Net zero realism is growing with the UK Government increasingly isolated

Energy News Beat

In the 9^th anniversary of the start of my blog, I’m feeling very encouraged by the growing net zero realism. I have long argued against current climate policies on the basis they are making energy more expensive and less secure, without any meaningful reductions in emissions. Both expensive energy and blackouts harm people – in my view it is illogical to create harm to lives and livelihoods in the name of trying to prevent harm to lives and livelihoods. Particularly when we are meeting net zero targets by off-shoring manufacturing to countries with dirtier energy, and incur additional shipping emissions, meaning global emissions increase while UK jobs are lost.

Net zero scepticism grows

Last year I commented that net zero scepticism was growing, and quoted then DESNZ Secretary of State, Claire Coutinho saying more gas-fired generation would be needed to keep the lights on:

“There are no two ways about it. Without gas backing up renewables, we face the genuine prospect of blackouts. Other countries in recent years have been so threatened by supply constraints that they have been forced back to coal. There are no easy solutions in energy, only trade-offs. If countries are forced to choose between clean energy and keeping citizens safe and warm, believe me they’ll choose to keep the lights on. We will not let ourselves be put in that position. And so, as we continue to move towards clean energy, we must be realistic,”
– Claire Coutinho, Secretary of State for Energy Security and Net Zero

While the Conservatives were pushed into Opposition at the July 2024 General Election, they have now gone further and abandoned the net zero target altogether. Conservative leader Kemi Badenock gave a speech, which I attended, in which she said…

“We are a wealthy country, but we are becoming weaker, through complacency. We are losing our resilience. We can’t make things like we used to; we don’t build as quickly. We are spending too much on debt, too much on welfare, and too little on defence…. We assumed that we would always be wealthy and focused on the status quo rather than the future….

… Let’s start by telling the truth on energy and net zero. Every single thing we do in our daily lives is dependent on cheap, abundant energy. When energy became cheap and abundant, living standards began to rise, health and life expectancy grew. Cheap, abundant energy is the foundation of civilisation as we know it today. We mess with it at our peril.

And that’s exactly what we’ve been doing for twenty years. And it’s now starting to cause real pain for everyday people and businesses. The cost of electricity – far too high – much higher than nearby and comparative countries with the real possibility of it going even higher with environmental levies. A big chunk of our existing bills are not direct energy costs.

People are struggling to pay businesses, especially manufacturing businesses are closing down, and there is no real plan for bringing costs down. That surely cannot hold. It’s fantasy politics. Built on nothing. Promising the earth. And costing it too.

As a society, we are – or we have been – trying to do two things at once. Keep energy costs down, whilst reducing our impact on the environment. These are both noble aims….

… We need a serious approach. We’ve got to stop pretending it’s simple. And we have got to stop government by press release announcements without a policy plan. Making promises and not delivering is exactly the reason that the political class has lost trust. The only way that we can regain it is to tell the unvarnished truth.

Net zero by 2050 is impossible,”
– Kemi Badenock, Leader of the Opposition

While the DESNZ Public Attitudes Tracker (Winter 2024) showed 80% of UK adults being very or fairly concerned about climate change, and 37% stating they were very concerned, they are less willing to make sacrifices to address their concerns. A YouGov survey noted a decline in public support for increased government spending on environmental issues – in January 2020, 37% of Britons prioritised environmental spending but by April 2025, this had dropped to 17%, with 29% believing it should be reduced.

A survey by British Gas in late 2024 revealed that Brits were almost four times more concerned about the cost of living than climate change, with 66% deterred from making home changes to combat climate change due to concern over cost and value for money. Despite more homeowners believing that it is important to install insulation in their home (67% of the public, an increase of 16% from 2022), the survey found that the public’s sense of urgency has declined. In 2023, 25% believed that improved insulation was essential but this declined to 16% in 2024. The survey also found that the public holds the national Government as most responsible for tackling climate change, followed by international bodies, such as the UN, and large businesses. This implies they see individual action and sacrifice as much less important.

With both the Conservatives and Reform rejecting the net zero target, the political consensus supporting climate action in the UK is now completely fractured.

New direction for energy in the US under the Trump Administration

In the past year there has also been a seismic change in the US. Joe Biden was replaced by a second term for Dolald Trump who immediately set about unwinding Biden era energy transition strategies, with a “drill, baby drill” ambition for oil and gas. On his first day in office he declared an “energy emergency”, a ban on offshore wind and withdrawal from the Paris Agreement.

