LONDON — The U.K. will break China’s stranglehold over crucial net zero supply chains, Energy Minister Chris McDonald has pledged. McDonald, a joint minister at the Department for Energy Security and Net Zero and the Department for Business and Trade, told POLITICO he is determined to bolster domestic access to critical minerals. Critical minerals like lithium and copper are used in essential net-zero technologies such as electric vehicles and batteries, as well as defense assets like F35 fighter jets. China currently controls 90 percent of rare earth refining, according to a government critical minerals strategy published last week. McDonald said China’s dominance of mineral processing risks driving up prices for the net zero transition.  The U.K. has made a legally-binding pledge to reduce planet-damaging emissions to net zero by 2050. McDonald fears China has become a “monopoly provider” of critical minerals and that its dominant role in processing allowed China to control the costs for buyers. “We want to capture this supply chain in the U.K. as part of our industrial strategy. To do that … means, ultimately, we’re going to have to wrest control of critical minerals back into a broad group of countries, not just China,” he said. The government’s critical minerals strategy includes a target that no more than 60 percent of U.K. annual demand for critical minerals in aggregate is supplied by any one country by 2035 — including China. “So, if there is an investment from China that helps with that, then that’s great. And if it doesn’t help with that, or it sort of compounds that issue that isn’t consistent with our strategy, then we judge it on that basis ultimately,” McDonald said. Additional reporting by Graham Lanktree.

LONDON — Ministers must act now to address an “emerging risk to gas supply security,” the government’s official independent energy advisers have warned.  The government must make plans to avert a threat to future gas supplies, the National Energy System Operator (NESO) said.  While the advisers say the conditions creating a gas supply crisis are unlikely, any shortage would have a severe impact on the country. In its first annual assessment of Britain’s gas security, expected to be released later today but seen by POLITICO, the NESO said diminishing reserves of gas in the North Sea and competition for imports are creating new energy security risks, even as the country’s decarbonization push reduces overall demand for the fossil fuel.  Britain is projected to have sufficient gas supplies for normal weather scenarios by winter 2030/31, but in the event of severe cold weather and an outage affecting key infrastructure, supply would fall well short of demand, NESO projects.   The scenario in the report involves what the NESO calls the “unlikely event” of a one-in-20-year cold spell lasting 11 days alongside the loss of vital infrastructure.   If this were to occur, the consequences of a shortfall in gas supply could be dire.   It could trigger emergency measures including cutting off gas from factories, power stations, and — in extreme scenarios — homes as well. It could take weeks or months to return the country to normal.   The vast majority of homes still use gas boilers for heating.   VULNERABILITY Informed by the NESO’s findings, ministers have published a consultation setting out a range of options for shoring up gas security.  It comes amid growing concern in Whitehall about the U.K.’s vulnerability to gas supply disruptions. Russia is actively mapping key offshore infrastructure like gas pipelines and ministers have warned it has the capability to “damage or destroy infrastructure in deepwater,” in the event that tensions over Ukraine spill over into a wider European conflict.  While Britain has long enjoyed a secure flow of domestically-produced gas from the North Sea — which still supplies more than a third of the fuel — NESO’s report says gas fields are experiencing “rapid decline.” The amount available to meet demand in Britain falls to “12 to 13 percent winter-on-winter until 2035,” it says.  That will leave the U.K. ever more dependent on imports, via pipeline from Norway and increasingly via ship-borne liquefied natural gas (LNG) from the U.S. — and Britain will be competing with other countries for the supply of both.  The report projects that during peak demand periods in the 2030s, the Britain’s import dependency will be as high as 90 percent or more.  Overall, gas demand will be lower in the 2030s because of the shift to renewable electricity and electric heating, but demand will remain relatively high on very cold days, and when there is little wind to power offshore turbines, requiring gas power stations to be deployed, the report says.  “This presents emerging risks that we will need to understand to ensure reliable supplies are maintained for consumers,” it adds.  Reducing demand for gas by decarbonizing will be key, the report says, and risks are higher in scenarios where the country slows down its shift away from gas.   But decarbonization alone will not be enough to ensure the U.K. would meet the so-called “N-1 test” — a sufficient supply of gas even if the “single largest piece” of gas infrastructure fails — during a prolonged cold spell in winter 2030/31. In that scenario, “peak day demand” is projected to reach 461 million cubic meters (mcm), but supply would fall to 385 mcm, resulting in a supply deficit of 76 mcm, a shortfall of around 16 percent of what is needed to power the country on that day.  