Net Zero Archives - WA Communications

Transitioning to Net Zero: A Guide to the Energy Sector in 2025

Achieving Net Zero will require a fundamental change to our energy system, at extraordinary pace – from significant investment in low carbon generation, combined with major reforms to our infrastructure, to shifts in how the energy markets work, and changing consumer behaviour. The expectations on the energy sector in delivering this are huge.

The government’s ambition to achieve Clean Power in the UK by 2030 adds to this pressure. With just five years to achieve this, the race is on.

This comes in the context of a Labour government, having been in power for just over six months, but needing to show how it is delivering. The energy sector is critical to the government’s core ambition of delivering economic growth, and for people and communities across the country to the feel the benefits of this. If they don’t – and they see it as a drain of public resource rather than a driver of growth to fund core public services – sustained support for net zero and the energy transition is likely to be at risk.

This year is critical if these ambitions are to become a reality: government needs to accelerate policy decisions, industry needs to demonstrate the steps that it is taking to deliver on the ground, and collectively both need to articulate to the wider public how this is delivering a cleaner, more affordable and more secure energy system that works for them.

This new guide from WA Communications is our take on the year ahead for the energy sector, looking at what’s in store in the external environment – both from a policy and reputational perspective – and what it means for business. It includes:

The key trends to look out for this year
What to expect in different parts of the energy market
A practical timeline that sets out the key policy and political milestones for the next six months

Transitioning to Net Zero: A Guide to the Energy Sector in 2025

We hope you find this guide a useful framework to understand how to navigate the external environment impacting the energy sector and align your organisation’s strategic communications with these priorities.

To explore our analysis in more detail, and arrange a presentation and discussion to understand how these points apply specifically to your organisation, sector and situation, please get in touch with Angus Hill at angushill@wacomms.co.uk.

Share this content:

Powering on: what have we learnt about energy from this year’s party conferences?

With energy and climate being one of the policy areas where the new Government have built most momentum, the sector is getting to grips with what’s likely to come next and how this will be sustained over the course of the Parliament. Net zero was a significant focus at both the Labour and Conservative Party conferences, although with vast differences in how it was approached.

What has the last fortnight taught us over how both parties are approaching energy and decarbonisation, and what emerging trends became clear at fringes, in the keynote speeches and in side discussions between industry? Here are our reflections on what we learnt.

There’s a tension emerging between delivery against generation targets and using this investment to drive wider social change

The energy sector has a critical role to play in at least two of the Government’s Missions: Clean Power by 2030 and Economic Growth (and arguably also the Opportunity Mission considering the critical importance of skills). The fastest, lowest cost and most efficient delivery of projects is essential to ensure success against these agendas. However, it’s also not a secret that Labour governments are keen to deliver social change. The phrase “inclusive growth” was used repeatedly by Cabinet Ministers in Liverpool.

But can you deliver projects as quickly as possible while also maximising their social impact? While Ministers are clear that they are prioritising project delivery, important voices within the wider Labour movement are calling for policy changes that will ensure the UK’s energy system is more actively used as a vehicle for delivering social reforms.

Nature groups are campaigning for an amendment to the Great British Energy Bill which would give the new body an “environmental duty”, with a requirement to consider the impact on biodiversity. Trade union representatives used contributions at fringe events in Liverpool to advocate for public subsidy and financial support – through the Contracts for Difference (CfD) mechanism, the British Jobs Bonus and the National Wealth Fund – to be conditional on developer commitments around UK content and supply chain support, and trade union recognition for their workforces.

While these proposals are not government policy, they demonstrate the different pressures that Ministers are facing and that business need to be attuned to.

Technologies that will have a role to play after 2030 need to be making the case now for attention

The 2030 Clean Power Plan that Energy Secretary Ed Miliband and the head of Clean Power Mission Control Chris Stark have tasked the newly established National Energy System Operator (NESO) with creating this Autumn will create a clear pathway for projects and technologies that will be essential to meeting this target. There’s likely to be a much smoother delivery pathway for these projects – with the prospect of preferential access to grid connections for example.

However, there’s a clear risk for those technologies that aren’t identified as fitting into this category, but that are likely to have a medium to long-term role including to meet 2050 targets. Nuclear and likely some carbon capture and hydrogen projects are most impacted.

