When the Labour Party came to power, nowhere was the immediate policy shift more stark than in terms of environmental policy. Under Sunak, drilling licenses in the North Sea had been extended, and while the Government had said all the right things in regards to environmental policy, the results were mixed. With Miliband now leading the charge in Government, to better reflect his priorities, his title has been changed from the traditional ‘Environment Secretary’ to ‘Secretary of State for Energy Security and Net Zero.’

Great British Energy had been discussed ahead of the election, and the statutory bill to enable its creation has now entered Parliament, where the purpose of the entity is to drive project investment and ownership, accelerate project development along with expand the use of Nuclear energy.

Now with COP 29 having finished, this has resulted in an agreement to provide $300bn/yr of public funds, up from $100bn/yr but much less than what the global south had stated was needed. ($1trn/yr.) Starmer has also committed UK to an emissions cut of 81% by 2035. However, the reality is that for the Miliband, is that whilst he can claim the moral high ground in being a leader in implementing environmental policies, outside of Europe, key players are not matching the UK and without a global commitment to reduce emissions, the impact of the UK will be negligible. For context, last year the rise in emissions globally, was greater than the UK total.

Similarly, global consumption of oil, gas and coal were all at record highs last year. Since 1990, fossil fuel consumption were up 68.9% and hydrocarbons still provide 76.5% of energy, down just 1.3%. Renewables growth are not keeping up with those of energy overall.

With the UK specifically, energy consumption is falling rapidly, (energy consumption has fallen by over 20% in 25 years) but the country still derives nearly three quarters of our energy from fossil fuels. Put simply, we are not transitioning away from fossil fuels in relative terms, we are just using less energy overall.

Meanwhile, the challenge of wind and solar energy is becoming clear. All it takes is a period of gloomy weather with no wind, and they generate little. Hence the UK runs a massive power deficit over winter (we import energy from the continent during this period) and the only obvious alternative ‘clean’ power source is nuclear. However, whilst at the start of the decade, the UK operated eight nuclear power stations (contributing about 16% of all electricity generation), seven are due to be de-commissioned by 2028-29, where simultaneously, electricity demand is projected to increase by over 30% in the next five years, driven by the electrification of heating and transport.

Therefore it is not a surprise that during COP29, the UK and US have signed an agreement to speed up the deployment of cutting edge nuclear technology, with the intention to support knowledge sharing on advanced nuclear technologies.

New technologies such as advanced modular reactors can help decarbonise heavy industry such as aviation fuel, hydrogen or advanced steel production, and are also smaller and can be made in factories, making them quicker and cheaper to build. This will support the commitment made last year at COP28 to triple nuclear energy capacity globally by 2050. The UK is now moving forward with its advanced nuclear reactor programme and Great British Nuclear’s small modular reactor competition, as well as continuing development of the Sizewell C project and the hope is that this can generate the power deficit as we wean ourselves off fossil fuels.

In the meantime, cleantech continues to lead the way in VC/PE funding and the gap is narrowing in the UK between cleantech and fintech, the current star sector for funding. In 2023, Cleantechs in the UK raised 2.3BN, compared to 10BN raised by FinTech’s, equally the gap is narrowing, and the Government’s commitment to it, which is in contrast to the Trump agenda (drill baby, drill) means the UK has a competitive window to become the global leader in Cleantech with Great British Energy the magnet. Wishful thinking? Maybe. But if this strategy pays off, then the UK will not only lead the way in rhetoric, but in VC funding, R&D and job creation too. The UK already has two of the global leading energy firms headquartered here and BP for example, are leading the way on producing green hydrogen.

If there is a fly in the ointment, it is the skill shortage in the UK, in that the country is not producing enough engineers and it is estimated that due to pending retirements, there will soon be a shortfall of up to 1 million engineers in the UK. Therefore either as a country we need to train more (approx. 8% of students study engineering in the UK, compared to 17% in Germany and 22% in Japan) or we will need to loosen immigration. Probably both.

In the meantime, engineering vacancies will continue to rise as more infrastructure projects are announced, and compensation is likely to increase faster than other areas too. Hence when looking at the engineering vacancies in the energy industry, whilst 2024 has seen a slight drop off compared to last year, activity is still set to be higher than both 2021 or 2022 and the forecast is for vacancies in 2025 to be the highest yet over the five year period.

A good time to be in engineering. Or an engineering recruiter.