Inflation Reduction Act and the EU’s Green Deal Industrial Plan. Incentivising new CfD applicants to develop a home-grown supply chain would not only attract new investment, bringing good-quality and well-paid jobs, it could also bring down costs and, in time, provide opportunities for export,” he added.
Larger renewables projects seeking CfDs are already required to have a supply chain plan in place, a threshold that the Government is considering removing.
Further aspects of Labour’s plan are the creation of a sovereign wealth fund, “to harness the bounty of clean energy” and crowd-in private investment for critical projects, such as battery gigafactories. “This is the game changer: there are billions upon billions to be unlocked… but we’ve got to move fast,” Starmer said. Alongside the fund, Labour would establish a new state-owned energy company, along the lines of Sweden’s Vattenfall, France’s EDF or Denmark’s Ørsted – all of which have solar or battery energy storage assets in the UK.
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