It’s not to say there is no political support for these projects or technologies, however a tunnel-vision focus on 2030 creates a risk of more limited political attention for these solutions and the policy steps required to help them progress being deprioritised.

Industry have a narrow window to make a very clear case to government and NESO now on the 2030 contribution that these projects and technologies can make, and to articulate the risks for future viability – which will still be needed to hit future targets – if progress slows and key decision points are deferred.

Market reform is reappearing on the policy agenda

Reforming how the electricity market works is divisive within industry. The review of electricity market arrangements (REMA) process has occupied significant political, policy, regulatory and industry time and attention to date, with little tangible progress.

However, in the fringe discussions in Liverpool and Birmingham, the debate was reopened. Advocates for a more locational approach to electricity market pricing argue that it will reduce bills. The case against is essentially that the benefits are overstated, and it will create significant market disruption.

There won’t be quick solutions to this one but expect the discussion to intensify over the next six months or so.

Heat decarbonisation is the next big issue on the policy agenda

It’s not a surprise that the Government has sought to deliver as many ‘quick wins’ as possible in the first 100 days, with a particular policy focus on renewables. Limited bandwidth means political attention has been directed towards this part of the energy market.

But with many tough challenges to address across the energy market, this focus will need to widen throughout the Autumn and beyond. It was clear from talking to politicians and industry at both Party Conferences that heat decarbonisation is likely to become a key focus over the next 6-12 months. Often neglected and seen as too difficult to solve, how to decarbonise heat and buildings can’t easily be ignored for much longer.

With key decisions over future technologies expected to be taken in 2026, impatience from industry for the introduction of the Future Home Standard and questions over exactly what Labour’s Warm Homes Plan looks like, this is a theme that will occupy much more policy, political and media time in the months to come. It’s also a space where the government’s thinking is less mature, creating significant opportunities for constructive solutions – both at a policy and delivery level.

The future direction of Conservative energy policy is starting to emerge

The outcome of the Conservative leadership election at the start of November will clearly shape how the Party scrutinises Labour’s energy policy over the course of this Parliament. However, a number of themes are already becoming clear. At the heart of it is likely to be a focus on supporting new nuclear – a combination of GW scale and newer technologies like SMRs, AMRs and fusion. The support for nuclear from Conservative Party politicians at panel discussions in Birmingham was fulsome, and centre-right thinkers are pushing the technology heavily. Conservative Party politicians believe that Labour’s support for the technology is relatively shallow, offering them a chance to highlight policy gaps.

Beyond this, expect continued scrutiny of the impact and value of GB Energy, continued support for North Sea oil and gas, and an argument that the 2030 Clean Power target is creating unintended consequences – increasing the whole system costs of renewables and leading to a lack of focus on medium to long-term technologies. The challenge in the long run will be how to build a distinctly Conservative policy platform while engaging constructively with a government agenda which they instinctively perceive as overly centralised and planned.

Share this content:

The great aviation debate: can we do it better?

Pity the poor Planning Inspectors. They spend years qualifying as a town planner and then find themselves asked to answer one of the most contentious questions in British politics – the future of aviation. That at least must be what it feels like to be the Inspector in charge of the current enquiry into Gatwick’s plan to expand using its northern runway. And Gatwick is just one of half a dozen airports with plans to increase capacity.

Expanding airports has never been easy but the list of challenges has got a lot longer in the last decade. Air quality and the path to Net Zero have joined noise and the local environment in the top tier of issues. And any major proposal to expand needs to show not just that it will meet a need and bring social and economic benefits, but that it is consistent with national policy and will mitigate any adverse effects.

Of all these issues the one where the stakes are now highest is climate change. And that’s true politically as well. Aviation is hard to decarbonise, but it’s also emotionally charged in a way that (let’s face it) grazing cattle or sheep are not – even though agriculture is actually responsible for more greenhouse gas emissions and far fewer jobs than aviation.

With Labour’s focus on the economy, and an industry that is ready to expand and create jobs and growth, it’s easy to predict some difficult debates about aviation if they form the next Government. And those debates are likely to focus above all on airport expansion: whether it’s the most important issue or not, it can be understood and it can generate feelings in a way that many other aspects of the environmental agenda cannot.

