Labour risks green investment climate with ‘wobbling’ over net zero, energy boss warns
The Labour Party needs to “stop wobbling” and commit to the “significant economic and social opportunity” presented by net zero, the boss of Good Energy has warned.
Nigel Pocklington, chief executive of the challenger supplier, argued it was increasingly difficult for businesses to predict the UK’s investment climate for new green projects and investments due to perceived mixed messages from Labour ahead of next year’s likely election, with companies instead craving certainty.
Labour are currently 22 points ahead of the Conservatives in the opinion polls, according to this week’s polling from You Gov.
Pocklington believed investors will “need clarity from the person who probably will be the next Prime Minister,” rather than “flip-flopping on oil and gas commitments,” referring to Labour rolling back on its green spending pledges earlier this year.
“It is unhelpful, isn’t it? I think most people making long-term investment decisions or certainly long-term capital decisions will have that in the back of their minds.
“Are we going to see some sort of watering down of the UK central green policy commitments? That’s unclear, but there’s certainly a bit of a tone around that which won’t help the sort of investments that we’re championing,” he said.
Good Energy is currently shifting from being chiefly a supplier of energy for its 250,000 customers to being a green investor, putting nearly £5m in Zap Map, a smartphone technology to locate electric vehicle charging units, as well as buying heat pump and solar installation business Igloo Works last year.
While Pocklington believed there was sufficient consumer demand for green products like these, he revealed he would have to consider “adjusting” the level of spending depending on policy.
“We’re obviously invested in these markets because we think they’re going to grow [especially] with these big legislative changes as well. If they’re going to get watered down, it’s becomes problematic to persuade investors to back our ideas,” Pocklington said.
Pocklington’s comments follow Starmer’s pushing for a ramp up in renewables to reduce the UK’s reliance on oil and gas, while also confirming he would honour oil and gas development pledges in the North Sea made under the current government in a bid to distance himself to Just Stop Oil, whose demands he described as “contemptible.”
A spokesperson for Labour said it has set out plans to make Britain “a clean energy superpower”, and that this was one of Starmer’s “core missions for government”.
“Through our Green Prosperity Plan, we will invest alongside business to cut bills for good, create good jobs, give the UK real energy security, and provide the climate leadership that the British people and industry are crying out for,” they said.
Pocklington believes, however, that net zero as a concept remains fundamentally mis-sold as a punishment measure to atone for carbon emissions and mitigate climate change rather than as a pathway to upgrading the country with cheaper, cleaner power.
This has made Just Stop Oil’s protesting and rhetoric “counterproductive”, he said, as it is centred on climate measures being a “hardship you need to bear for the greater good,” when instead policies such as bringing in heat pumps should be brought through because they are more efficient and are an upgrade.
He said: “This is a worthy sentiment but it is never going to be necessarily universally popular, as opposed to adopting the view these are better technologies for heating and transport, which will get better and be cheaper to operate.”
As for the incumbent government, he urged the Conservatives to push forward with reforms to speed up grid connection times to unlock private sector capital for new projects.
“If you take the view the UK has a great deal of private sector capital and innovation that wants to work on and invest in the energy transition, there are lots of things that we can’t do anything about because they are in the hands of government, which they should be getting on with – like making grid access – and almost be getting out of the way to allow private sector innovation in terms of services and products,” he said.
Good Energy is a London-listed company trading on the FTSE AIM All-Share, with its half-year results expected to be published next month – where it has confirmed to investors it also expects a bump up in profits in line with the wider sector since Ofgem’s reforms to the price cap.
A spokesperson for the Department for Energy Security and Net Zero said: “We have benefited from years of world-leading investment in new renewable power, with a 500% increase in the UK’s renewable energy capacity since 2010 – now the second highest amount connected to the grid in Europe.
“We are also working hand-in-hand with Ofgem and network operators to accelerate grid connections and will be publishing a Connections Action Plan reforming the connection process to reduce timescales further,” they added.