Madano Analysis – Net-Zero leads Labour Party Conference

Written by Ben Gascoyne, Senior Account Director for Net-Zero Transition 

Overview 

Today is the close of Labour Party Conference 2022, and yesterday saw Keir Starmer take to the stage in Liverpool to give his biggest speech of the year.

Comfortably ahead in the polls and with new PM Liz Truss dealing with an immediate and highly damaging backlash bordering on crisis following the launch of her flagship Growth Plan last week, Keir Starmer and Labour sought to present itself as the Government-in-waiting, with a clear and credible plan for power and prosperity. Starmer’s leader’s speech contrasted his party’s focus on long-term improvement and planning with what he portrayed as the current Government’s short-term crisis-to-crisis footing.

On the ground, our team noticed Labour’s confidence and belief in its ability to return to power.

Unequivocally, Labour is behind net zero, a theme that underpinned many of its major policy announcements, including its Industrial Strategy, transport policy and commitment to a new publicly owned renewable energy company. Keir Starmer said that “Clean energy is already cheaper than fossil fuels. Nine times cheaper. We just need more of it. This is about fair growth powered by clean British energy everywhere in the country.”

Labour consistently referred to net zero as a policy agenda that would deliver for the public, for industry, and for workers, and will expect businesses to take note.

What is clear is that Labour wants to hear from business and understand how sectors can deliver its vision in practice. The big picture is set, but detail is needed. By 2023’s Labour Party Conference, its manifesto will have begun to take shape and its agenda for power set. Having met and spoken with Labour’s shadow ministers, advisers, think tanks and party members over recent days, our strong advice is to begin communicating with Labour’s top team sooner, not later.

Labour’s new Industrial Strategy – Prosperity through Partnership

The Shadow Business Secretary, Jonny Reynolds launched a new Industrial Strategy – Prosperity through Partnership – to anchor how Labour works with industry and approaches growth if it wins the next general election.

Reynolds plans to establish a statutory, full-time and professionally staffed Industrial Strategy Council, a body to advise Government on long-term industrial policy opportunities, with an obligation to report to parliament. This will require legislation, but this will make it harder to abolish than Theresa May’s politically appointed version, which Boris Johnson did within three years of its establishment.

Fundamentally, Labour has aimed to make the case that it will increase spending, but will do so to adopt a strategic approach to investing in the UK’s green economy, in an effort to contrast itself with the new PM’s focus on tax cuts and deregulation.

The word ‘partnership’ is important to note – Labour expects its support for business to yield improved productivity, pay, working conditions and futureproofed jobs that are equitably spread across the country. Keir Starmer said “this will require a different way of working – the biggest partnership between government, business and communities this country has ever seen.”

Significant Industrial Strategy policy commitments

Labour’s Industrial Strategy sets the mission of a 100% clean power sector for the UK by 2030, on the basis that this will deliver economic gain, energy security and climate benefit. Hydrogen and the nuclear sector – including SMRs – feature prominently, as does a clearer commitment to solar power than the Conservatives. The detail of how this is delivered is yet to be set.

Additionally, it also sets the mission of the harnessing of data for public good, meaning the use of data science, open data and artificial intelligence to benefit society. Labour expects to leverage this to improve public services and key aspects of public life.

It has put in place four pillars – sovereign capabilities, global champions (exports), future successes (start-ups and scale-ups) and the everyday economy – to help assess its approach to investing and targeting interventions within those four missions. It is running an active policy commission to explore how it can improve the UK’s environment for start-ups, spinouts and scale-ups.

The bedrock of Labour’s Industrial Strategy is an £8bn Green Investment Fund. This was announced by Shadow Climate Secretary Ed Miliband and his team (including Shadow Climate Change and Net Zero Minister, Alan Whitehead, who spoke at Madano’s event with Hydrogen UK), and will seek to co-invest alongside the private sector to accelerate progress towards its policy aims while delivering returns for the taxpayer.

Hydrogen amongst other forms of renewables appeared very prominently in speeches by Keir Starmer and Ed Miliband, with Starmer saying that “Some nation will be the first to harness new hydrogen power. Why not Britain?”. Both Miliband and Starmer also confirmed Labour’s support for new nuclear in their speeches.

Elsewhere at Labour’s Party Conference, the Shadow Chancellor Rachel Reeves also pledged to support the Scottish Cluster’s plans for carbon capture.

Great British Energy

Keir Starmer made headlines on Tuesday by announcing that he will establish a new publicly owned renewable energy company, Great British Energy. Madano noted how well received the announcement was by party members on the conference floor.