We can all see this risk coming, so what to do about it? Can we manage this debate any better, so that it is less likely to turn into a zero-sum argument played out in the media about climate vs growth? To its credit, the current Government has already started to do lots of things that I suspect any Government will want to do: set out an ambitious strategy for Sustainable Aviation Fuels, invest more in aerospace R&D to try to improve fuel efficiency, and lead efforts around new global mechanisms like CORSIA at ICAO.

There is lots more to do here to ramp up delivery, not least on SAF. But it’s also striking that other aspects of the debate are less well developed and more polarised – which is never a good sign.

Let’s look at positions on airport capacity. The Committee on Climate Change has recommended a new framework for managing this nationally. It says there should be no net expansion in airport capacity between now and 2050: if there is expansion in one location, capacity should be reduced elsewhere. Under the CCC’s model, by 2050 the capacity of Britain’s airports would basically match demand – there would be a 25% increase in passenger numbers over 2018 levels and every airport would be more or less full.

The Committee says there should only be a net increase in airport capacity if aviation reduces carbon use even faster than the Government is assuming – for example because of huge breakthroughs in SAF or electric flight. This would be a radical intervention in the economy – managing capacity across the country’s airports, closing some to open others. It obviously raises lots of practical questions (including costs), as well as focussing on airport capacity more than the underlying issue of carbon emissions.

The Government by contrast thinks that the path set out in its Jet Zero strategy should allow aviation both to decarbonise sufficiently and to increase capacity and passenger numbers, with a 70% increase by 2050. This is based on assumptions about the development of technology – mainly SAF and fuel efficiency – as well as major changes in the pricing of emissions globally through CORSIA, that would need international agreement. The CCC, and some others, think these assumptions are just too risky and optimistic.

It seems a shame if the debate is left there, as an argument about assumptions when the truth is no one really knows. What is striking to me, as someone who has been around the block on public policy, is that the underlying issue is not really about technology – it’s about how you deal with uncertainty and create enough confidence that future Governments will act to limit emissions. And those are issues that come up and get resolved not too badly in other areas of public policy – pensions for example.

A bit more thought about solving these problems might be time well spent. It just might make life easier for a new Government, never mind the people running airports and, yes, the poor planning inspectors.

Share this content:

Resetting net zero: the implications for business?

One of the key questions on the minds of business representatives attending Conservative Party Conference in Manchester this week will be just what the implications of the Prime Minister’s reset on net zero are. Industry will be looking for reassurance from ministers over the coming days that the broad net zero agenda remains in place and for confidence on other policy measures.

Last week, WA hosted a webinar with Nathalie Thomas, former Energy Correspondent and writer of the FT’S LEX column and Sam Hall, Director of the Conservative Environment Network to explore whether the political consensus on net zero is broken, and if it is, what that means for business.

These are our key takeaways:

1. There may have been limited substantial policy changes, but it has still caused uncertainty

The Prime Minister’s speech gathered significant interest, but on the substance, it arguably moved the dial less. While the phase-out date for petrol and diesel vehicles has shifted back five years, the ZEV mandate proposals announced by the government in recent days showed there will still be a very significant increase in EVs as a proportion of the market by 2030.

There are large swathes of the net zero agenda – particularly on industrial and power decarbonisation – that have not been impacted by these specific proposals. However, Sunak’s speech still caused concern and disruption to many of these businesses. For businesses and investors the sense that long-term policy frameworks could change so suddenly, has cast doubt over the certainty and stability of other policy areas.

2. It’s all about the politics

As we enter a critical general election campaign businesses need to recognise that politics is ruling the day. Ideas may stand up on pure policy and technical terms, but if they don’t fit into the government’s political agenda they’re unlikely to be taken seriously, and policy already in train that doesn’t meet this test could be under threat.

This means it is essential for business to fully understand the different factions and priorities within government, and knowing who’s influencing No10 and key departments. Messaging and policy asks from businesses need to be aligned with these political trends to succeed.