That means ministers should start considering alternative options now, including the construction of new infrastructure like storage facilities, liquefied natural gas (LNG) import terminals, or new onshore pipelines to ensure more gas can get from LNG import sites to the rest of the country. The government consultation will look at these and other options.   The critical piece of gas infrastructure considered under the N-1 test is not identified for security reasons, but is likely to be a major import pipeline from Norway or an LNG terminal. The report says that even “smaller losses … elsewhere in the gas supply system” could threaten gas security in extreme cold weather.  GAS SECURITY ‘PARAMOUNT’  The findings will likely be seized on by the oil and gas industry to argue for a more liberal licensing and tax regime in the North Sea, on a day when the government announced its backing for more fossil fuel production in areas already licensed for exploration.  But such measures are unlikely to be a silver bullet. The report says: “Exploration of new fields is unlikely to deliver material new capacity within the required period.”  Deborah Petterson, NESO’s director of resilience and emergency management, said that gas supply would be “sufficient to meet demand under normal weather conditions.”  “We have, however, identified an emerging risk to gas supply security where decarbonization is slowest or in the unlikely event of the loss of the single largest piece of gas infrastructure on the system.  “By conducting this analysis, we are able to identify emerging risks early and, crucially, in time for mitigations to be put in place,” she added.  A spokesperson for the Department of Energy Security and Net Zero said ministers were “working with industry to ensure the gas system is fit for the future, including maintaining security of supply — which is paramount.”   “Gas will continue to play a key role in our energy system as we transition to clean, more secure, homegrown energy,” they added. “This report sets out clearly that decarbonization is the best route to energy security — helping us reduce demand for gas while getting us off the rollercoaster of volatile fossil fuel markets.”  Glenn Bryn-Jacobsen, director of energy resilience and systems at gas network operator National Gas Transmission, said in the short-term, Britain’s gas supply outlook was “robust” but that “looking ahead, we recognise the potential longer-term challenges.” “Gas remains a critical component of Britain’s energy security — keeping homes warm, powering industry, and supporting electricity generation during periods of peak demand and low renewable output,” he added. “In considering potential solutions, it is essential to look at both the gas supply landscape and the investment required in network infrastructure,” he said. 

LONDON — Rachel Reeves needs at least one good news story to sell. The under-fire U.K. finance minister is gearing up for a tricky budget next week — and slashing Brits’ energy bills could give her something to shout about. Officials in the Treasury and at No. 10 Downing Street are exploring ways to cut domestic energy costs by shifting some levies currently added to household bills into general taxation, said three government figures granted anonymity to discuss pre-budget planning.  Ministers are targeting a cut of between £150 and £170 on an annual household bill, according to one of the three figures. That would get Chancellor Reeves and Energy Secretary Ed Miliband halfway toward a totemic election promise of slashing bills by £300 by 2030 — and give the government something positive to pitch on budget day.  Officials are looking at “big numbers,” said another of the figures. “It could be a significant moment.”  A cut to VAT on energy bills is also under consideration, they said, echoing previous reports.  Number crunching by green policy wonks shows how Reeves, via those changes to levies and a potential VAT cut, could get the Treasury to its magic number.  PRIORITY: BILLS  Energy bills are the single biggest factor cited by voters as a cost-of-living concern, according to polls. Left-leaning think tank the Institute for Public Policy Research, which is highly influential in government circles, has called on Labour ministers to launch a “war on bills” campaign, modeled on Prime Minister Anthony Albanese’s approach in Australia.  The hope in the Treasury is that, by conjuring up a sum large enough to win some prominent headlines, Reeves might land a good news story on energy bills on a day otherwise set to be dominated by a “smorgasbord” of unpopular tax rises.  Energy prices were “still very high for people,” Reeves acknowledged earlier this month. She pledged to make action on the cost of living “one of the three priorities for the budget,” alongside reducing national debt and protecting the National Health Service.  Last week, nine Labour MPs, including the chair of parliament’s Environmental Audit Committee, Toby Perkins, wrote to Reeves urging her to move all social and environmental levies from bills into taxation.  Advocates regard this as a fairer way to ensure the costs fall on those with the broadest shoulders.  “The public wants to see action to reduce energy bills, which now ranks as the most worrying household expense amongst the population,” the letter, coordinated by charity the MCS Foundation, said.  OPTIONS  A dizzying array of levies are charged on bills to pay for renewable energy projects, energy-efficiency schemes and the costs of maintaining a stable electricity system. Collectively, they make up around 18 percent of the average electricity bill.  