With net-zero businesses growing NINE times faster than the rest, UK economy needs clean energy

Net zero-related businesses and industries grew by 9 per cent last year, compared to barely 1 per cent of GDP growth across the economy as a whole

At a moment when the world is gripped by uncertainty, it is positive to see energy ministers from around the globe gather in the UK this week to discuss how we secure affordable, reliable and safe supplies of energy to meet our collective needs.

It is right that the UK Government, which is co-hosting a two-day energy security summit with the International Energy Agency, is leading these talks. Energy – where it comes from and how we pay for it – is front of mind, with the UK more exposed than many to volatile, global gas prices.

Since Russia’s invasion of Ukraine, our high dependency on expensive gas supplies has seen millions of households struggle to afford to heat their homes. It is impacting on the profitability of UK businesses, including strategically important industries, such as steel making, as the recent crisis involving British Steel in Scunthorpe has shown.

Climate Change and Net Zero Secretary Ed Miliband speaks at the Future of Energy Security Summit, hosted by the International Energy Agency and UK Government in London (Picture: Justin Tallis) | POOL/AFP via Getty Images

Clean energy superpower

In short, the energy transition away from global fossil fuels is foundational to our wellbeing and the economy – which is why the UK Government is correct in its mission to make our country a clean energy superpower.

UK businesses understand this and back the shift to homegrown, renewable energy by a large margin. Recent polling shows that more than 80 per cent of Scottish business leaders are in favour of the government’s plans to end the role that fossil fuels play in generating the UK’s energy, citing reduced energy costs and a more reliable energy supply as the key benefits. Nearly half of Scottish businesses polled would like the government to move faster than it currently is.

And it is not just business, with surveys showing that the UK public overwhelmingly supports a rapid transition away from fossil fuels through the build-out of more renewable energy. For many, this goes beyond climate concern and is seen as central to our energy security and independence.

North Sea’s reserves are running out

This is why the recent heightened politicisation of the drive to net-zero carbon emissions by some politicians is so frustrating. It is not a reflection of what households facing high energy bills, or those trying to run a business, want, which is a more affordable, stable and safe supply of energy that is not subject to the actions of authoritarian foreign governments or the profiteering of oil and gas companies.

In recent weeks, many arguments have been put forward as to why the UK Government should retreat from its clean energy mission. The more extreme voices have argued that America’s retreat on climate action and its enthusiasm for oil and gas are reasons for the UK not to bother.

All of which is nonsense. The UK is not America. After 60 years of drilling, most of the North Sea’s reserves have been extracted. The government cannot meaningfully boost production in a mature, expensive basin without giving eye-watering tax breaks to oil and gas companies.

This is backed up by official projections: approving new gas fields will only make us 3 per cent less reliant on imports than if we didn’t approve any new projects. Some 80 per cent of UK oil is put in tankers and exported overseas, and the price we pay for both oil and gas is set on global markets. The truth is that, for as long as we are dependent on fossil fuels, we will be dependent on imports with prices we can’t control.

Reviving British industry

Our current emissions may be small by comparison to the US, but the UK has a big role to play in leading and supporting other countries to take action to tackle climate change. The UK has always had an outsized role on the global stage and that is especially so when it comes to climate action. Of this, we should be proud.

But anyone paying attention knows that the UK Government’s clean energy plan is not just about cutting emissions to tackle the climate crisis: it is also about boosting the economy and reviving industry. Last year alone, net zero-related businesses and industries grew by 9 per cent compared to barely 1 per cent of GDP growth across the economy as a whole.

This transition is about making sure that we all benefit from having an affordable, reliable supply of energy. In Scotland, in particular, it is critical that this also means the creation of enough good new jobs to replace those already being lost in oil and gas because of the geology of the North Sea. Jobs supported by the industry have more than halved in the past decade as the basin has declined.

Populists’ empty promises

Here the UK Government needs to do more – through targeted investment and incentives – to make sure jobs are created in the areas of the UK that need them the most, like Aberdeen and Grangemouth. For the sake of workers and communities in the UK’s industrial heartlands, we cannot allow the empty promises and anti-net zero attacks of populists, which are designed to slow the transition, to win this fight.

As global instability reshapes how countries think about their economies and energy futures, and our climate heats up, the choices we make now are critical. Do we retreat from this future? Or do we bring down energy bills for good and create industries that can deliver jobs and prosperity for the long term?

Chris Skidmore is a former Conservative energy minister who led a high-level review into how the UK could achieve net-zero carbon emissions by 2050