The first one hundred days of any government creates a flurry of activity, from publications of documents, which had to wait in the pre-election period until a clear government was established, to implementation of brand-new policies.
The new Labour government has made it clear that green energy and net zero are key priorities for them. This is unsurprising, given one of its five key manifesto commitments included positioning the UK as a “clean energy superpower”. Since the 4th July, the energy sector has seen a steady stream of interesting and exciting policy announcements, proposals, and commitments.
Engage has been following these policy announcements and consultations with particular interest.
GB Energy Established & private investment unlocked
On the 25th of July, the government established GB Energy as a new publicly owned energy company. The organisation will invest in and scale up homegrown clean power, funded by an £8.3 billion windfall tax on the profits of oil and gas companies. By focusing on domestic energy production, GB Energy is intended to create jobs and boost energy independence in a time of Volatile markets. One of GB Energy’s core functions is accelerating investment in renewable energy, working with the private sector to develop and scale energy technologies. The government further bolstered this investment mission on its 98th day of government by announcing a new scheme to attract investment in Long Duration Energy Storage (LDES). The new ‘cap and floor’ investment support scheme is intended to build investor confidence, unlocking billions in funds to build projects and create jobs. Highview Power, a leading provider of LDES, announced a few days later that it intends to develop four new 2.6GW power plants in the UK by 2030 under the scheme.
By focusing on investment in both generation and storage, Labour seeks to deliver a smart, flexible energy grid which can make use of various distributed energy resources to function cleanly and securely. Diverse generation sources and adequate energy storage are needed to meet demand once the UK transitions to clean energy. This is to avoid ‘dunkelflaute’ situations, the German phrase for a phenomenon that occurs when there is little or no energy generated by wind or solar power.
At Engage Consulting, we understand financiers’ critical role in fostering growth and innovation within the energy sector and the importance of GB Energy’s role. Our team of seasoned industry professionals frequently helps organisations conduct targeted due diligence, evaluate emerging trends, and pinpoint investment opportunities.
The National Energy System Operator (NESO) established
On the 13th of September, National Grid announced it would be selling its Electricity System Operator (ESO) to the government for £630 million. On the 1st of October 2024, the National Energy System Operator (NESO) took over the responsibilities of the Electricity System Operator (ESO). This move to public ownership is intended to make planning and operations of the energy network more strategic and deliver a more coordinated approach to grid connections and renewable energy deployment.
NESO has also taken over the Future Energy Scenarios (FES) initiative, the most recent of which was released on the 15th of July. The 2024 FES outlines three main scenarios to achieve Net Zero by 2050: Holistic Transition, Electric Engagement, and Hydrogen Evolution, each presenting different strategies for decarbonising the energy sector by 2050. The first two scenarios depend closely on the results of initiatives involving Engage Consulting, namely the government programmes on Alternative Energy Markets Innovation Programme and Interoperable Demand Side Response programme. The government is scheduled to decide on Hydrogen for heating in 2026, which will impact the balance of the Hydrogen Evolution pathway and future clean heating policies. You can read more about the Hydrogen aspect of the FES report in our blog why hydrogen provenance matters for Net Zero. 
Funding announced for the UK’s first Carbon Capture & Storage site
The Government has confirmed £31.7 billion of funding over 25 years for the Carbon Capture & Storage (CCS) sites in Teesside and Merseyside. The move is expected to create thousands of jobs and attract £8 billion of private funding. The 2024 FES emphasised the role of CCS across all three pathways to Net Zero, indicating a need for up to one hundred million tonnes of CO2 per year of CCS capacity by 2050.
Minimum energy efficiency standards for residential Landlords
At the Labour Party Conference on the 23rd September, Secretary of State Ed Miliband MP confirmed that the government will launch a consultation proposing that landlords cannot rent out domestic properties that do not have an Energy Performance Certificate (EPC) rating C or higher by 2030. A similar proposal for residential buildings to be made EPC C compliant by 2028 were dropped by Rishi Sunak’s Conservative government in October 2023. Labour has revisited it to complement its “Warm Homes Plan” to improve energy efficiency and reduce fuel poverty.
Along with pushing landlords to improve building fabrics such as window glazing or insulation, this move could also incentivise the installation of solar panels or heat pumps as part of a long-term solution. The role of implementing other smart technologies and storage may also increase in the future, as the previous governments’ consultation on the ‘Home Energy Model’, which would replace the standard assessment procedure currently used to calculate an EPC, could build energy flexibility of a household into its modelling. This would require innovative approaches to support low carbon installations and consumer engagement with energy, including those being trailed by Engage in the DESNZ funded “ISEE Retrofit: A smarter transition to Net Zero” project.
Government launches consultation on National Planning Policy Framework with many proposals supporting Net Zero
The Ministry of Housing, Communities and Local Government (until recently named the Department for Levelling Up, Housing and Communities) has launched a consultation titled Proposed reforms to the National Planning Policy Framework and other changes to the planning system. This ambitious consultation seeks views on a proposed approach to revising the National Planning Policy Framework to achieve sustainable growth in the UK’s planning system. The proposed changes include support for the planning of Giga factories, which are essential for electric vehicle supply chains.
The consultation also calls for broader views on changing the Nationally Significance Infrastructure Projects regime to capture wind, solar and Gigafactory projects.
MHCLG publishes English Housing Survey report showing EV charge point numbers for the first time
The 2022-23 English Housing Survey report was published on the 18th of July and highlighted the progress and ongoing challenges in improving energy efficiency. The Energy Report reveals that the proportion of homes with an Energy Performance Certificate (EPC) rating of A to C has increased. The survey also highlights the need for further upgrades, and the importance of low-carbon heating systems to help make households more efficient, most notably in the private rented sector. Access to this data set will be crucial in Labours ‘Warm Homes Plan’ and will inform accurate impact assessments and policy design. Data on EV charge point access was also published for the first time under the amenities sub-section, which will be crucial for central government and local authorities planning infrastructure.
Making low carbon technologies accessible to various household demographics will be key in delivering energy efficient homes. Our ongoing work on the DESNZ Alternative Energy Markets Programme has delivered pioneering insights into tariff design that can help fund low-carbon technology without exclusionary up-front costs, using innovative tariffs that reward installs and demand reduction. If you are interested in future supplier or energy-as-a-service models you can reach out to us for more details. 
Engage’s role in government policy
Engage Consulting has played key roles the implementation or design of government policy in the energy sector across its 20+ years of operation. This includes establishing the flagship Alt Han Co organisation, which has been pivotal in enabling energy suppliers to deliver government mandates on smart metering. We continue to be a core part of trials to inform government policy for ambitious change in the future, playing a key role in two Flexibility Innovation Programme projects. This includes testing governance Interoperable Demand Side Response programme and programme managing innovative tariff trials within Oxfordshire under the Alternative Energy Market programme. If you are looking to prepare for or inform government policy in the Energy Sector, including by working with us as an innovation partner under Ofgem’s Innovate UK funded Strategic Innovation Fund, reach out to us.
Written by Grace Carroll, Senior Consultant