3. But how effective was the political trap the government tried to set for Labour?

The motivating factor within government was to force Labour into having to defend policies presented by government as expensive and disruptive to consumers. No10 wanted to create a ‘wedge’ between the parties. The Labour Party appear to have avoided this with a pragmatic commitment to reinstate the 2030 ICE phase-out date and by suggesting they will review the approach to domestic heating if they enter government.

The Conservative Party’s position in the polls has stabilised, and in some cases improved since the speech, but it is still to be seen whether it changes the fundamentals ahead of the general election. Currently, that doesn’t appear to be the case.

4. Businesses can do more to communicate the benefits of the green transition

Businesses are understandably frustrated at the policy instability. However, it also places the spotlight on the responsibility that businesses have to make the case for net zero and the green transition. The Prime Minister’s renewed focus on consumer affordability makes it even more critical for businesses to show that the agenda – and specific policies that will fit within it – will reduce costs for consumers and offer the best value for taxpayers and consumers.

Equally, the promise of ‘green jobs’ is made regularly, but there’s a renewed opportunity in the run-up to the next general election for businesses to be more specific and tangible about this – where are these jobs, what will they look like, how can they show they are ‘real’ and not just numbers from a spreadsheet?

This will make it much harder for policymakers to row back on the wider agenda in future, with clearer acceptance of the benefits and value, with net zero not just perceived as a cost.

Share this content:

Sunak draws battle lines over environment

The Prime Minister has moved to put clear blue water between himself and his predecessors in Number 10 and has broken the political consensus on how to reach net zero.

By delaying deadlines for phasing out new petrol and diesel cars until 2035 as well as scaling back requirements on phasing out new gas boilers, Rishi Sunak is seeking to give voters a clear choice between Tory and Labour environmental policy.

His decision generated favourable headlines in right-of-centre media but has alienated powerful voices in the business lobby.

Marc Woolfson, WA’s head of Public Affairs, draws eight early conclusions from the announcement.

This is a highly political move to create clear dividing lines with the Labour Party on net zero policy – as well as who should pay and when. The government is betting that voters will welcome the removal of costly and inconvenient interventions on home heating and insulation.

The political strategy behind this was to force Labour to take contentious positions and make financial commitments that could damage its economic credibility. At a political level, Number 10 will feel happy that the PM’s statement has landed well with the audiences it was intended for. It has been lauded by right-leaning media. But there are questions over how effective it has been in damaging Labour.

At first blush, Labour appears to have managed to avoid the ‘bear traps’ that have been set for the party, taking a nuanced approach to the various measures announced in Sunak’s speech. It has vowed to reverse the PM’s decision to kick the ban on new petrol and diesel cars down the road. In contrast, it has committed to assessing measures designed to decarbonise heating more fully if it wins the election.

Many of the reasons Sunak gave for implementing the delay echo concerns that many in industry as well as would-be drivers of electric vehicles have already raised – notably on EV charging infrastructure, lack of access to grid connections and an underdeveloped UK battery industrial supply chain. Interesting, then, that powerful voices such as the Ford motor giant and the SMMT industry body have been among the loudest voices protesting against the announcement.

As ever, the devil will be in the detail. Across the economy – particularly in the power sector – reforming grid infrastructure has been the number one concern of businesses for some time. The rhetoric from the Prime Minister gives industry confidence, but there will be a need to see exactly what this means in practice and whether it can bring forward the time it takes to build new infrastructure.

Massive investment is needed to overcome these challenges, which requires confidence and a stable policy framework. Sunak’s announcements, whilst framed as pro-consumer and (at least partly) in line with the concerns of business, are likely to weaken the UK’s attractiveness as a destination for global investors. The potential future economic gains and jobs that have underpinned the political consensus up to now may also be under threat.

Beyond the specific measures, the general mood music will leave a lingering concern amongst businesses that as the election gets closer, Number 10 may feel that it is politically convenient to scale back other elements of net zero policy. Those parts of power or industrial decarbonisation that are seen as particularly costly or disruptive to the public, such as critical electricity pylons to connect new renewables projects, or essential low carbon technologies that come with significant price tags may be particularly vulnerable. Recent scrutiny of a consumer levy to fund new hydrogen projects may offer a glimpse of what is to come.