The executive order Declaring a national energy emergency says: “The United States’ insufficient energy production, transportation, refining and generation constitutes an unusual and extraordinary threat to our Nation’s economy, national security, and foreign policy.

“In light of these findings, I hereby declare a national emergency.”

The order defines “energy” as “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.” Wind and solar energy were notably missing from the list. The order also says: “We need a reliable, diversified, and affordable supply of energy to drive our Nation’s manufacturing, transportation, agriculture, and defense industries, and to sustain the basics of modern life and military preparedness.”

New US Energy Secretary, Chris Wright has very clearly set out the limitations of the energy transition. In a speech on 10 March he said:

“Energy is the enabler of everything that we do. Everything. Energy is not A sector of the economy, it is the sector that enables every other sector. Energy is life. I’m honoured to play a role in reversing what I believe has been very poor direction in energy policy. The previous administration’s policy was focused myopically on climate change with people as simply collateral damage….

… Wind and solar, the darlings of the last administration and so much of the world today, supply roughly 3% of global primary energy. You often hear larger numbers quoted but that is because of a thermal equivalent scale-up. I don’t believe that scale-up is justified, hence I stick with the actual energy produced.”

He went on to highlight the importance of fossil fuels:

“Nitrogen fertilisers, synthesising natural gas is responsible for fully half of global food production. Natural gas is the largest source of home heating in the United States. It is central to the rapidly growing petrochemical industry and the largest supplier of processed heat for manufacturing steel, cement, countless metals, gypsum, semiconductors, polysilicon and thousands of other materials. Oh yes, and natural gas is also responsible for 43% of U.S. electricity.”

He promised that the Trump administration will be much more “scientific and mathematically literate” when considering climate change, saying previous energy policy created a “cure [that] was far more destructive than the disease”. He pointed out that “Making energy more expensive has impoverished citizens and displaced energy-intensive manufacturing, along with the well-paying blue-collar jobs. Expensive energy policies do not reduce demand for energy-intensive materials. They simply move where those products are produced and therefore who benefits from their production.”

“I find it sad and ironic that once mighty steel and petrochemical industries of the United Kingdom have been displaced to Asia, where the same products will be produced with higher greenhouse gas emissions, then loaded on a diesel-powered ship back to the United Kingdom. The net result is higher prices and fewer jobs for UK citizens, higher global greenhouse gas emissions, and all of this is a climate policy?”
– Chris Wright, US Energy Secretary

At the Alliance for Responsible Citizenship conference in London in February 2025, Wright labelled the UK’s net zero 2050 target as a “sinister goal,” arguing that its aggressive pursuit has imposed significant costs without delivering corresponding benefits. He went on the say that no-one will make energy-intensive products in the UK any more – this production has been moved elsewhere as the country de-industrialises in the face of high energy costs. “This is not energy transition. This is lunacy. This is impoverishing your own citizens in a delusion that this is somehow going to make the world a better place.” A position supported by the data which show a rapid decline in UK industrial energy demand despite population growth.

But not everyone is waking up to net zero realism

Sadly, not everyone has caught the new net zero realism. Here in the UK, the new Secretary of State for DESNZ is Ed Miliband, a dyed in the wool wind and solar zealot who claims high energy prices are down to “international gas prices” and it’s imperative we reduce out reliance on “dictators”. At the same time he is cosying up to the Chinese for wind and solar equipment and encouraged Labour MPs to vote to overturn a ban on forced labour, with the Government whipping its MPs to vote down an amendment that would prevent green energy materials being purchased by the government from supply chains relying on “modern slavery”.

Lord Alton of Liverpool tabled an amendment to the Great British Energy Bill to stop the newly formed state-owned GB Energy from buying solar panels, among other green equipment, from places where there is “credible evidence of modern slavery”. The Xinjiang of China region dominates solar supply chains, but is an area where more than 2.5 million people have been subjected to forced labour in detention camps. While the House of Lords voted in favour of Lord Alton’s amendment – by 175 to 125 votes – after being whipped, Labour ensured that the House of Commons voted by 314 to 198 to reject it. No Labour MPs voted against the Government although 92 abstained.

