British shadow energy secretary Ed Miliband addresses delegates attending the International Energy Week conference in London. Getty Images
British shadow energy secretary Ed Miliband addresses delegates attending the International Energy Week conference in London. Getty Images
British shadow energy secretary Ed Miliband addresses delegates attending the International Energy Week conference in London. Getty Images
British shadow energy secretary Ed Miliband addresses delegates attending the International Energy Week conference in London. Getty Images

Labour on a mission to make Britain a 'clean energy superpower'


Matthew Davies
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The UK’s shadow energy secretary has told a major conference in London that a Labour government would make Britain a clean energy superpower, should the opposition party win the next general election.

Ed Miliband, who is the Labour party's shadow minister for energy security and net zero, promised delegates at International Energy Week that “becoming a top clean energy superpower will be one of the top priorities of a Labour government”.

“It’ll be one of Keir Starmer’s five missions for government. That’s because he sees it as being about good jobs, growing our economy, lower bills and energy security.

“So, it’s not just a climate mission. It’s a security mission, it’s a growth mission and it’s a cost-of-living mission.”

Earlier, Prof Jim Skea, the chairman of the Intergovernmental Panel on Climate Change, told the IEW audience that in a stocktake of where the world is currently on climate change, the picture could be described as “pretty gloomy.”

“The world continues to warm and depending on which data set you use, we may or may not have passed the 1.5ºC threshold last year.”

“Things that we expected to happen decades in the future, actually started to happen last year – wildfires, extreme events, etc.”

Nonetheless, while Prof Skea noted that global emissions were still going up, he said the trend had been “bent”.

“We identified about 20 countries around the world where we’ve seen sustained reductions in emissions,” he added.

Value for money

Meanwhile, in his speech to the gathering of energy industry leaders, company executives, economists and academics and policymakers, Mr Miliband added that a clean power system was “the linchpin of net zero”.

Mr Miliband said a possible future Labour government could not “reject any power sources, we need them all, providing they are value for money”.

“Our 2030 clean power aim means doubling onshore wind, trebling solar power, quadrupling offshore wind with support from nuclear power and other technologies.”

Cows next to an onshore wind farm in East Sussex, Britain. EPA
Cows next to an onshore wind farm in East Sussex, Britain. EPA

As such, Mr Miliband said that should he become the UK’s next energy minister, on day one in the job he would lift the ban on onshore wind development.

“It’s costing families £180 a year in higher bills. The current government could overturn this ban very easily, it doesn’t require legislation. But there is a culture of inertia and stasis,” he said.

Noting that many in the audience were from the oil and gas companies, Mr Miliband also said it was “vital to have a managed transition” in the sector, “for energy security, for workers and so we can use the extraordinary infrastructure of the North Sea for our future”.

Labour’s plan is to use the existing oil and gasfields for their lifetimes, beyond which the North Sea can be used for carbon capture and storage (CCS), hydrogen and other future technology.

Mr Miliband went on to say that the delivery of clean energy by 2030 depended not so much on the scale of public investment, but the removal of barriers to private investment.

“I want you to be in no doubt that we stand ready to do what it takes with political will to help unleash the private investment to help deliver the future that I am laying out,” he said.

“We see public investment crowding-in, not crowding-out private investment. That is the lesson of the US Inflation Reduction Act.”

The Labour Party recently dropped its pledge to spend £28 billion a year on green projects should it win the next general election.

In the event that it forms the next government, the Labour Party replaced the promise with a new one of spending £23.7 billion over the course of the next parliament, essentially cutting the annual amount by more than 75 per cent.

Mr Miliband listed several of Labour’s public investment plans – from upgrading ports so offshore wind turbines can be made in Britain to industrial clusters to hasten the development of CCS and hydrogen, and from investment in battery factories to putting money into steel.

'Big economic opportunity'

But he was adamant that while the road to net zero was about large and small projects and adjusting consumer demand and habits, the outcome of decarbonisation was not just positive in terms of global temperature reduction but also in terms of baseline economic growth.

“It really matters that we see this as the big economic opportunity of the 21st century,” he said.

“There’s a tendency for us to talk about this, and I think it’s certainly true among parts of the green movement, in a much too hair-shirtish a way.

“This is a positive vision to make people’s lives better. This about warmer homes, this is about good jobs for people and it is about lower bills.

“That’s not to say there are not trade-offs and difficulties when managing the [energy] transition, but I think we should feel that this is positive and exciting and is the vision of the future that the country needs, rather than some burden that we’ve simply got to take on.”

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: February 27, 2024, 12:27 PM