Rising star Claire Coutinho faces gruelling start in energy secretary role
Grant Shapps will no longer oversee the UK’s energy ambitions, taking up his new role as Defence Secretary – his fifth ministerial job in under a year at the behest of three separate Prime Ministers, making the frontbencher’s volatile career path an emblem of historic Downing Street disunity.
Every department now appears to be a revolving door, and his successor Claire Coutinho will be the fourth secretary of state to cover energy since this columnist started reporting on the subject less than two years ago.
The East Surrey MP has secured a major promotion with her new role as Energy Security and Net Zero Secretary, and is the first of the 2019 election in-take to join the cabinet – cementing her place as a rising star in the Tory party.
In some ways, she has been compared to Prime Minister Rishi Sunak, who Coutinho has previously worked for as a special adviser.
Both of them were supporters of Brexit, with backgrounds in finance, and they each ascended to their first big jobs from more junior positions – with Coutinho moving from under-secretary of state for children, families and wellbeing to energy security and net zero secretary.
Coutinho will of course be hoping that nothing as historic and as transformative as the Covid-19 pandemic lands on her plate mere weeks into the job, like it did with Sunak, but there’s no doubt her in-tray will be highly challenging from day one.
Coutinho’s in-tray: Restore energy sector confidence
With an election little more than a year away, there’s no point pretending the position is a long-term post
Nevertheless, Coutinho could present a less combative image than Shapps – who was prone to bizarre grandstanding such as conflating Labour with Just Stop Oil, while also premiering his showdown with supermarket bosses over petrol prices on social media.
Instead, she could ease jitters in an industry shaken by political whiplash from windfall taxes.
Pushing for policies backed by the industry (and many voters), such as planning reform and a stable tax environment would go a long to bringing the energy sector onside amid growing concerns over the UK’s investment climate.
There are also industry hopes she could be more interested in renewables than Shapps, with Coutinho using her first speech in parliament to praise the UK’s role in offshore wind and previously supporting wild belts for nature among new housing developments.
Subsidies? Spend money carefully
Coutinho will soon face calls from the clean energy sector for more taxpayer money – with the upcoming round for offshore wind projects set to underwhelm, and producers also smarting from the renewables levy on electricity generators.
Over time, it is hard to see how the UK cannot enter the subsidies race with the US and EU – but with taxes at a historic 70-year burden, Coutinho will have to approach this matter strategically.
The government has committed funds to technologies such as carbon capture and small modular nuclear reactors, but there is a strong case that this should be extended to offshore wind, another area the UK has the potential to reap huge dividends.
For this to happen, she needs to focus on how to maximise return on investment with cheaper bills, supply security and improved productivity through re-industrialisation, such as with floating offshore technology.
However, there also will be areas where the UK will have to depend on others to fund breakthroughs, with continued debates over full-scale nuclear, fusion, hydrogen production, and mineral procurement all worth engaging in.
This might include extensive diplomacy with allies, and crucially, disappointing some industries hoping for financial backing.
Blackouts and cold homes: UK’s winter scramble
There are further lingering questions over support packages for businesses and households, and the annual challenge to keep Britain’s lights on amid Russia’s supply squeeze on gas.
Household energy bills are likely to remain double previous levels, with Ofgem currently consulting on the idea of a social tariff during the coldest months of the year.
Coutinho should not push for unsustainable financial pledges, which will ultimately be Chancellor Jeremy Hunt’s call, with high energy bills here to stay for a decade – according to Cornwall Insight.
Meanwhile, there will be even fewer emergency coal plants online as contingency options and it is unclear if the West will be fortunate with the weather again, when milder temperatures kept gas usage down last year.
This means working with National Grid on winter plans will be essential alongside topping up LNG with US and Australian supplies, and pushing Centrica to bring Rough storage up to full capacity of 12 days.
Debates over the validity of net zero are also likely to emerge in the coming weeks with COP28 in the UAE on the horizon, while the Energy Bill set to go through parliament could bring up debates on everything from sustainable aviation fuel to Rosebank.
There is no doubt about it, Coutinho faces a baptism of fire in her new position, and all eyes will be on whether this new rising star continues to shine