After winning an historic landslide, the hard work starts now for new Prime Minister Keir Starmer and it will no longer be possible just to be less bad than the other guys.
Starmer must find some real policies and nowhere is that more true than in relation to energy, where he cannot continue to ignore the informed views from the sector in the way he did throughout the election campaign.
The disregard of the industry over the course of the last six weeks has been dispiriting for those of us within it.
Granted, it wasn’t just Labour that lacked a coherent or sensible perspective (and that may explain the way in which energy policy was reduced to a mere footnote in the national discussion) but as he turns his attention to economic growth and looks properly at energy transition from inside government rather than the sidelines of opposition, he should realise that in order to deliver his growth ambitions, the energy industry needs to be at the heart of government.
© Supplied by Piper SandlerDuring the election campaign, Rachel Reeves, the prospective Chancellor said that the Labour government would be “the most pro-growth, pro-business government the country has ever seen”.
If delivered, this should only be good news for the energy industry because throughout history, GDP growth and energy demand have been, and will continue to be, inextricably linked.
Ambition must match rhetoric
And in further good news, among the limited nods to the energy industry in the campaign, many of her colleagues, including the PM, trumpeted their ambitions for the UK to be a global leader in the energy transition. Marvellous rhetoric – again aped by most of the main parties – and, in fact, an ambition shared by everyone in the energy sector.
But to deliver that, there must be proper recognition of one of our key strengths, namely the North Sea oil and gas industry, rather than continued appeasement of social and economic vandals masquerading as protestors (and in some cases, politicians).
© Supplied by Just Stop OilThe new government should look closely at the way in which the UK has led the way in the global subsea industry and look to mirror that in energy transition.
Just as with subsea, it is the North Sea experience, highly transferable skillset, track record of innovation and global leadership from the oil and gas industry which must be maximised to its fullest while the cash flows and tax revenues are used to fund the energy transition.
That would see us at the forefront of emerging technologies in floating wind, hydrogen and carbon capture and storage which could be exported worldwide.
Energy tomorrow
But what must be recognised is that this transition will not happen overnight or, indeed, during the term of this government. You cannot switch off the taps today and wake up to a new energy system tomorrow. These sub-sectors need time to mature and require significant investment.
We are in a global renewables race with the likes of Norway, the Middle East and the US, all of whom recognise the inter-relationship between traditional and renewable energy sources and are investing heavily in both.
By contrast in the UK, the NIMBY approach to energy production and inadequate tax policies simply hamper our ambitions to be a serious force in the short, medium or long term.
Whether it be Starmer, Reeves or even Ed Miliband, who is expected to get the energy brief, someone must confront and connect those dots in the coming days, weeks and months.
Will GB Energy save us?
But what’s that coming over the hill? It’s not a monster but GB Energy. Maybe it’s the saviour and maybe this is where the new government great policy reveal will show us that they had the answers all along.
I certainly can’t wait to find out what it is and what it will do; how it will be funded; who will run it (surely not a politician or a London apparatchik with no real world/energy experience) and where will it be based. The fact no senior Labour politician would say Aberdeen is as worrying as it is nonsensical.
History has told us that successful governments place energy at the core of its operation. That must now be the case once again, otherwise, our chances of leading the transition are over.
Nick Dalgarno is head of Piper Sandler’s Eastern Hemisphere energy and power corporate finance team and is based in the firm’s Aberdeen office.
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