The new company is expected to be modelled on France’s EDF, or Sweden’s Vattenfall, but will solely focus on renewables with the aim of establishing the UK in Starmer’s words as a “clean energy superpower”, with greater energy independence. He said that net zero is “at the heart of modern, 21st century aspiration”, and that Britain had wealth in “our air, in our seas, in our skies”, so should “harness that wealth and share it with all.”

He criticised the extent to which the UK’s current renewables were owned by overseas state-owned firms, with the rise in UK energy bills rewarding other state-owned energy companies.

To make this significant policy commitment possible, Labour aims to seed fund a £2bn publicly owned renewable energy company, but again, how this will be delivered remains to be detailed.

A more confident approach to transport policy

The focus on net zero also offered Labour the opportunity to begin putting in place a more confident approach to transport strategy, after difficulty earlier in the summer determining the party’s position on industrial action.

Making the case that a poor public transport system made net zero undeliverable, Labour’s Shadow Transport Secretary Louise Haigh has pledged to:

  • Renationalise rail. Highlighting existing public subsidy for rail operators in contrast to current crises across the rail network, Haigh has committed Labour to taking public control of rail. What this looks like in practice, particularly given Government plans to establish Great British Railways, were not fully detailed.
  • Invest in rail and low carbon infrastructure to support Labour’s net zero aims, although Northern Powerhouse Rail was the only project highlighted.
  • Further devolve control over public transport. Labour committed to greater devolution of regional public transport services, with a commitment to nationally expanding the devolved bus franchising powers recently won by the Mayor of Greater Manchester, Andy Burnham.

 

Please contact us for more information at MadanoNetZero@madano.com.

Your Party Conference Survival Guide: Madano’s Top Tips

Your Party Conference Survival Guide: Madano’s Top Tips

Written by Troy Aharonian, Net Zero Transition team 

Party conference season is upon us and will take place during the most unique political moment in recent memory. In the wake of the Queen’s tragic passing, a new PM being appointed, and new Government being formed, skyrocketing energy prices and inflation that needs urgent attention, the Government and Opposition both have a dozen competing priorities. 

  • The Labour Party Conference will occur in Liverpool from Sunday 25 September to Wednesday 28. 
  • The Conservative Party Conference in Birmingham from Sunday 2 October to Wednesday 5 October. 
  • The SNP Conference in Aberdeen on Saturday 8 to Monday 10 October. 
  • The Liberal Democrat Conference in Brighton originally scheduled for 17 September to 20 September has been postponed due to Her Majesty’s passing. 

To have a successful Conference, you should ensure some logistical arrangements are in order. 

  • Book your travel: One of the biggest challenges for many will be getting to the Labour and Conservative Party Conferences. There are currently no trains running from London to Liverpool on the Saturday and Sunday of Labour Party Conference. The Aslef union has announced that it will stage 24-hour walkouts on 1 and 5 October to target the CPC in Birmingham. Attendees will likely have to consider renting a car or bussing to Liverpool and Birmingham. 
  • Things are shaping up to be busy: Following the sort of half-way-house conference season we saw in 2021 – business is back, fringe events are well stocked, and MPs’ time is in high demand – it will be important to ensure that you plan your conference schedules carefully to ensure you make the most of your time in Liverpool or Birmingham, or indeed Brighton or Aberdeen. 
  • Wear comfortable shoes: While this may seem obvious, days at party conferences start early and end late. You will be on your feet for most of the day and events are spread across large conference centres. You will get your daily steps in so plan accordingly! 

Those looking to understand the political landscape over the coming year should pay attention to the following three things. 

  • Who values net zero: With the cost of living continuing to gobble up headlines, the Government is prioritising the immediate measures it has proposed. Meanwhile, it will be analysing all government energy policy including the current Energy Bill progressing through Parliament with four goals in mind: energy affordability, boosting supply and energy security, economic growth and meeting the UK’s net zero goals. Can net zero compete with other priorities like cost-of-living, energy prices, inflation, and the war in Ukraine? Or do the Conservative and Labour parties see this crisis as a reason to double down on their commitments to net zero?   
  • Who is vying for attention or trying to keep relevant: Given the extent of change, and the seemingly inevitable hard recession – many organisations use party conferences as a way to ensure their priorities maintain in manifesto writer’s minds and relevant to the party caucus. Recent years have seen automation, innovation and green growth as key area – it is expected that net zero will be front and centre this year (given conference planning starts in the spring) but what will the conversations sitting around this look like? 
  • The next General Election and Scottish independence: There will obviously be plenty of talk and preparation at party conferences for the next election. We have just seen a significant cabinet reshuffle in the Conservative camp, and this will take time to bed, time that the electorate doesn’t want to give the party. But equally for the Scottish National Party – marking intent for the fate of the Union will also be a key part of their weekend in Aberdeen.  