Since I began writing this blog, Ed Miliband has made a U-turn and is now proposing an new amendment to the Bill (rather than accepting the perfectly adequate Alton amendment) that WILL restrict GB Energy from purchasing green technology made with forced labour.

Unfortunately in the same week he announced that public money would be spent on experiments aimed at dimming the sun, which is a shame because he is also spending public money on installing solar panels in schools and hospitals, which will clearly work less well is the sun is less bright. As it is, the UK is the second worst place in the world for solar power after Ireland!

And Labour continues with its 78% tax rate on North Sea oil and gas, meaning we must rely more on imports.

In Europe energy policy continues to be a mess with EU net zero goals losing support

The EU remains deeply committed to climate leadership with its Fit for 55 package to cut emissions 55% by 2030 largely being implemented, the Net Zero Industry Act and REPowerEU aiming to boost renewables, clean technology, and energy independence since the start of the Ukraine war, and the Carbon Border Adjustment Mechanism (“CBAM”) officially entering its transitional phase in 2023, being phased in more fully over 2026–2034. The spirit of EU energy policy is still strongly decarbonisation-first, with energy security now a close second.

But there are major concerns in Germany de-industrialisation (“Industrieabwanderung”). German heavy industries including steel, chemicals and car-makers fear losing competitiveness due to high energy costs, green regulation, and carbon pricing. German politicians, even the Greens, now openly warn about high energy prices and pushing the public further than it wants to go on net zero. Four in ten industrial companies in Germany are considering cutting production in the country or relocating parts of their production outside Germany due to high energy and regulatory costs.

Climate change has become an increasingly contested issue in German politics, which is important since no EU de-carbonisation strategy would succeed without German participation. While the Christian Democratic Union of Germany (“CDU”), centre-left Social Democratic Party (“SPD”) and Green parties all support reaching net-zero by 2045, with interim targets including a 65% cut by 2030, their approaches differ. The Free Democratic Party (“FDP”) argues that the 2045 target should be pushed back to 2050, to line up with the wider EU target. Meanwhile, the manifesto of the Alternative for Germany (AfD) party repeatedly questioned the “supposed scientific consensus” on “man-made climate change”.

Home heating is also a major political issue in the wake of the 2023 Building Energy Act. The CDU, FDP and AfD all pledged to abolish it, while the Green party pledged to provide additional government support for households. Several German parties pushed back in the manifestos on the EU-wide ban on the sale of new petrol and diesel cars, a policy that has been repeatedly attacked in the country over recent years.

While there is general support for renewable energy in Germany, the roles of coal and nuclear power in the country’s electricity mix remain more fraught. The country currently has a phaseout date for coal power of 2038, a policy supported by the CDU and FDP, while the Greens and Left party (Die Linke) want to bring this forward to 2030. The AfD advocates building more coal power plants until new nuclear plants can be built. In its manifesto, the CDU suggested that it was open to revising nuclear power in the future.

As predicted in the polling, there was a political shift to the right during the election, with the centre-right CDU increasing its seats by 12 from the 2021 election, while the far-right AfD increased its seats by 69. Meanwhile, the SPD lost 86 seats and the Green party lost 33. This marked the best-ever result for AfD which secured approximately 20% of the vote, becoming the second-largest party. Despite this surge, mainstream parties, led by Friedrich Merz, have maintained a strict “firewall” policy, refusing to form coalitions with the AfD. Merz formed a “grand coalition” reminiscent of previous government configurations, in a move that has drawn criticism with some accusing Merz of ignoring the electorate’s desire for change.

Elsewhere, the European People’s Party (“EPP”) and other centre-right groups are increasingly warning that the CBAM will hurt EU industry if foreign competitors retaliate, or if the system raises input costs without enough transitional help. It has called for a “pause” or “review” of further green regulatory measures in the next Commission term (2024–2029). EU heavy industry has also expressed doubts about the scheme, and there are questions over compliance with WTO rules.

There are further signs of a breaking consensus within the EU on net zero. In August 2023, Poland filed multiple legal complaints with the Court of Justice of the European Union, challenging key components of the EU’s Fit for 55 package, including the Emissions Trading System (“ETS”) and the CBAM. Poland argued that these policies threaten its economy and energy security, particularly given its reliance on coal. So far the ECJ has not ruled on any of the complaints.

