Reflections from the New Statesman Energy & Climate Change Conference
Tuesday’s New Statesman Energy and Climate Change Conference brought together policymakers, industry and investors to take stock of the UK’s progress on net zero and crucially, what comes next.
The conversation has clearly shifted. The question is no longer why we need to decarbonise but how we deliver it in a way that is affordable, secure and politically sustainable.
The argument has shifted
Firstly, there is still broad agreement across industry and much of politics that net zero is necessary. What has changed is how that case is being made. The conversation is now grounded in lower bills, security and resilience, rather than purely environmental outcomes.
That shift reflects both external pressures and political reality. Recent global instability has brought energy security back into focus, while the cost of living continues to shape how policy is received. Support for the transition is still there, with around 64% of people backing net zero (which, as one panellist put it, is higher than Beyoncé’s approval rating), but it is increasingly conditional. There is little tolerance for policies that are seen to add cost without clear, short-term benefits, and there is a risk that the sector assumes the argument has been won.
At the same time, there is a communications gap. The UK is already over halfway to net zero, yet this progress is not widely understood. The sector has been more effective at communicating ambition than outcomes, and that imbalance is beginning to matter.
The system, not just supply, is now the constraint
There was a strong sense that the UK has moved beyond early-stage deployment of renewables and is now confronting a more complex phase of system transformation.
The constraint is no longer just generation capacity – it is how the system functions as a whole. Grid infrastructure, flexibility, storage and demand management are now central to the conversation. Electrification is widely accepted as the direction of travel but integrating it effectively is a different challenge altogether.
In that context, some of the most interesting discussions were not about building more, but about using what we already have more intelligently. Estimates suggest that improving demand-side flexibility alone could deliver savings of up to £5 billion, by aligning consumption with periods of low-cost renewable generation.
Costs, crisis and economic reality
Unsurprisingly, energy bills dominated much of the debate. Households are facing potential increases of up to £332 later this year, while overall energy debt has reached around £5.5 billion, exceeding levels seen during the 2022 crisis.
That crisis also provided an important benchmark. The total economic cost of the 2022 energy shock has been compared to the estimated cost of achieving net zero by 2050. It is a stark reminder that the cost of inaction can be just as significant as the cost of transition.
At the same time, the fiscal context has changed. Government debt is higher, as are borrowing costs and there is less capacity for large-scale universal interventions. This places greater emphasis on more targeted support, structural reform and long-term system change.
‘The Warm Homes Plan’
One of the panel discussions focused on ‘The Warm Homes Plan’, which was announced in January by DESNZ and aims to deliver five million home upgrades by 2030, supporting around 180,000 jobs in the process.
Poor housing conditions are estimated to cost the NHS around £1.4 billion per year, highlighting the wider economic case for investment.
However, delivery will be complex. Upfront costs remain a barrier, even with support mechanisms such as grants and low-interest loans. The Government has committed £5 billion of a £15 billion package to support low-income households, but scaling this effectively will require clear delivery mechanisms and consumer confidence.
Recent experience has also underlined the importance of getting it right first time. Issues with fraud and poor-quality retrofit work – with over £40 million reportedly lost due to this – have reinforced the need for stronger consumer protections.
Encouragingly, demand is increasing. Following recent geopolitical tensions, some suppliers like Octopus Energy have seen a more than 50% increase in demand by homeowners for technologies such as solar panels, batteries and heat pumps. The challenge now is sustaining and scaling that momentum.
Nature, infrastructure and competing priorities
One of the panels focused on how a nature-first approach can help accelerate national growth. There’s been a sway towards positioning nature as a form of infrastructure in its own right. However, this feels like an area where policy ambition is perhaps ahead of delivery. The UK is still struggling to meet its environmental targets and there are obvious questions about how competing land uses will be balanced in practice.
What is clear is that nature is becoming more embedded in infrastructure and energy discussions. Less clear is how those priorities will be reconciled when tensions arise.
Certainty, clarity and consistency remain critical
Finally, across the discussions the need for clarity, consistency and long-term direction came through strongly. Investment appetite is not the issue. The challenge is creating a stable and predictable framework. This applies across multiple areas, from energy market reform to planning policy and environmental regulation. Without clarity, there is a risk that projects are delayed, costs increase or investment is redirected elsewhere.
There is also a need for greater co-ordination. Different parts of the system and Government itself are not always aligned and that becomes more apparent as projects move from strategy into delivery.
Conclusion: A new phase of the transition?
If the past decade was about establishing direction, the next will be about managing complexity. The UK is attempting to deliver a large-scale transformation of its energy system while balancing affordability, security and environmental ambition.
There is still optimism in the sector, supported by strong policy intent and growing demand for low-carbon solutions. But it is a more measured optimism, shaped by the realities of delivery and the focus will be on how effectively infrastructure is integrated, financed and communicated in a changing political and economic context.