If you follow these simple tips, you will be set up for success at whichever party conference you and your organisation attend. If you would like to connect with a Madano team member at Labour or Conservative Party Conferences, please drop us a line at MadanoNetZero@madano.com. 

Madano Viewpoint- Heatwaves

Madano Viewpoint- Heatwaves

An opinion piece written by Chloe Sanderson, Senior Account Director, Net Zero Transition

Recently, travelling into the office is in and of itself a motivational tool to make sure we reach net zero. As I hop on the bus, I’m already fanning myself and trying to come unstuck from the vinyl seat, despite it only being 8am, and then we turn a corner and I’m met by a yellow, parched, dusty Common. If we were waiting for the reality of climate change to slap us around the face, we’re already there.  

The world of net zero has two main communications challenges and the summer heatwave has provided a solution to one of those: we can all see and feel that climate change is happening now. Every day another story emerges about hosepipe bans, soaring temperatures, agricultural struggles and gushing rivers turning into tiny trickles. It’s getting harder and harder to deny that we are in the early years of a crisis which is set to get worse before it gets better. 

However, the second challenge – communicating a solution – is still very much present. The main issue being that there isn’t one easy, low-cost, immediately available silver bullet. Industry and political leaders are facing the unappealing choice between fight or flight: either wade into the debate on where to put money and efforts to protect those in the midst of a cost-of-living crisis, whilst also laying the foundations for a net zero future; or bury their heads in the sand, stall, and hope no one notices that the world burst into flames on our watch. But the cost of not putting one’s head above the parapet is that nothing gets done and the climate crisis rages on. That’s too high a price to pay.  

That’s what I tell clients every day. It’s going to take bravery to speak up, we won’t get everything right and there will be some bumps along the way. We don’t have the silver bullet, but neither does anyone else, whether it’s hydrogen, nuclear, ultra-low carbon concrete or renewables. But it’s better to have moved the conversation on and at least tried to make a difference than look back and wonder if there was more we could have done. 

On that note, I better get back to the job in hand. We have no time to lose.  

If you would like to contact a member of the team, please email MadanoNetZero@madano.com

 

Not zero? Handling government relations when the net-zero consensus is under threat

Not zero? Handling government relations when the net-zero consensus is under threat

Written on July 12, 2022 by Ben Gascoyne 

Through nearly three years of crisis and scandal, Boris Johnson’s government maintained a strong, public commitment to ambitious net-zero targets and policies. Whether facing criticism for underinvesting or overinvesting in the net-zero transition, and whether or not his high-profile announcements led to actual deliverables, the outgoing Prime Minister reliably championed progress in low-carbon energy, industries and transport solutions amongst his Government’s headline achievements. 

As the Conservative Party’s contest to replace him gets going, pro-net zero voices from within the party have voiced fears that this support cannot be taken for granted.  

Multiple candidates for the leadership with the endorsement of their parliamentary colleagues have voiced their opposition to net zero as a policy priority, claiming the 2050 target is arbitrary, harming growth, preventing tax cuts and contributing to the cost-of-living crisis. Take Steve Baker MP, who said, while considering his own run: “I think if the public found that they got discount gas on their energy bills because they had accepted shale gas extraction near their homes, I think that would be extremely popular with them.” He has now backed fellow net-zero-sceptic Suella Braverman. 

Even if those candidates do not win, the price of their support in the later rounds may be high-profile cabinet positions or policy concessions. 

Of course, the support of Government is still going to be vital in the highly regulated, highly complex fields where net-zero solutions are most sorely needed, and where technologies are still in their infancy. 

So, in a world where the consensus on net zero is under threat, how can organisations driving the net-zero transition best communicate with political audiences? 

  1. Think about the politics 

According to current polling, hundreds of Conservative MPs may find themselves battling to hold onto their constituencies at the next general election.  

Almost uniformly, they will be looking to tell voters that they have delivered jobs, growth and pride for the areas they represent. That means new investment that they made possible and can press release to their local media, and the ‘hardhat moment’ for the front cover of their leaflet. 

For net-zero-focused businesses, it will be vital to speak their language. That means telling MPs how net zero translates to real, tangible benefit for their constituencies. That may mean shiny new electric or hydrogen buses, or new orders for a local business, or new apprenticeships to keep up with the demand for advanced new skills. Be clear: what’s in it for them, and how do they make it happen? 

