In the third and final post in my series on the energy policies outlined in the election manifestos of the three main UK political parties, I take a look at the second opposition party – the Liberal Democrats. My previous posts on the Conservative Party can be found here and the Labour Party here.
For readers outside the UK, the Conservatives are generally regarded to be a centre-right party, Labour centre-left having moved away from the far-left days of the Corbyn leadership, and the Lib Dems are also centre-left. The UK has a “first-past-the-post” electoral system meaning that coalition governments are rare. This denies more fringe parties political power since they cannot act as king-makers. The Scottish Nationalist Party (“SNP”) was the third largest party in the recently dissolve Parliament, but its MPs are located only in Scotland and they do not vote on matters that do not pertain to Scotland (ie matters which are devolved to the Scottish Government meaning Westminster legislation only applies in England and Wales). For that reason I do not include the SNP in this analysis.
It is generally considered to be bad form for parties to depart from their manifesto commitments once in office, so the manifestos are expected to provide a clear indication of the policies the party would enact if elected. It is possible for manifesto promises to be jettisoned, but there tends to be a political cost to that.
The manifestos can be found here:
- Conservatives https://public.conservatives.com/static/documents/GE2024/Conservative-Manifesto-GE2024.pdf
- Labour https://labour.org.uk/change/
- Liberal Democrats https://www.libdems.org.uk/manifesto
Ed Davey is turning the Lib Dems into a joke
The Liberal Democrat campaign appears to consist of the party leader, Sir Ed Davey, throwing himself off a variety of things from paddleboards to cranes. Clearly, he does not expect to be Prime Minister on Friday morning, but it would be nice if he took the Election more seriously. Politics is not a joke (despite the excellent Matt cartoon in the Telegraph lampooning Davey’s antics), and at a time when many MPs and candidates have been subject to abuse and even threats – and some have had their constituency offices fire bombed recently – his antics do nothing to impress upon people that MPs do a difficult and important job that is worthy of respect.
The Lib Dems limit their use of the word “Conservative” to 62 times in the 117 pages of their manifesto, but they make the rather unfair claim that families are “struggling with sky-high energy bills” because the Conservatives “just don’t care”. This is an offensive claim – the Conservative Government did not encourage Putin to invade Ukraine, causing gas prices to surge, and in response it provided subsidies to all households in a move that was difficult to afford in the post-covid period.
“Liberal Democrats will invest in renewable power and home insulation to drive a strong economic recovery, bring down energy bills and create clean, secure, well-paid new jobs.”
The Lib Dems’ main objectives for energy are very similar to Labour’s – invest in clean energy and clean jobs and bring down energy costs. It also wants to fund home upgrades, in particular rooftop solar. The Lib Dem manifesto repeats the fallacy that renewables will deliver cheaper energy and that this makes a move away from fossil fuels urgent. They want to achieve net zero by 2045, five years earlier than the current statutory target date, which the country is not on track to achieve.
Making homes “warm” and “zero-carbon”
The Lib Dems intent to make homes “warmer and cheaper to heat” with a ten-year emergency upgrade programme, starting with free insulation and heat pumps for those on low incomes, and to ensure that all new homes are zero-carbon. It plans to do this by:
- Drive a rooftop solar “revolution” by expanding incentives for households to install solar panels, including a guaranteed “fair price” for electricity sold back into the grid.
- Invest in renewable power so that 90% of the UK’s electricity is generated from renewables by 2030.
- Appoint a Chief Secretary for Sustainability in the Treasury to ensure that the economy is sustainable, resource-efficient and zero-carbon, establish a new Net Zero Delivery Authority to coordinate action across government departments and work with devolved administrations, and hand more powers and resources to local councils for local net zero strategies.
- Establish national and local citizens’ assemblies to give people real involvement in the decisions needed to tackle climate change.
- Restore the UK’s role as a global leader on climate change, by returning international development spending to 0.7% of national income, with tackling climate change a key priority for development spending.
- Make it cheaper and easier to switch to electric vehicles, restoring the requirement that every new car and small van sold from 2030 is zero emission, investing in active travel and public transport, electrifying Britain’s railways, and reducing the climate impact of flying.
