Cut to the quick

Labour has four years left to deliver on its ambition to make Britain “a clean energy superpower.” There is no time to waste. The Reform and Conservative parties have identified net-zero as the villain behind the high cost of living. Voters will be more confident in Labour’s clean energy agenda if it lowers bills and creates jobs. Nuclear features heavily in the government’s budget, and could create 10,000 jobs during construction, but it cannot deliver lower bills in the next four years. Existing solutions can. As such, the government should rebalance its support to more short-term options to capture this opportunity. The UK’s high energy prices were a major 2024 election issue. Energy prices spiked after the Russian invasion of Ukraine, increasing domestic and industrial power prices by 80 per cent and 90 percent respectively from 2021 to 2023. British industrial energy prices remain the highest in the G7. Even before the war, analysts identified gas as the major culprit of rising energy costs, and renewable energy as the antidote.

Labour committed to change, initially planning £28bn of investment in the green economy during their first term. By February 2024, this pledge was slashed to £15bn, with just over half allocated specifically to energy. The government’s flagship energy policy was to create Great British (GB) Energy, an £8.3bn vehicle to invest in clean energy projects. Its design and mandate before the election was vague, though it hoped to fund projects at a lower capital cost than the private sector, generate profits for taxpayers, and stimulate local jobs. It was unclear whether it could actually reduce costs because it did not deal with key bottlenecks like planning, risked crowding out private investment in traditional renewable technologies, and did not address major components of energy bills like transmission, distribution, supply, taxes, and subsidies. One year on, GB Energy has not yet gained momentum. It has already lost 30 per cent of its funding since its launch, with £2.5bn reallocated to the nuclear industry. It was styled as a state-owned investor, but its first transaction was a £110m grant program to buy solar panels. This generates savings for schools and the NHS but does not showcase GB Energy’s deal-making capabilities. GB Energy’s focus on smaller community projects might make its work visible at a local level, but it is unlikely to meaningfully impact bills. Meanwhile, GB Energy’s mandate to invest in energy supply chains and nascent technologies could benefit local manufacturing and industry without offering any short- or medium-term savings to consumers. In parallel, the government has made a big bet on nuclear: more than seven times as much as the commitment to GB Energy. As of July 2025, the government had pledged over£45bn to nuclear in the form of grants, equity, and debt. This includes a tender for the first small modular reactors (SMRs)in the UK (£2.5bn, reallocated from GB Energy), the Sizewell C power plant (£40.35bn )and nuclear fusion research (£2.5bn).

While nuclear may be necessary to diversify the UK’s energy mix and improve energy security, it cannot deliver cost savings in time for the next election. Sizewell Will bring an additional 3.2 gigawatts of capacity online, enough to power six million homes, but not until the mid 2030s at the earliest. It will add £12 per year to every energy bill until construction is finished, and its eventual cost per unit is not yet known. For comparison, the government’s investment could fund at least twenty-four times as much solar capacity, and almost ten times as much onshore wind, with far shorter construction times. Nuclear fusion, similarly, has long been the holy grail of unlimited clean energy, but is not expected to lead toa viable project within the next 25 years. SMRs are touted as the cheaper, quicker alternative to large scale projects, yet so far only a couple of commercial projects have been commissioned. The government is unlikely to deliver any nuclear projects, let alone accompanying cost savings, before the next election.

If the government wants to win support for Britain’s clean energy future, it will need to make more near-term bets. Solar, wind, and battery projects in the UK have shorter development and construction times than nuclear: as low as two years for solar and batteries and four years for onshore wind. The private sector is willing to fund these projects, but grid connections have historically delayed their progress by five years on average. If these projects could be guaranteed grid connections, they could start delivering cheaper energy. The government needs to continue progressing on less visible reforms to grid planning and ensure grid upgrades are funded from private and public sources.

Reusing undervalued regional assets like shuttered power plants could partially help to reduce the pressure on grid connections. The land from former coal plants could be remediated and converted to clean energy, making use of existing infrastructure. Some plants have already been converted from coal to gas, others to biofuels, but conversion to cheaper renewable energy sources has lagged. The most famous conversion, Drax, will cost the government over £10bn in subsidies from 2015 to 2026.

The Aberthaw power plant could be a blueprint for such redevelopments. The Cardiff Capital Region is funding the demolition and remediation of this former coal plant and taking advantage of its strategic location to create a sustainability hub. Long-term bets on tidal power offshore from the site can be complemented with lower-risk investments in batteries and solar that could generate jobs and income for the community within just a few years. The site could also host other infrastructure like data centres, heat networks, and EV charging. The UK government could help to kickstart development at similar sites.

Another novel approach is to use software and hardware in homes and businesses to optimise energy consumption. A government mandate has ensured66 per cent of UK’s electricity and gas meters are ‘smart’, yet the benefits of this technology have not yet been realised. Smart meters can save people money by helping them to shift consumption to the cheapest times of day, but most electricity plans in the UK do not offer a dynamic pricing option. Octopus Energy offers lower electric vehicle (EV) tariffs for charging at the cheapest times of day. It has also piloted a product which pays customers to turn off their EV chargers at times when the electricity grid is constrained. These innovations could be extended beyond EVs; in the future, we could even see two-way electricity flows, enabling EVs and home batteries to charge up during periods of high renewable electricity production and then supply power back to the grid when needed. The government could play a role in supporting pilot programs and their scale-up, or even mandating that providers offer flexible pricing options.

Wind, solar, and batteries are less expensive and faster to deploy than nuclear power. Approaches like reusing existing assets and complementing investments with optimisation software could also give clean power an extra boost to deliver savings in the next few years. Labour cannot afford to wait until the mid-2030s to show progress on bringing down energy bills. Placing too much faith, and funding, in nuclear energy and other long term technology investments risks costing Labour the next election.

Image credit: Ben slash via flickr