We can supercharge growth through clean energy, but the power grid holds the key

The government has clear objectives – grow the UK economy and achieve clean power by 2030. Can it do both? The answer is yes.   

Clean energy and the grid infrastructure needed can be an engine for UK growth. The Spending Review is an opportunity to consolidate enormous progress and build on the UK’s strong global leadership and ambition. This can be done by removing remaining barriers to investment by focussing on certainty, supply chains, and skills.  

 The shift towards renewables undoubtedly represents a huge opportunity for the UK. Upgrading the grid alone will need £112 billion of investment by 2035, according to the National Energy System Operator. Between 2030 – 2035 alone the grid is expected to create 20,000 new jobs every year and boost the UK economy by £15 billion in parts of the country that need it most.  

The wider energy transition could create up to 725,000 new jobs by 2030, according to the Climate Change Committee. The power industry alone is forecast to employ nearly 300,000 people in the same period. 

Clearly, the opportunities are vast. But it won’t be easy. 

At Hitachi Energy, we are already investing $6bn worldwide to scale up our manufacturing to deliver critical infrastructure for the energy transition, such as transformers, HVDC connections, and high voltage products. It is part of my job to make the case for investing in the UK and enable the UK to grasp the opportunity of this century.  

To achieve Clean Power by 2030 – and make the most of the 21st century’s growth opportunity – we need the government to focus on certainty, supply chains, and skills. That is, ensuring long-term certainty for businesses looking to invest, building up local supply chains, and ensuring we have the right skills and people to deliver critical energy projects.  

Business needs certainty. Now is not the time to introduce lots of changes. We need to maintain investor confidence and zonal pricing plus delays to the auction round (AR7) risks pushing investment to other markets. Zonal pricing in particular risks undoing progress the government has made on energy policy - Clean Power 30, doubling onshore wind, tripling solar, reforming the grid connection queue, planning reforms, and spatial planning must be applauded. 

Similarly, the introduction of GB Energy and the £300m investment to strengthen domestic supply chains for offshore wind signify a government that wants to grasp the opportunity of the clean energy transition. We now need to attract investment in two areas – investment from developers and transmission operators into projects and investment from the supply chain into local markets.  

Long-term planning from the government - through the Strategic Spatial Energy Plan (SSEP) and the Centralised Strategic Network Plan (CSNP) – is a step in the right direction and an attractive environment that will ensure certainty for the supply chain is achievable.  

This is important in an increasingly competitive global market. Ultimately, business needs confidence which allows them time to build up local supply chains using locally sourced equipment, services, and people. This confidence stems from a clear pipeline of projects and a real commitment and laser focus on delivery. For example, having clear sight of the number of transformers needed  - a critical component of energy infrastructure.  

Finally, skills are critical. We need the right skills and number of people to deliver critical energy projects.  While the number of new jobs is an opportunity, we need to fill these positions. This means close collaboration between government, electricity companies, institutions, educators, and all actors along the supply chain.  

Government can also help to create the workforce of tomorrow by supporting sector-wide training and an apprenticeship levy. At Hitachi Energy we are already expanding and aim to employ over 1,000 in the UK by 2027 but it is not easy.   

As the UK races towards 2030, the government must keep the road clear of blockages by maintaining certainty, building out supply chains, and supporting the skills of tomorrow. The Spending Review presents a prime opportunity for this.