The plans to integrate sustainability into the Treasury and ensure co-ordination of net-zero across government departments make sense. It does not mean plans would be delivered faster, but it might introduce a degree of coherence that is currently lacking. However, alongside sustainability and net zero, the other corners of the trilemma – affordability and security should not be forgotten otherwise civil servants may be incentivised to promote solutions that deliver net zero but push up bills and risk blackouts.
The Lib Dems are big on local representation, but they assume that accelerated net zero plans will be popular with the public. In the unlikely event that they come to form the next government, they may well find that these citizen’s assemblies insist on a slower transition, resisting new energy infrastructure in their local environs.
The Lib Dems share the hubris of the other main parties in wanting the UK to be a “world leader” on climate. The UK is a small and not particularly rich country – Tanzania has a similar population, and while the UK has the sixth largest GDP in the world it has the second highest national debt per capita). It is somewhat ironic that so-called “progressives” lean in to the legacy of colonialism and empire in this way – the British Empire had legitimate claims to be a world leader particularly in relation to the industrial revolution. Modern Britain not so much.
The Lib Dems also labour under the mis-conception that electric cars are desirable. Clearly, they have not read my blogs about the higher energy and resource requirements versus conventional cars. The public however appears to be way ahead of them with sales of second-hand petrol cars – the most environmentally sustainable cars on the road – out-pacing other types of car sales, and EV owners trading in their EVs for petrol versions.
Reducing household bills
The Lib Dems say they will reduce both energy bills and emissions, and “end fuel poverty”, by:
- Launching an emergency Home Energy Upgrade programme, with free insulation and heat pumps for low-income households and a central role for local authorities in delivering this programme.
- Providing incentives for installing heat pumps that cover the real costs.
- Immediately requiring all new homes and non-domestic buildings to be built to a zero-carbon standard, including being fitted with solar panels, and progressively increasing standards as technology improves.
- Reintroducing requirements for landlords to upgrade the energy efficiency of their properties to EPC C or above by 2028.
- Introducing a new subsidised Energy-Saving Homes scheme, with pilots to find the most effective combination of tax incentives, loans and grants, together with advice and support.
- Introducing a social tariff for the most vulnerable to provide targeted energy discounts for vulnerable households.
- Helping people with the cost of living and their energy bills by implementing a proper, one-off windfall tax on the super-profits of oil and gas producers and traders.
- Decoupling electricity prices from the wholesale gas price.
- Eliminating unfair regional differences in domestic energy bills.
It is unclear how the Lib Dems would make new homes “zero carbon” but it is unlikely that this is a genuine claim that extends to the embodied carbon of building materials. Regardless of any incentives offered to mitigate the upfront costs of heat pumps they will remain more expensive to operate as electricity is likely to remain more expensive than gas.
Like the Conservatives, the Lib Dems think the EPC measure energy efficiency (it doesn’t, it measures heating cost) and want all homes to be EPC C or better, which without EPC reform will be unfair and fail to incentivise useful and necessary works such as repairs.
The Lib Dems think they will “decouple electricity prices from the wholesale gas price”. There is no explanation of how they will do this, but it is easier said than done and has been more or less dropped from the Review of Electricity Market Arrangements (“REMA”). They want to remove “unfair” regional differences in energy prices without explaining what they consider to be unfair – the cost to serve varies across the country and the manifesto does not explain if the party considers prices should be equal across regions, or if the current apportionment of costs is in some way unfair, however the proposal for a social tariff is welcome.
Like Labour, they want to go further with a windfall tax. This plan is sheer ignorance – the UK-based oil and gas producers are not making “super-profits” and no-one cares about the profits they do make because they are not household names. Companies such as BP and Shell have earned very high profits in recent years, but as so little of their revenues are earned in the UK, the extent to which they can be taxed is also limited. This policy will not deliver what the Lib Dems think it will, and will further accelerate the exit of oil majors and even the smaller independents from UK exploration and production activity, reducing the available tax base still further.
The Lib Dems think more renewables will deliver energy security
The party plans to accelerate the deployment of renewable power and deliver energy security by:
- Removing the Conservatives’ “unnecessary restrictions” on new solar and wind power, and supporting investment and innovation in tidal and wave power in particular.
- Maintaining the ban on fracking and introducing a ban on new coal mines.
- Building the grid infrastructure required, facilitated by a strategic Land and Sea Use Framework.