2. Ensure officials are well briefed 

There is a vast gulf between standing out to party members in a competitive campaign and the realities of governing. 

One of those differences is that the next Prime Minister and their cabinet will be actively briefed and advised by civil servants with knowledge of the sectors they work in, the priorities of investors and key industries, and the limitations of Government. 

Organisations focused on the net-zero transition should proactively engage with those civil servants who can help improve the chances of getting a fair hearing by the next Government. Although political hearts and minds will still need to be won in the wider party, ensuring that Government’s civil servants, advisors and analysts are well briefed can be key. 

3. Stay positive about the big picture and the long term 

Although opponents may try to badge the net-zero transition as contributing to the cost-of-living crisis and the need to cut taxes, the businesses driving a sustainable future have every right to be positive.  

While the energy price cap is expected to rise significantly again this autumn due to continued high natural gas prices, the latest wind and solar contracts auction saw the price of new renewables continue to fall, and below fossil fuels.  

EV adoption is skyrocketing, as are new charger installations, resulting in lower per-mile costs for everyday passengers. Generally, the voters that Conservative MPs need to stand a chance at the next election are very concerned about climate change and want to back net zero. When asked, polling suggests it represents a rare win-win-win to prevent household insecurity, deliver economic growth and do the right thing. 

So, in a world full of problems, organisations with net-zero solutions should speak loudly, proudly and clearly about how they make the lives of voters more affordable, more secure and more prosperous. If the public at large continues to back those solutions as they get cheaper and more readily available, even the most sceptical of politicians will not stand in the way of history’s long arc. 

Whether speaking to voters, officials or politicians, if you are making the net-zero transition possible, this is no time to be shy. 

For more information on the political implications of the net-zero transition, please contact Ben or one of his colleagues at MadanoNetZero@madano.com. 

 

Can we look to the future, without focusing on the past?

Can we look to the future, without focusing on the past?

Andrew Turner, Associate Director in Madano’s Energy practice, shares his thoughts ahead of COP26. With the Conference finally here, hoards descending upon Glasgow, Greta Thunberg being greeted like a celebrity and the start of the dialogue, it is now time to see what ‘meaningful and effective’ (unsure what this is in Italian/G20 thinking) discussions and commitments (if any) will come from the largest international gathering since before the COVID-19 pandemic.

 

Staying relevant in the energy transition

However, one question keeps bugging me. In our race to Net Zero and the climate change commitments, can we really turn our backs on the past? Ben van Beurden’s comments were stark last week commenting that Shell ‘would not have been welcome’ in Glasgow. Whether we like it or not, Shell is one of the key influencers in the UK’s and global energy sector. Would you want your football team to play their cup final without their one of the most influential players?

We have seen the Global Investment Summit bring together exciting technologies, such as fusion, fuel cell and sustainable aviation innovators (all projects we support at Madano) seeking capital to progress along their development pathways. But with natural gas still making up a significant percentage of our energy system, and likely to do so for decades to come, we still need to look at the role oil and gas majors can play in low carbon transition.

Shell have focused on CCS; BP are a leading presence in the East Coast decarbonisation cluster and are setting 2050 net zero targets and Total have rebranded to the technicolour-dream-coat of TotalEnergies in a bid to communicate their commitment to change. We should not be afraid to acknowledge that the Net Zero, or our orderly transition as it is sometimes known, will be A) expensive B) hard work C) involve oil and gas and coal too, especially in the developing world. We can’t simply reinvent out way to a low carbon transition.

 

Accepting that we can’t forget the past

When we talk about ‘difficult choices’ we see the COP26 President Alok Sharma finding it ‘difficult’ to commit either way on Andrew Marr. We know that there will be changes to our lifestyles – whether that be subtle comments about eating less meat, or increases in taxes for long-haul flights. Things are changing.

The deeper communications issue for me, is the reality that every day we use oil and gas. Whether we like it or not, oil and gas underpins all our activity. We can’t drive our cars, drink a bottle of water or work on our laptops without it. Hydrocarbons play a key role in our society, however, this is not communicated clearly enough by organisations, individuals, and governments. Sure, there can be eye catching headlines from the PM about plastic recycling not working. Focusing exclusively on wind farms, battery plants and fusion distracts from key issues, such as where the oil and gas is going to come from to sustain our lifestyles and how we can ensure this is as low carbon as possible.

The central challenge is how we transition away from these sources of energy, as quickly as possible, but recognising some industries cannot simply be electrified at the flip of a switch. Project narratives and communications plans need to acknowledge the energy mix, today, tomorrow and in the decades to 2050. Stakeholders, whether that be investors, communities or the media are demanding more and more information to make their own decisions about how investments today will impact balance sheets and dividends in our Net Zero society.

