Stay informed with free updates
Simply sign up to the UK energy myFT Digest — delivered directly to your inbox.
The writer was group chief executive of BP from 1995-2007. He sits in the House of Lords as a crossbench peer
A key test for the parties competing in this UK election is whether they have serious plans for the country’s green energy transition. What will they do to combat climate change and its existential threats of famine and mass migration?
Any such plans need to keep energy supplies secure, while reducing greenhouse gas emissions and containing costs. The best recent estimate is that this will require investment of around $3.5tn a year globally. That will only be acceptable if we can make the energy transition fair, both across the world and nationally. That’s why investments in science and technologies that eliminate emissions at a low cost are so important. And this is where the UK, and the next government, can have a disproportionate global impact if it makes the right decisions.
We may be the source of little more than 1 per cent of the world’s emissions but we have long been a crucible of ideas for producing and consuming energy in new ways. A renewed commitment to research and funding in a handful of areas of massive potential, such as energy storage technology and AI-based electricity supply systems, would be the best way for politicians to harness resources currently spread across a mass of unfocused activity.
Some of the means of reducing global emissions, such as wind and solar, are already expanding rapidly on the back of dramatic reductions in costs. The aspiration adopted at COP28, to triple renewable energy capacity over the next six years, is a good start but not enough. The next step must be to deliver grid-level, long-duration storage for all that electricity. Electricity currently supplies a fifth of the UK’s final energy demand; our target should be to double that within a decade and show others what can be done.
The next government can also set an example by putting substance behind some of the empty rhetoric that too often passes for climate policy.
We need to be realistic. The energy transition will be slower than many would like; we will need oil and gas for many years to come. Where we have previously awarded licences or are already working in existing UK fields, we should continue. This provides an important source of energy, which must be produced and consumed in responsible ways.
But beyond this, we should call a halt. Such a move will reinforce our intention to get to net zero and show timely leadership. It is also hard to believe that finding and developing the very limited oil and gas resources that remain will be economic — or cost less — than buying supplies from the world market if needed. The future of the North Sea, and the jobs and communities it supports, is not just in oil and gas but in the clean technologies that will power our future.
Energy security matters but the next government must recognise it does not depend on the UK being self-sufficient. We will continue to need imported oil and gas. The true keys to security are to ensure that we have diverse sources of supply and are steadily reducing imports by developing our own low-carbon alternatives.
Politicians should also ensure that the revenue from the remaining oil and gas production on the UK Continental Shelf is used to accelerate the transition. That means more investment in wind and solar, and in infrastructure, including long-term storage, that can bring those supplies to market. We also need more investment and research into efficient carbon dioxide removal; as well as advanced nuclear fission and fusion; and developing green hydrogen to make fertilisers and become a source of industrial heat.
The green transition is also about the demand side of the economy. So we will also need investment in improving the ways in which electricity is distributed and used, whether in homes, data centres, factories or transport.
All of this takes money. With public spending or borrowing inevitably limited, private investment will be essential. Incentives such as targeted capital allowances will help. The next government should also consider what we do with our oil and gas infrastructure: the costs of decommissioning it have been estimated at £40bn, with half due within the next 10 years.
The timetable for removing pipelines and platforms has never been fixed. Nor has the precise definition of “decommissioning”. New low-carbon developments in the North Sea could allow some facilities to be repurposed. Others could be left in place, which would release both public and private capital for more productive uses.
Achieving net zero in the UK by 2050, and ideally sooner, will not be easy. But with pragmatism, a spirit of rational optimism and the willingness across the public and private sector to work together, we can bring it about. Both parties must take this seriously. The tough choices we face cannot be left simply to market forces.