It isn’t yet clear which might be moved into taxation, but the first government figure above said the so-called Renewables Obligation — a charge that provides an income for older clean energy projects, some built 20 years ago — is the leading candidate to be shifted onto taxation.  The think tank Nesta, which has calculated the value of the reform, says it could potentially cut electricity bills by £86. The New Economics Foundation think tank puts the figure at around £95.  The government is also looking at the Energy Company Obligation, according to reports, which is currently levied on electricity and gas bills. That could instead be paid for using spending already allocated to the £13.2 billion Warm Homes Plan.  The Warm Homes Plan is expected to pay for energy-efficiency measures, solar panels and electric heating for poorer households — but full details have not yet been finalized.  Cornwall Insight, a consultancy which forecasts future trends in the energy market, said Tuesday that cutting VAT on energy bills from 5 percent to zero at the budget could bring down annual bills by a further £80.  NET ZERO CONSENT  Ministers hope taking direct action on bills will shore up public confidence in the government’s wider energy and climate agenda, which includes a stretching target to almost fully decarbonize electricity by 2030 and hit net zero greenhouse gas emissions by 2050.  The goal in the long run is to reduce U.K. dependence on gas, the volatile price of which has done major damage to household finances in recent years.  But the problem for the government is that actions required to achieve that strategy are — in the short term at least — pushing up bills. The costs of investing in new clean power sources like offshore wind farms, along with the electricity lines and pylons required to clean up the energy system, are all adding to costs.  The independent National Energy System Operator expects charges on energy bills to pay for upgrading the power grid to hit £93.48 next year, a jump of £40. Further increases are anticipated as vast pylon-building projects gather steam.  “This is a really delicate time for prices and their link to the legitimacy of the energy transition,” said Adam Berman, director of policy and advocacy at Energy UK, speaking in September. If ministers don’t look at ways to lower bills now, he argued, “they will be lining themselves up for a very challenging start to next year.”  Opposition parties have seized on this weakness in the government’s energy strategy. The Conservatives are calling for a Cheap Power Plan (rather than a clean one). Nigel Farage’s Reform UK said it would tear up expensive government contracts with offshore wind projects and abandon net zero altogether.  “Bills are the number one public concern,” said Sam Alvis, director of energy at the IPPR. “Regardless of whether it’s to underpin support for the clean power mission, any government needs to show it’s heard that message from the public that they want action on cost. Without that sense of public buy-in now, there’s no hope for any longer term economic or energy reforms.”  A Treasury spokesperson confirmed action on the cost of living was a priority for Reeves but said: “We do not comment on budget speculation.” 

LONDON — When Britain’s top finance minister held a doomy pre-budget press conference earlier this month, it seemed like a traditional Westminster affair. But it didn’t take long for the established members of the press corps to spot that two front-row seats had — for the first time — been reserved for online finance influencers hand-picked by the government. “I could feel the glares hitting the back of my head from people wondering who I am and why I was on the front row,” recalls Cameron Smith — a creator best known as “Cazza Time” to his hundreds of thousands of online followers. For Smith, this was only his latest involvement in a developing government comms strategy that both influencers and Whitehall insiders say is genuinely innovative for the U.K. At the same time, the growing operation has traditional journalists grumbling, political comms specialists nodding — and influencers themselves wrestling with how to maintain their prized independence. “Obviously there is a risk it becomes a bit of a gravy train, and people end up willing to do anything to get a video with the prime minister or whoever it may be,” says fellow climate creator Laura Anderson. “But I hope people’s audiences will hold them accountable.” ‘NOT JUST THE WESTMINSTER BUBBLE’ Smith — or “Cazza,” as Prime Minister Keir Starmer apparently calls him — first got tapped up under the previous Conservative government, long before he found himself bagging a front-row seat at Reeves’ speech. An out-of-the-blue email invited him to cover what would be Jeremy Hunt’s last budget before the 2024 general election. It felt, Smith says, as if the flailing Conservative government was “clutching around” to drum up support — but he eventually agreed. His first-ever interaction with a politician was a face-to-face chat with the country’s top finance minister. The civil-service-led operation behind that early foray has ballooned under Labour. A dedicated New Media Unit has been tasked with tapping into the U.K.’s less politically-engaged audiences. The unit recently embarked on a hiring spree to help it identify and engage with Britain’s biggest online creators. That has further opened the door for creators like Smith, who focuses on