 

What to expect from Glasgow?

We have already seen strong language from the PM around the clock ticking to midnight, Prince Charles coming to the table and Glasgow being the ‘best, last hope’ to hit our 1.5-degree ambition. The UK ranks 5th in the league table for cumulative carbon emissions and this means we have a sizeable role to play in supporting global decarbonisation. One of the core pillars of this COP is to increase financial support for the developing world to deliver $100bn climate financing a year alongside greater collaboration.

Looking closer to home, big issues like Cambo or continuation of hydrocarbon production will not be resolved this week, but with organisations calling for quicker and more transformational change to Net Zero we must recognise that our lifestyles can’t be left behind.

 

Madano Energy practice advises clients in the energy transition, infrastructure, and development sectors to shape their narrative, engage with Government and stakeholders and to communicate their objectives in creative and impactful ways. If you would like to speak to the author, Andrew Turner, or a member of the team, please contact us: MadanoEnergyPractice@madano.com.

Photo Credit: Markus Spiske on Unsplash

The UK’s First Ever Hydrogen Strategy – What Happens Now?

The UK’s First Ever Hydrogen Strategy – What Happens Now?

The UK Hydrogen Strategy provides a welcome route map for the sector but there’s still much more work to be done

August was a big month for the hydrogen industry with the long-awaited publication of the UK ‘s first ever Hydrogen Strategy.

The strategy showed how far the industry has come in convincing policymakers about the potential benefits of hydrogen within a very short time. It set out a clear direction of travel, with policy commitments set to unlock over £4 billion in investment and create thousands of jobs by the end of the decade. The government will support multiple technologies by taking a twin track approach to ‘green’ hydrogen, produced by using electrolysers powered with renewable energy, and ‘blue’ hydrogen production, enabled by carbon capture processes. The strategy contained funding options for hydrogen projects across the supply chain, including a £240 million Net Zero Hydrogen Fund, and a “preferred Hydrogen Business Model” will be designed to overcome the cost gap between low- carbon hydrogen and fossil fuels.

Still, the industry’s journey is far from over. Before the policy framework is finalised, there will be formal consultations on the preferred Hydrogen Business Model and the Net Zero Hydrogen Fund, as well as a ‘UK Low Carbon Hydrogen Standard’ and a hydrogen production strategy. A decision on using hydrogen for home heating has been put off until 2026. And the 5GW target may yet be increased. These provide the industry with a big opportunity to shape government policies on hydrogen. Government and the industry will need to work together to deliver the policies needed to support innovation, boost investment, and scale up low-carbon hydrogen in the 2020s.

The Hydrogen Strategy highlighted another, parallel challenge: the need for both the industry and government to look beyond Whitehall to achieve these goals. Local authorities will be important in ensuring adoption of hydrogen at the local level. The supply chain will need to scale up and reskill the hydrogen sector. And of course, public buy-in will ultimately be needed. The sector is increasingly aware of these imperatives and the government’s strategy contained a welcome commitment to work with industry, trade unions, the devolved administrations, local authorities, and enterprise agencies to support sustained and quality jobs.

Both industry and government seem to have their work cut out. Research over recent years has found that public knowledge of hydrogen and hydrogen blending is low. Likewise, many local authorities appear to have a limited appreciation of hydrogen, its potential and applications.

There is, however, a growing level of interest and debate around the role of hydrogen in delivering net zero and creating a prosperous economy. For instance, in the ten days following the launch of the Hydrogen Strategy, it was the subject of more than 440 articles in leading UK publications, a jump of more than 350 per cent on the previous ten-day period. While most of these articles appeared on 17 August, the day of the strategy’s publication, there was a steady drumbeat of coverage and commentary afterwards, with around 20 articles about the strategy appearing per day.

With key policies still to be finalised, important audiences yet to be informed and convinced about hydrogen’s potential, and a media that is becoming more interested, the hydrogen industry has big challenges ahead – and a great deal to play for.

On Tuesday 7 September, the Hydrogen Taskforce, a coalition of the industry’s largest organisations, will launch a major campaign to show how hydrogen can play a leading role in accelerating the UK’s journey towards net zero. The Building a Hydrogen Society campaign will showcase the many benefits for local communities of applying hydrogen in running public transport, powering our industries.

By Neil Stockley, Director of the Energy team. Madano advises clients across the Energy sector, if you’re interested in learning more, please contact: MadanoEnergyPractice@madano.com

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