It’s a useful reminder to business of the importance of looking at new proposals through the lens of consumer affordability. In the run-up to the election, clear evidence of how specific projects and policy ideas deliver best value for money for taxpayers or billpayers will be crucial.

Significant details still need to be fleshed out, following the headline announcement. Labour also has to decide whether to hold onto positions which opponents in Parliament and in the media will portray as anti-consumer. The party must hope that its Industrial Strategy can convince a sceptical public that there are major gains to be made. Whether this will resonate on the doorstep in the heat of an election campaign remains to be seen.

Our analysis of the media coverage of Sunak’s announcement shows that he has won the staunch backing of the popular press and right-wing commentators. While he generated huge media interest (14,000 mentions across traditional media), coverage has been broadly neutral.

The same could not be said for social media, where the great majority of posts are critical.

Join our webinar on Wednesday 27th September, to explore what these recent Net Zero policy changes mean for transport and energy businesses — Chaired by WA Director Angus Hill, with insights from Nathalie Thomas, writer of the FT’s Lex investment column and the paper’s former energy correspondent, and Sam Hall, Director of the Conservative Environment Network.

Date: Wednesday 27th September
Time: 4.00pm – 5.00pm
Location: Zoom Webinar

Please RSVP to events.rsvp@wacomms.co.uk

Share this content:

Will consumer scepticism and the cost-of-living crisis remain a roadblock to rolling out electric vehicles?

With just over six years to go until the UK government’s ban on new petrol and diesel vehicles comes into force, decarbonisation policies, EV charging strategies, and infrastructure plans abound – but consumers still need to be convinced that electric vehicles are cost-effective and practical.

Electric vehicles are the cornerstone of the UK’s transport decarbonisation agenda, exemplified in the government’s ambitious deadline for ‘all vehicles to be able to drive a significant distance with zero emissions’ from 2030.

The debate on the practicalities of the ban and the impact it will have on consumers is dominating political debate and it means understanding the challenges facing motorists and their experiences is essential.

With 83% of new vehicles registered in 2022 still fuelled by petrol or diesel, WA polled 1000 members of the public to find out their views on EVs and the potential barriers to adoption. Explore our findings below.

Will consumer scepticism and the cost-of-living crisis remain
a roadblock to rolling out electric vehicles? [PDF]

To find out more about WA’s work supporting high-profile organisations on sustainable travel, net zero, and energy issues, please contact Jamie Capp – by email jamiecapp@wacomms.co.uk or on 07910 004 035.

Share this content:

What does a government restructure mean for the energy sector?

You’d be forgiven for having a sense of déjà vu with the announcement of a new separate Energy department, with a return to the structure of the Brown and Coalition governments. With Rishi Sunak committing to this change in his summer leadership campaigns, and recent reports from Chris Skidmore and Andrea Leadsom both recommending this, it felt inevitable. It is however unusual to make such a radical change so close to the next election.

So what does this mean for the energy industry, currently seeking to deliver a transformational shift to a low carbon economy?

A risk of short-term disruption as the department ‘beds in’

Major machinery of government changes take time, effort and focus, particularly from senior officials. Establishing a new department creates short-term uncertainty amongst officials and risks urgent policy priorities being deprioritised.

The retention of the current political team – Shapps, Stuart and their advisers – maintains policy leadership and largely ensures a continuation in approach.

A more focused department doesn’t necessarily mean better outcomes

One school of thought is that a singular focus from the new department on energy will deliver better results, without the distraction of other business issues and with the whole department aiming in the same direction.

This may well be true, but a new department – even with a competent and respected Secretary of State – is on its own not going to move the dial on key sector agendas, such as planning reform and changes to the grid to speed up offshore wind deployment or establishing a hydrogen market in the UK. Achieving these requires a more radical and ambitious approach to policy delivery, which ultimately needs the support of the political centre, namely No10 and the Treasury.

As the next General Election gets closer, there’s a clear risk for the sector that the singular narrative focus from government on the Prime Minister’s ‘five key priorities’ pushes aside the detailed policy action required for the UK to stand any chance of achieving its 2035 power decarbonisation target. The industry’s priority has to be to frame its case in terms of helping achieve these goals, specifically on driving economic growth and halving inflation.