- Implementing the UK’s G7 pledge to end fossil fuel subsidies, while ensuring a just transition that values the skills and experience of people working in the oil and gas industry and provides good opportunities for them, and takes special care of the regions and communities most affected.
- Investing in energy storage, including green hydrogen, pumped storage and battery capability.
- Working together with our European neighbours to build a sustainable supply chain for renewable energy technology.
- Building more electricity interconnectors between the UK and other countries to guarantee security of supply, located carefully to avoid disruption to local communities and minimise environmental damage.
At the same time, the Lib Dems want to “support the expansion of community and decentralised energy”, including:
- Empowering local authorities to develop local renewable electricity generation and storage strategies.
- Giving small low-carbon generators the right to export their electricity to an existing electricity supplier on “fair terms”.
- Requiring large energy suppliers to work with community schemes to sell the power they generate to local customers.
- Reducing access costs for grid connections.
- Reforming the energy network to permit local energy grids.
- Guaranteeing that community benefit funds receive a “fair share” of the wealth generated by local renewables infrastructure.
Oh dear. Tidal and wave power are highly unlikely to provide any meaningful contribution to energy security. Worldwide there are only two grid-scale tidal projects in existence, and both are small by grid standards (roughly 250 MW each). Tidal plays well with the public, which thinks as an island we should be able to take advantage of tidal abundance without understanding the challenges that limit its viability, but that’s no excuse for professional politicians to jump on the fantasy bandwagon.
Of course new grid infrastructure is needed, and all the parties want to promote it, but again this will be easier said than done. Supply chain and workforce constraints are real, and the 2-year lead times for super-transformers cannot be waved away even by throwing money at the problem. And very little of the supply chain is under European control – it is unclear how much influence the EU has when I is also experiencing difficulties in accessing the materials needed for the energy transition. The EU will not persuade reluctant Panamanians to re-open copper mines simply because they wish it. Similarly, green hydrogen is a hugely challenging concept to deliver and is likely to cost more and deliver less than expected.
There is a lot of talk of fairness. The Lib Dems want large energy suppliers to be forced to buy electricity from community projects and households at a “fair” price. But what is fair? At the same time that the party claims that renewables are “cheap” it implies it wants suppliers to pay more for it. If these renewables become more expensive for suppliers to buy, who do the Lib Dems think will pay this extra cost? It will be households, and in fact it will be the most vulnerable households who cannot afford or are unable to install their own solar schemes because they rent their homes or because they are unsuitable for solar panels (eg because they lack roof space or have thatch etc).
These plans are idealistic, unrealistic and lack logical cohesion.
The UK should lead the world on climate change
The Lib Dems want to “restore the UK’s role as a global leader on climate change” by:
- Restoring international development spending to 0.7% of national income, with tackling climate change a key priority for development spending.
- Showing leadership on the Paris Agreement by meeting the UK’s Nationally Determined Contribution and arguing for greater global ambition.
- Working together with our European neighbours to tackle the climate emergency, including by associating the UK Emissions Trading System with the EU ETS.
- Continuing the UK’s support for the UN Loss and Damage Fund for countries particularly vulnerable to the impact of climate change, to ensure a just transition for all.
- Pressing for all OECD countries to agree to end subsidies for foreign fossil fuel projects.
As well as being redolent of neo-colonialism, this is unrealistic and undesirable, and would put un-necessary cost pressures onto already struggling UK households. The party wants businesses to shoulder the burden, seemingly without understanding that businesses pass their costs onto their customers. They will “hold businesses to account for their role in tackling climate change” by:
- Introducing a general duty of care for the environment.
- Requiring all large companies listed on UK stock exchanges to set targets consistent with achieving the net zero goal, and to report on their progress.
- Regulating financial services to encourage climate-friendly investments, including requiring pension funds and managers to show that their portfolio investments are consistent with the Paris Agreement, and creating new powers for regulators to act if banks and other investors are not managing climate risks properly.
Apparently, they have not noticed the significant under-performance of ESG funds in the past couple of years.
At the same time, the part wants to help British industry to cut emissions by:
- Setting out a clear and stable roadmap to net zero, “repairing the damage done by Conservative U-turns” and giving businesses the confidence to invest.
- Expanding the market for climate-friendly products and services with steadily higher criteria in public procurement policy.
