Stay informed with free updates
Simply log in to UK Energy myFT Digest – delivered straight to your inbox.
The writer was CEO of the BP Group from 1995-2007. He sits in the House of Lords as a cross-bench peer
A key test for the parties competing in this UK election is whether they have serious plans to transition the country to green energy. What will they do to combat climate change and its existential threat of famine and mass migration?
All such plans must ensure secure energy supplies while reducing greenhouse gas emissions and containing costs. The best recent estimate is that this will require an investment of around $3.5 trillion annually globally. This will only be acceptable if we can ensure a just energy transition, both globally and nationally. That’s why investments in science and technology that eliminate emissions at low cost are so important. And this is where the UK and the next government can have a disproportionate global impact if they make the right decisions.
We may be the source of a little more than 1 percent of the world’s emissions, but we’ve long been a melting pot of ideas for producing and consuming energy in new ways. A renewed commitment to research and funding in several areas with huge potential, such as energy storage technologies and artificial intelligence-based electricity delivery systems, would be the best way for policymakers to use resources that are currently scattered in a mass of unfocused activities.
Some methods of reducing global emissions, such as wind and solar power, are already expanding rapidly thanks to dramatic cost reductions. The aspiration adopted at COP28 to triple renewable energy capacity over the next six years is a good start, but not enough. The next step must be to ensure long-term storage of all electricity at grid level. Electricity currently covers a fifth of the UK’s final energy demand; our goal should be to double it within ten years and show others what can be done.
The next government can also lead by example by underpinning some of the empty rhetoric that is all too often mistaken for climate policy.
We have to be realistic. The energy transition will be slower than many would like; we will need oil and gas for many years to come. Where we have previously licensed or are already working in existing UK industries, we should continue. This represents an important source of energy that needs to be produced and consumed in a responsible manner.
But other than that, we should stop. Such a move will strengthen our intention to break even and show timely leadership. It is also hard to believe that finding and developing the very limited oil and gas resources that remain will be economical – or cost less – than buying supplies from the world market when needed. The future of the North Sea and the jobs and communities it supports lies not just in oil and gas, but in the clean technologies that will power our future.
Energy security is important, but the next government must recognize that it does not depend on the UK being self-sufficient. We will continue to need imported oil and gas. The real key to security is to ensure we have diverse sources of supply and to continually reduce imports by developing our own low carbon alternatives.
Policymakers should also ensure that revenue from remaining oil and gas production on the UK continental shelf is used to speed up the transition. This means more investment in wind and solar power and in the infrastructure, including long-term storage, that can bring these supplies to market. We also need more investment and research into efficient carbon dioxide removal; as well as advanced nuclear fission and fusion; and the development of green hydrogen for fertilizer production and became a source of industrial heat.
The green transition is also about the demand side of the economy. So we will also need investment in improving the way electricity is distributed and used, whether in homes, data centers, factories or transport.
All this requires money. As public spending or borrowing is inevitably limited, private investment will be essential. Incentives such as targeted capital contributions will help. The next government should also consider what we do with our oil and gas infrastructure: the cost of decommissioning it has been estimated at £40bn, with half due over the next 10 years.
The pipeline and platform removal schedule was never fixed. There is no precise definition of “decommissioning” either. New low-carbon developments in the North Sea could allow some facilities to be redesigned. Others could be left in place, freeing up both public and private capital for more productive uses.
Achieving net zero in the UK by 2050, and ideally sooner, will not be easy. But with pragmatism, a spirit of rational optimism and a willingness to work together across the public and private sectors, we can achieve it. Both parties must take this seriously. The difficult choices we face cannot be left to market forces alone.