The pre-election period: a sensitive time for the energy transition

Shortly after Rishi Sunak’s surprise announcement that the General Election will be held on 4 July 2024, the Government and civil service entered the “pre-election period of sensitivity”, colloquially referred to as “purdah”. As a result, Government departments are required to limit making any new announcements or decisions that could influence voters, and, by convention, Ministers should observe discretion in initiating new policies with a long-term character, especially where an incoming administration may wish to take a different path. The Cabinet Office has guidance published here, governing the conduct of civil servants during this period.

With this in mind, there are a number of large-scale renewable energy infrastructure projects and regulatory changes which have been affected, given the long-term nature of these kinds of programmes and policies. Some matters have been abandoned, such as the proposed Offshore Petroleum Licensing Bill.

In this blog, we discuss what the pre-election sensitivity period may mean for several key energy transition projects and policies.

CCUS: Track 1 Clusters negotiations will proceed

The Government’s Carbon Capture, Usage and Storage (CCUS) cluster sequencing programme, led by the Department for Energy Security and Net Zero (DESNZ) is likely to be affected by the calling of the General Election. Key secondary legislation was passed in the wash-up before Parliament rose pre-election. This includes revenue support regulations for industrial carbon capture and carbon dioxide transportation and storage, which provide powers enabling the entry into contracts for the provision of operating support for these first-of-a-kind projects. However, amendments to the existing electricity supplier obligation levy to provide for payments under the Dispatchable Power Agreement for power generation using carbon capture and storage do not appear to have been laid and so will need to be brought before the next Parliament.

While Track-1 negotiations with the two initial CCUS clusters are expected to continue during the pre-election period as these are based on existing decisions, given the timetable for negotiations, it is likely to fall to the incoming minister taking office after the election to take final decision on the allocation of support for Track 1 projects. The clarification needed regarding the next steps for Track-2 of the cluster sequencing process is outstanding however, and may be delayed now until after the election. 

Hydrogen: allocation rounds 1 and 2 

Hydrogen allocation round (HAR) 1 and 2 are under way, set to award 125MW and up to 875MW respectively to electrolytic hydrogen production projects in the UK. Run by DESNZ, these processes are expected to continue despite the pre-election period of sensitivity as they are based on existing announcements. However, it remains to be seen if the timetable for signature of HAR1 low carbon hydrogen agreements and the shortlisting of HAR2 projects will be delayed by the intervening election.

Renewables: Contracts for Difference (CfD) allocation rounds expected to continue

With renewables CfD allocation round 6 (AR6) underway, National Grid Electricity System Operator, acting as the body in charge of the round, has highlighted that essential business which can include a CfD allocation round that is already open can continue, although “significant decisions and announcements about the round may be subject to the latest Cabinet Office advice on the election period”. Given the current timetable for AR6 and with non-qualification reviews underway, it remains unclear as to whether the election will delay AR6 which could in the ordinary course conclude at the latest in September this year.

In relation to CfD allocation round 7, which is set to open in 2025, the Contracts for Difference (Sustainable Industry Rewards) Regulations 2024 were made on 23 May 2024 as part of the wash-up. This amends CfD secondary legislation to enable the introduction of Sustainable Industry Rewards which are now likely to form part of the award process next year.

Planning decisions for Nationally Significant Infrastructure Projects paused

As a result of the General Election being called, the Planning Inspectorate has paused development consent decisions, with a number of referrals to Ministers sitting in inboxes awaiting consideration. These include several offshore wind projects, interconnector schemes and large-scale solar farms. For example, Energy Secretary Claire Coutinho had previously said a decision on the Mallard Solar Pass Farm would be made by 13 June, but this is now on hold.

UK Carbon Markets reform and Carbon Border Adjustment Mechanism (CBAM) work to continue

We expect the Government’s work on carbon pricing to continue during the pre-election period—including on UK Emission Trading Scheme (ETS) expansion and integration with greenhouse gas removals, as well as introducing a UK CBAM. The civil service will be aware that both major political parties have committed to accelerating the UK’s decarbonisation efforts and emphasised the role of green investment in the UK’s long-term economic growth and security. Expanded carbon pricing remains a crucial pillar for realising those outcomes. 

Yet, the next Government will face early decisions on its preferred policy approach, which will also affect incentives for scaling up energy transition technologies. With this, we expect the civil service to progress analytical work on carbon pricing, as a precursor to informing the next Government’s policies, in the lead up to the election.

This year’s General Election will be Britain’s first outside of the European Union and occurs in the shadow of global conflict which has threatened energy security and damaged many countries’ economic standards. The timing of the election means that significant decisions for the UK’s energy transition infrastructure projects and in the regulatory framework to enable net zero will fall on the new Government.