- Implementing the Carbon Border Adjustment Mechanism (“CBAM”) for high-emission products, protecting UK businesses from unfair competition.
- Reducing emissions from industrial processes by supporting carbon capture and storage and new low-carbon processes for cement and steel production.
- Providing more advice to companies on cutting emissions, supporting the development of regional industrial clusters for zero-carbon innovation and increasing the Industrial Energy Transformation Fund.
There is a long list of aspirations all of which are easy to say, but not easy to do, and there is no detail about how these things will be achieved. Many of the proposals would create significant additional costs for businesses, particularly in relation to creating a “duty of care for the environment”. A CBAM would certainly be inflationary, and it remains to be seen how strong the EU’s commitment to its own scheme will be once those effects begin to materialise.
At the same time as complaining about the impact of energy costs, the Lib Dems are proposing a great many policies that would drive costs higher. They hope that new technologies such as hydrogen and carbon capture will save the day, but progress, particularly on the latter, does not support these ambitions.
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The Liberal Democrat energy policy is fanciful, so it’s just as well the party has little chance of entering government. There is little understanding of the realities of the energy markets and the global supply chains supporting them. There is a naïve belief that some rich “bad guys” such as oil companies and large energy suppliers can somehow be forced to pay so that households in particular can benefit from low prices when buying energy and higher prices when selling it. Somehow these companies will avoid passing on the associated additional costs to their customers, and policies such as the CBAM will magically not be inflationary.
The Liberal Democrat manifesto lacks credibility in its energy policies – the magical thinking set out in its pages has no place in government. Which may be why Ed Davey is spending his time throwing himself off things, because that is also my inclination having read this manifesto.
Kathryn Porter for Energy Minister! A brilliant Trilogy of Energy doom. Why do those in power never listen to those in the industry and instead penalise them?
Part of it is that they do listen but the wind and green lobbies have been very loud in recent years. Those of us who have been urging caution were delivering a message they didn’t want to hear so it was harder to gain traction. The Conservatives started to wake up – maybe in power, Labour would do the same when they realise that developers won’t build more wind without higher prices and that they actually can’t do a lot about grid connections because supply chain and workforce constraints are intractable. At least Labour has moved to supporting nuclear unambivalently which has not always been the case in the past
Thank you for this illuminating series of posts, Kathryn. Illuminating the superficiality of our political leaders.
Probably the only manifesto worth evaluating because it is fundamentally different and proposes to stop pursuing unachievable unicorn net zero aspirations is Reform’s. It is, however, still somewhat sketchy – perhaps because trying to implement it would entail upsetting a lot of quangocrats and journalists – and perhaps because it hasn’t been quite carefully enough thought through.
Cut fuel duty by 20ppl – is a major tax revenue cost of around £8bn
Remove energy VAT – 5% on domestic bills, 20% on business bills
Remove environmental taxes – approx £3bn
Scrap £10bn of renewables subsidies by equivalent taxes. I’m not sure how well this works given the QCiL compensation clauses in CFD contracts and other protections on ROCs and FiTs. I suspect that they will need a far more subtle approach that involves careful restructure of electricity markets and charging for network access. Part of the problem here is that in normal market conditions a good chunk of the subsidies are essential to prevent most renewables projects from simply going bankrupt, which would create a big hole in generation that would need to be filled urgently – and yet the risks from instability in government energy policy might make it difficult to persuade the industry to build out sufficient CCGT rapidly – itself not a trivial task. Much easier of course is to halt any further CFD rounds, including for such things as hydrogen, carbon capture etc. to force investment to be much more market responsive.
Scrap Net Zero – comes with a lot of quango baggage that has to be scrapped, along with its enabling legislation and resiling external commitments, and probably a need for wholesale replacement of personnel in DESNZ, OFGEM, ONR, and the bits of NGESO that provide the future policy direction via FES etc. The benefits accrue to energy consumers rather than directly to government, although a lower cost energy system would lead to a stronger economy which should generate more taxes and reduce the need for government spending on welfare etc. It is essential for a saner future energy policy, but execution would be tricky, with the unwind carefully planned so as not to get caught up in judicial review etc. A simpler step would be to override the CCC and set an emissions target that is already comfortably exceeded. Then pack the CCC with sceptics to reinforce the decision. The real key is to ensure that quangos return to operating in consumer interest in low cost, reliable energy supply, which will require a change of management, organisation, mindset and objectives.