In further signs of net zero realism, the Czech PM has urged the EU to rethink climate goals given a possible lack of global support. Petr Fiala said in November: “Europe might need to reassess whether its current climate policy is the right approach. Europe cannot be expected to finance and carry out everything on its own.” The Czech automotive sector, a significant contributor to the nation’s GDP, has expressed apprehension over stringent EU emission reduction targets. Transport Minister Martin Kupka highlighted challenges in meeting the revised target of 94 grams/km, citing declining demand for electric vehicles. Kupka also said the country wants to assess the EU’s aim to ban combustion engine vehicles in 2035.

Even Italy has pushed back against EU climate policies. Italy’s Industry Minister Adolfo Urso told the country’s Parliament earlier this month, that he would ask the European Union to immediately suspend rules to slash European industry emissions in response to Donald Trump’s tariffs. In 2023, Italy pushed back against a major European Union directive aimed at improving the thermal efficiency of buildings, seeking to delay and offer exemptions to renovations it said neither the government nor homeowners could afford. More recently, Italian Prime Minister Giorgia Meloni has criticised the EU’s ban on the sale of new fossil fuel-powered car engines after 2035 as a “self-destructive” policy, and committed to persuading Brussels “to correct these choices”.

Countries particularly in Scandinavia going cold on interconnection

There are signs of realism in Norway which is turning away from electricity interconnection as its governing coalition collapsed in January over disagreements over energy co-operation with Europe. Most of the Storting now agrees there should be no more interconnectors while several parties want to renegotiate the deals with Britain and Germany which are seen as importing price volatility into the Norwegian market. This came months after Sweden declined a new interconnector project with Germany, with Energy Minister Ebba Busch describing the Germany market as dysfunctional:

“We cannot connect southern Sweden, which has a large deficit in electricity production, with Germany, where the electricity market today does not function efficiently. That would risk leading to higher prices and a more unstable electricity market in Sweden,”
– Ebba Busch, Swedish Energy and Industry Minister

In December she re-iterated her position, saying Sweden would not go ahead with an interconnector “until Germany gets its system in order”, and suggested Germany should split the country into separate bidding zones. Such reforms would prevent Germany from importing as much of Sweden’s cheaper electricity, mostly generated by hydro, thereby limiting the extent to which costs are increased for Swedish consumers.

At the same time, ACER, the EU energy regulator warned that electricity network costs could double by 2050, “endangering the overall affordability of electricity bills” as more strain was placed on existing grids. ACER said that “containing electricity system costs is key for EU competitiveness” as annual power grid investment needs to double to €100 billion per year. Network costs could increase by 20-40% by 2030, and possibly up to 100% by 2050.

Hydrogen goes off the boil…

Approximately 20% of EU hydrogen projects were cancelled or stalled in 2024, equating to 29 GW of capacity. 23 projects in Europe have been cancelled or stalled across 11 major European countries with issues around high costs, funding difficulties, and insufficient demand. According to Bloomberg NEF, only two markets — China and India — are likely to see green hydrogen become cost-competitive, reaching a comparable price to grey hydrogen by 2040. Norwegian company NEL, one of the world’s leading manufacturers of electrolysers for the production of green hydrogen, temporarily stopped production last year due to a lack of demand.

In September Equinor cancelled a major hydrogen project saying “there was no market”, for the scheme and citing high costs. The project involved producing up to 10 GW of blue hydrogen in Norway and transporting it via a proposed €4–6 billion pipeline. Equinor stated that the lack of a viable business case, including unclear regulatory frameworks and absence of committed customers, led to the decision.

Soon after, Shell decided to abandon its plans for a hydrogen hub in Norway. In July 2021, Aker Clean Hydrogen and CapeOmega signed a Memorandum of Understanding with AS Norske Shell to explore opportunities to develop the Aukra Hydrogen Hub to a large-scale production facility for clean hydrogen using natural gas from the local gas processing plant. The consortium had a goal to use 250 MW of renewable power from existing onshore grid capacity to produce 1200 tonnes per day of blue hydrogen by 2030 and then double capacity by 2035 using blue hydrogen and green hydrogen from offshore wind farms. Like Equinor, Shell blamed market dynamics for the project’s cancellation.

