The Johnson reshuffle has led to one of the most traditional Conservative administrations since the Thatcherite era and with any change there will likely be a movement in priorities across government. Johnson has started a pre-election spending spree, including a focus on new infrastructure, such as bringing forward proposals for a new high speed line between Leeds and Manchester. There has also been some rhetoric around the creation of green jobs, though how policy will be amended to achieve this is yet to be announced.
The low carbon agenda has become rather fashionable of late, with the rise of youth activists such as Greta Thurnberg and high profile protest movements including Extinction Rebellion, which brought London to a standstill in May this year. With it political leaders have widely expressed their desire to engage with the climate change agenda and this will be heightened by recent extreme weather and the upcoming COP 26 conference being chaired by the UK’s Claire Perry. That being said the characters that now form Johnson’s cabinet have traditionally been sceptical of the importance of the climate change issue. Johnson himself has said in the past that the problem is overstated and the new Minister for the department for Business Energy and Industrial Strategy, Andrea Leadsom, has a record of criticising onshore wind and voting for cuts in renewable energy subsidies. As energy minister in 2015/2016 she was in post at a time when planning laws for onshore wind in England were changed, effectively creating a moratorium for new projects. At the same time the feed-in-tariff scheme was cut significantly and a mechanism put in place to phase it out. New solar projects were also prevented from entering the ROC scheme, which was again brought to an end for new entrants. There was justification for these changes given subsidies were often generous and renewable electricity generation targets had been met.
The question now is how will the government react to a market where renewables are now cost competitive with conventional forms of generation and substantially cheaper than nuclear. Onshore wind is arguably now the cheapest form of power and government policy in England is effectively blocking its route to market. Large scale solar is also viable without subsidy. Ironically if the contracts for difference mechanism was opened up to new technologies other than offshore wind, providing a price guarantee for projects in a competitive environment, consumer prices would reduce even further as a consequence of a lower cost of finance being available. However, this wing of the Conservative party has historically stood in the way of land based renewables when objectors in their rural constituencies of strength have criticised new projects. Now the excuses of high price and artificial market mechanisms have disappeared it will be intriguing to see this governments’ reaction in light of the renewed vigour from the climate lobby and the general public.
Esther Mcvey’s appointment as planning minister will also be important here, with a number of very large, high profile solar parks being developed as Nationally Significant Infrastructure Projects. There’s no doubt that the new government has set out a pro business agenda with a green edge. Whether they challenge their more traditional supporter base with these issues following a new carbon reduction target will be interesting to see.