Framing arguments through an energy security lens

Government messaging on energy has been shifting to focus on energy security for the last year, with an even greater focus post the Johnson government. The unveiling of the new department does highlight this shift in government focus very starkly: energy security is specifically mentioned in the name, and prioritised over Net Zero; and the absence of any reference to low carbon power or green growth in the government’s overview of the department, focusing purely on security and affordability.

The industry has made a strong case that low carbon power and energy independence are two sides of the same coin, and there needs to be no choice between them. However, there will be a need to double down on this case, and to shift messaging to emphasise the benefits to security of supply when seeking government support.

The industry will have to work harder to make the link to economic growth

Climate advocates within the Conservative Party have long sought to frame the case for action on Net Zero through the lens of green growth and jobs. The location of major projects, be that the renewables sector, hydrogen projects or new nuclear sites are in traditionally economically left behind areas of the country. The Net Zero transition is one of the clearest routes to delivering levelling up.

The combination of energy and business policy within one department made it easier to make this case, and for the government to recognise it. That now may become harder. Tying energy to jobs, skills and growth (particularly in the right, electorally important areas) is still the clearest route to securing government backing, particularly from the Treasury. It will be incumbent on industry to make this compelling argument even more effectively, bringing data and human stories to the fore to show why government needs to quickly push the right policy levers that support industry.

Share this content:

Financing the future of Net Zero

Earlier this week I was delighted to attend UKSIF’s Autumn Conference, where speakers from across the financial services sector discussed key topics such as the impact of the political environment on the green agenda (spoiler – it’s big); recent changes in the regulatory landscape; and the critical role of biodiversity. Green Party MP for Brighton, Pavilion, Caroline Lucas also took centre stage to provide a no-holds barred view on the “fundamental mismanagement” of the economy and what we need to turn this ship around and hit our Net Zero ambitions.

The discussions were wide-ranging and incredibly thought-provoking, but my top take-aways around how we are going to reach Net Zero were:

1. The UK needs a robust regulatory framework

Regulation, clearly designed for Net Zero and nature, which provides the right signals to finance to invest, will unleash capital where it’s needed most. If people can trust that Government regulations are here to stay, it will incentivise huge investment in sustainability – enabling the UK to re-position itself as a global climate leader and simultaneously help to solve the climate crisis. Essentially, Government support and signalling is our Golden Ticket to a sustainable future (Rishi, please take note).

2. Biodiversity isn’t just a “nice to have”

As Caroline Lucas so aptly put it, “nature fundamentally underpins human wellbeing.” If we continue to eradicate biodiversity, all other climate goals will be missed. While the UK has signed up to the 10 Point Plan to bridge the global nature finance gap, we still have some way to go to successfully funnel finance into this crucial area. The good news here is that the data around biodiversity is becoming increasingly accessible and with COP15 (the biodiversity COP) kicking off in less than a month – action is going in the right direction.

3. Consumer education is critical

Industry conversations around taxonomies (of which there are 30, globally), ESG transaction flow and ensuring a Just Transition are, of course, essential. However, what we need to remember is how to communicate this to the end investor – the general public. So much of what needs to be done comes down to behaviour change – with investors voting with their feet, asking probing questions of their fund managers and making sustainability part of the growth agenda. Consumer understanding and awareness around what Net Zero really means is low and, as WA’s recent research highlighted, confusion reigns when consumers are asked what they are actually investing in.

While it’s brilliant to hear the financial industry unite in its desire to hit Net Zero and show that solutions really are at hand, let’s not forget that we need to bring the main audience – the end consumer – along with us. Clear communication and time spent educating the public on what the industry is doing, and why, has a crucial role to play in achieving our sustainability goals and delivering a future to be proud of.

Share this content:

Posts Tagged ‘Net Zero’

Transitioning to Net Zero: A Guide to the Energy Sector in 2025

Powering on: what have we learnt about energy from this year’s party conferences?

The great aviation debate: can we do it better?

Resetting net zero: the implications for business?

Sunak draws battle lines over environment

Will consumer scepticism and the cost-of-living crisis remain a roadblock to rolling out electric vehicles?

What does a government restructure mean for the energy sector?

Financing the future of Net Zero

Register for insights

Sign Up