In October, Finnish refiner Neste dropped plans to begin green hydrogen production by 2026, announcing that an electrolyser project at its Porvoo refinery had been deprioritised after a “critical assessment” of its investments. The same month, Uniper cancelled its SkyFuelH2 project in Sweden, while BP appeared to quietly downsize a planned electrolyser in Castellon from 200 MW to 25 MW. In March, BP announced it would no longer continue with its HyGreen Teesside hydrogen project, following its decision to scale back investments in green energy and limit future hydrogen developments.

Repsol has decided to put three of its major hydrogen projects in Spain on hold, representing a total capacity of 350 MW, due to an unfavourable regulatory framework that might impose a permanent windfall tax on energy companies. The three hydrogen projects include a 100 MW project in Cartagena valued at US$ 217 million, a 150 MW project in Tarragona and a 100 MW project in the Basque country. The company has decided to proceed with an electrolyser project in Sines, Portugal.

In the US, Air Products exited all its major US green hydrogen projects, including a US$ 500 million facility in New York and a project in California, due to economic and regulatory challenges. In Australia, Trafigura’s cancelled its AU$750 million green hydrogen project at Port Pirie Project after feasibility studies indicated prohibitive costs and low demand, and Infinite Green, the Western Australia-based hydrogen company collapsed due to financial disputes and challenges in securing investment.

…while nuclear is once again in vogue

Net zero realism is driving renewed interest in nuclear power, particularly in the US where energy hungry AI datacentres are driving interest. Holtec International’s plans to re-open the Palisades reactor continue and now Constellation Energy wants to re-open Three Mile Island Unit 1 to power Microsoft datacentres, and NextEra intends to get Duane Arnold back online. So-called “hyperscale” technology companies including Amazon, Meta and Google have entered into tentative partnerships with advanced nuclear technology developers. Datacentre operator Switch and steelmaker Nucor have also shown interest in advanced nuclear generation. In December, Switch and Oklo announced a 20-year, 12-GW nonbinding “master power agreement” through which the advanced nuclear company would develop, build and operate nuclear plants to power Switch facilities. Small Modular Reactors are being proposed at retired coal-fired power plant sites, where they can take advantage of existing grid connections.

The Spanish government is under pressure to reverse its nuclear ban after widespread protests against the closure of the Almaraz nuclear power station. In February 2025, the Spanish Congress approved a non-binding proposal urging the government to reconsider the phase-out, passing with 171 votes in favour, 164 against, and 14 abstentions. It calls for extending the operational life of existing nuclear plants, citing their role in ensuring energy security and reducing greenhouse gas emissions. At the same time, 32 companies within the Spanish nuclear industry signed a manifesto advocating for the continued operation of nuclear power plants, arguing that the original 2019 agreement does not reflect current geopolitical and economic realities.

Belgium has decided to reverse its nuclear phase out. In March 2025, Belgium finalised a 10-year extension for its Doel 4 and Tihange 3 nuclear reactors, allowing them to operate until 2035. Australia is also talking about ditching its nuclear moratorium, with nuclear a central issue in the upcoming May elections. Opposition leader Peter Dutton unveiled a AU$ 331 billion plan to establish a taxpayer-funded nuclear power industry, aiming to have the first reactor operational by 2036 and seven commercial plants by 2050. The plan proposes building reactors on sites of retiring coal-fired power stations, including Tarong, Callide, and Liddell.

Even Germany is considering re-opening its closed reactors which until very recently was unthinkable. Germany completed its nuclear phase-out in April 2023, however in March 2025, the country’s nuclear engineering association suggested that up to six reactors could be restarted, depending on their dismantling status. This discussion arises amid concerns over energy imports and economic performance, as Germany imported 25 TWh net in 2024 and faced economic contractions in 2023 and 2024.

Finally, I cannot complete a summary of my 9^th year in business without referring to the near blackout on 8 January. My coverage of the event attracted a huge amount of coverage, with my original tweet being read 453k times. There is still more analysis to be done on the incident, which I will come back to when certain client projects I’m working on have wrapped up, however soon after the drama, NESO announced an audit of its demand forecasting, which I had also criticised, so perhaps this work is making a difference.

I would like to thank all my clients, colleagues and readers for your ongoing support over the past year, and I look forward to seeing what the next year of Watt-Logic brings.

“Facts do not cease to exist because they are ignored,”

— Aldous Huxley