Start fast-track licences of North Sea gas and oil.
Grant shale gas licences on test sites for 2 years.
Enable major production when safety is proven,
with local compensation schemes.
There would need to be legislation to stop the kind of protests mounted at Preston New Road (some of which appears to have been financed by foreign powers). It will be interesting to see to what extent there is organised protest against onshore wind, solar, BESS and pylons under Labour, and what they do about it. The underlying idea is sound: we should develop our own resources. The principle of compensation needs to be informed by the work of Elinor Ostrom https://www.nobelprize.org/prizes/economic-sciences/2009/ostrom/facts/
Fast-track clean nuclear energy with new Small
Modular Reactors, built in Britain. Increase and
incentivise ethical UK lithium mining for electric
batteries, combined cycle gas turbines, clean
synthetic fuel, tidal power and explore clean
coal mining.
They could do with reading this blog about nuclear. Whether Cornish lithium works remains to be seen: it seems to have gone quiet, with the Chinese eyeing up ownership. Clean synthetic fuel and tidal power are just out of the green playbook: both need subjecting to market reality. Shell has just slow burnered its bioavtur project in the Netherlands – that is reality. Modern automated coal mining is clearly a area that could be developed, as the Cumbrian project illustrates. It would make sense to include HELE coal generation.
Nothing on insulation and improving the housing stock. Again, they should read this blog for sound advice.
The British taxpayer needs to be in control of
Britain’s utilities. Launch a new model that
brings 50% of each utility into public ownership.
The other 50% would be owned by UK pension
funds, benefiting from new expertise and better
management. We will ensure standing charges are
capped to help low users and pensioners.
It is really hard to see what (partial) nationalisation brings to the party except a very big bill and the prospect of bad management. Utilities are already micro-managed through regulators – but ones whose objectives are completely misaligned with what the nation needs. Net Zero, DEI, ESG are not going to deliver low cost utilities. It is the regulators that need reform. Companies will rapidly adapt when encouraged to provide in consumer interests rather than in the interests of green billionaires. Replace the subsidy begging bowl with market forces and we will get somewhere: it happened before, and can happen again.
In short, the Reform “contract” has not yet been thought through (at least what has been publicly presented), even if the some of the underlying ideas are right. It is still very much work in progress, with too much based on what is reported to play well with voters, rather than working out and explaining what is really in their interest, and what needs to be done to achieve it.
It is ridiculous sophistry to condemn proposals to upgrade minimum energy performance certificates for buildings because doing so is being described as” energy efficiency”, rather than the” heating costs” that you claim they measure.
But EPCs do also include lighting costs within their calculations. Together these services are responsible for the vast majority of current energy usage in buildings.
So, precisely why are you making such a fuss about such an utterly sensible and uncontroversial mechanism?
I suggest you read Kathryn’s excellent three part dissection of EPCs that starts here
https://watt-logic.com/2021/01/27/building-energy-performance-epc/
It is not a sensible mechanism at all.
It’s not uncontroversial. A house with broken double glazed windows has a better EPC than an otherwise identical house with perfect single glazed windows. That is plainly nonsense as the first house would cost more to heat. Studies have shown the EPC is highly subjective with different assessors giving wildly different scores for the same house. Features are ignored if they cannot be seen so I was advised to install under-floor isulation when I already had. Invoices and even photos were not enough to persuade the assessor to credit it.
Nothing at all is measured. The methodology makes assumptios based on what is considered to be the original construction method. Some elements such as lights and windows that have been changed are credited, but tf measurement means that the EPC can be a very poor indicator of the actual costs of heating a home. My own home (case study in the link from IDAU above) demonstrates the way my EPc declined from a D to an F despite home improvements. I have not used the central heating at all in the past two years, so the EPC is clearly a very poor indicator of the cost of heating my home.
Anyone who has looked into what the EPC actually is and how it works understands it is in urgent need of reform.
Hi Kathryn…can’t believe the briefing teams supporting ministers are so out of touch with sound engineering science, thanks goodness for Watt-Logic.
