Will Labour's plans for lower energy bills actually work?
King Charles has unveiled the new Labour government's plans for investment in renewable energy and other measures to tackle climate change at the state opening of parliament.
He set out Sir Keir Starmer’s plans to commit to clean power – with a focus on floating offshore wind farms around Britain’s coasts – and promised lower energy bills for consumers over the longer term.
"My government recognises the urgency of the global climate challenge and the new job opportunities that can come from leading the development of the technologies of the future," the King said.
What are the government's plans?
The King’s speech - which sets out Labour's legislative agenda for the coming parliament - outlined how government is “committed to a clean energy transition which will lower energy bills for consumers over time".
A key part of this will be investment in offshore wind farms, a technology in which the UK is already a global leader. It is second only to China worldwide in terms of planned offshore wind projects, and ahead of the US.
The new Labour government has committed to doubling onshore wind, and quadrupling offshore wind by 2030 – with offshore wind to hit 60 gigawatts (GW) of capacity by 2030.
The move will turn Britain into a ‘clean energy superpower’ and end Britain’s reliance on fossil fuels and imported energy, Labour believes.
King Charles said a bill will be introduced to set up Great British Energy, a publicly owned clean power giant that will accelerate investment in technologies such as offshore wind power.
Clean energy companies will be incentivised with a British jobs bonus of up to £500m a year from 2026, with a goal to create 650,000 new jobs by 2030.
The King’s speech also promised legislation to achieve energy independence, a bill to support sustainable aviation fuel and a bill to strengthen the powers of the water regulator and clean up Britain’s rivers.
How would it decrease energy bills?
Labour hopes Great British Energy will deliver "clean, secure, home-grown energy and lower bills for families". The £8.3bn company will lower energy bills by 2030, under Labour plans, by switching to domestically produced renewable energy.
During campaigning, Labour politicians suggested this could be up to £300 per household, based on October 2023 calculations by the think-tank Ember.
By ‘decarbonising’ and switching to renewables, the UK will no longer be reliant on imported oil and gas, which will mean British households will not be exposed to rapid price rises, such as those seen in the past couple of years in part as a result of the Ukraine war.
Decarbonising Britain’s electricity system would mean that electricity prices would no longer be linked to global gas prices, in theory allowing for a reduction in bills.
The energy research company Aurora believes that achieving a net zero power grid by 2030 – as opposed to the Conservative plan for 2035 – would result in cheaper energy.
Will it work?
The target to quadruple offshore wind by 2030 is extremely ambitious, and many have voiced scepticism that the previous target of 50GW could be achieved – never mind Labour’s new target of 60GW.
The Institute for Public Policy Research (IPPR) think-tank has suggested that the government might miss the 50GW target by as much as 18 years.
Shortages of installation vessels and foundations for turbines mean that the target is ‘impossible’, said Norman Skillen, general UK and Ireland manager for Benelux marine contractor Jan De Nul, speaking to the energy title Recharge.
But campaigners for cheaper energy welcomed the move, saying that switching to renewables is the ‘only way’ to avoid price shocks going forward.
Fiona Waters, a spokesperson for Warm This Winter said: "The only way to reduce bills in the long term is through a rapid roll out of renewable energy and insulation to reduce our reliance on volatile oil and gas, protect consumers from price shocks and offer jobs for local communities and the King's Speech is a good start.”