Your excellent analysis of each of the main parties manifesto is a welcome relief from all the inaccurate rubbish being fed to the electorate. I have viewed all the live debates & hustings of late & offer my take as a member of the electorate. How is it possible that electricity from a non carbon source that has provided heating for 1 in 5 UK homes over the past 30 years hardly figure’s in the discussions ? So much emphasis on transition from fossil fuels to renewables plus a few sound bites re SMR’s. But nothing relating to big nuclear plants currently delivering in silence 24/7/365 whatever the weather.
Labour state they have the answer with Great British Energy. IMO an empty can with no substance other than a new headquarters somewhere in Scotland. Surprised that the conservatives haven’t responded with their good work over the past 2 years, something thats actually happening.
The purchase of land on existing sites as the nuclear fleet runs down, Heysham, Hartlepool, etc. for the development of SMR’s. I personally think Heysham 3 should be AP1000’s or Korean APR1400’S.
Ownership of the Sellafield multifunctional nuclear waste facility supporting the amazing work being done there with high-level waste. Maybe government ownership suggest re-nationalisation hence the low profile.
Hi Kathryn…can’t believe the briefing teams supporting ministers are so out of touch with sound engineering science, thanks goodness for Watt-Logic.
Your excellent analysis of each of the main parties manifesto is a welcome relief from all the inaccurate rubbish being fed to the electorate. I have viewed all the live debates & hustings of late & offer my take as a member of the electorate. How is it possible that electricity from a non carbon source that has provided heating for 1 in 5 UK homes over the past 30 years hardly figure’s in the discussions ? So much emphasis on transition from fossil fuels to renewables plus a few sound bites re SMR’s. But nothing relating to big nuclear plants currently delivering in silence 24/7/365 unaffected by the weather.
Labour state they have the answer with Great British Energy. IMO an empty can with no substance other than a new headquarters somewhere in Scotland. Surprised that the conservatives haven’t responded with their good work over the past 2 years, something thats actually happening.
The purchase of land on existing sites as the nuclear fleet runs down, Heysham, Hartlepool, etc. for the development of SMR’s. I personally think Heysham 3 should be AP1000’s or Korean APR1400’S.
Ownership of the Sellafield multifunctional nuclear waste facility supporting the amazing work being done there with the 3% high-level waste. Maybe government ownership suggest re-nationalisation hence the low profile.
Barry Wright, Lancashire.
Hi all….Sincere apologises for my duplicate reply posting.
Barry Wright.
For EPCs, I am surprised that they were even invented. There used to be a really easy way to see how well insulated a property is, by just asking how much gas it uses per annum to heat the thing (or electric), either as Direct Debit amount per month, or kwh per annum.
EPCs, another bit of red tape for politicians to say “look what we have done”, but just adds to the costs. Is there any wonder that productivity is decreasing or not increasing if they are adding supposed environmental measures, that involve someone driving around between properties to assess them, adding to the emissions created by the country, when there is a really easy measure that can be used in the gas or electricity bills.
Hi….great summary. I’ve lived like millions of others in terraced, semi detached, detached 1930’s builds with clay tile roofs, believe me insulating such properties is extremely limited. Loft insulation yes, double glazing yes.
Cavity wall insulation maybe. Over the years I had several camera surveys in properties revealing non uniform cavities often filled with rubbish, builders weren’t that tidy back then, a no-go for me.
Under floor insulation, a nightmare, gas, water, electricity cables already occupied the limited space. I was always disappointed with the outcome of installing insulation to older properties.
Several members of family are currently wrestling with similar projects, serious money pits due to increased cost of labour/materials.
Moving on to the past 4 years I’m finally enjoying the benefits of new build, the only solution IMO.
Generous wall insulation, triple solar glazing, ventilation via air exchange unit irrespective of open or closed windows operating 24/7 silently, radiation, all electric heating/cooking.
Very low running cost, I’m not frugal & like 20 degrees C throughout the 1100 sq. ft apartment directly on the sea front. Heating hasn’t kicked in since early March, sure solar gain is playing its part.
Finally I realise an apartment is somewhat different to a house but he basics remain the same for a good well constructed new build; Insulation, ventilation, radiation, the priority.
Barry Wright, Lancashire.
Apologies for only getting round to read these three articles now, post-election, Kathryn. Outstanding work! I wish everyone working in the energy sector read your articles.