personal finance content for people aged 18 to 35. He’s been able to put his audience’s questions directly to senior establishment figures, and in the last several months alone has enjoyed direct access to Reeves, Starmer and even the governor of the Bank of England, Andrew Bailey. “What we’ve tried to do is really appeal to audiences in the real world, not just the Westminster bubble,” said one senior Whitehall communications official, granted anonymity like others in this story to discuss the project. “Through partnering with creators who have a strong audience and strong reputation, you can have conversations about what government is doing while avoiding some of the traps we get into with journalists.” Content creators are “very ordinary people” asking the questions members of the public want answering, according to a government New Media Unit insider. | Tolga Akmen/EPA Talk of “traps” is likely to raise eyebrows among Westminster’s traditional journalists, who fiercely prize their ability to hold the government to account. Some veterans of the Westminster lobby smiled when Abi Foster, the other online creator invited to grill Reeves, went on Times Radio just after the press conference to bemoan the stage-managed event as “not the stuff of viral clips.” For good measure, she also lamented the chancellor’s “long-winded” answers. Government figures insist there’s no attempt to control influencers, and appear keen to distance themselves from the U.S. Trump administration’s efforts to bring content creators that are aligned with the president into the fold. Many of those invited in the U.K. include experts on the various topics: doctors, nurses, teachers, academics and campaigners, they point out. “If you draw the comparison with America, it’s very much those on the political right who sit in those rooms,” the same official quoted above said. “That doesn’t apply here.” PUSHBACK Still, the unprecedented access to ministers has left some creators concerned about how to balance close political engagement with the hard-earned trust that keeps their audiences loyal. “It’s something that we don’t take lightly,” says Jack Ferris, content lead for Earthtopia, a channel that has become one of the largest eco-communities on TikTok. Ferris’ first interaction was as part of a group of climate influencers invited for coffee and pastries with Energy Secretary Ed Miliband and his comms team to discuss how they could work together. “We also got a tour of No. 10, which was very cool,” he recalls. “I told my mum immediately after I got out.” But while the channel he helps run focuses primarily on good news stories around net zero, Ferris insists it won’t be “cowed” in criticizing the government. “You don’t want to make it look like because we are going to all these nice political events now we’re only going to be talking about what they do in a positive light.” Laura Anderson, a climate content creator and PhD researcher known to her audience as “Less Waste Laura,” shot to online prominence in part because of a successful campaign to persuade governments to ban disposable vapes. Anderson said she recognizes the risk that influencers could “get dazzled by Downing Street and the canapés and drinks, and forget this is a government that we should be holding to account.” But she says creators used a recent roundtable inside government to “bluntly” ask whether they were expected to become “mouthpieces” for the administration. The answer? “Absolutely not.” ‘THEY NEVER ASK: CAN YOU DO THIS?’ Ferres, who outside his online creator role works as a comms consultant, insists the relationship doesn’t differ much from a traditional PR approach. Government departments send over press releases and ask if there’s a way they can make an announcement work for creators. “They never ask: Can you do this? It’s more around whether it would be of interest to our audiences — and it’s down to our editorial control to say if it’s interesting,” he says. Smith, who built his vast audience without that proximity to power, seems wary about how to move forward. While tranches of his audience perceive him as a trusted voice who is now able to grill leaders, others view him as a political novice who is being “manipulated.” Having gained followers unaided, most creators say they do feel empowered to push back. Smith says he has repeatedly refused to post content when he feels he’s been given a “politician’s answer.” “Really, really clever” — that’s one eco influencer and comms consultant’s verdict on Energy Secretary Ed Miliband’s Instagram content. | Pool picture by Tolga Akmen/EPA And the consensus is that cutting off access to a critical voice would lead to an online firestorm that would do real reputational harm to the government. “Ultimately, I don’t need Rachel Reeves in the room with me to explain what the budget is going to mean to people’s finances,” Smith argues. “People listen to me regardless, so I don’t need them — but there’s a way we can work together and that adds credibility to what I’m saying.” ‘GENUINELY FUNNY AND ENGAGING’ There are few signs yet that the government — which lags right-wing Nigel Farage in the polls and has spent the week locked in internal warfare — is benefiting from its online strategy. But some individual ministers are throwing themselves into it with gusto — and seem to be avoiding the kind of trend-chasing content that can afflict middle-aged politicos who’ve spent too much time online. “Ed Miliband, for example, is doing lots of different types of content on Instagram,” Ferres says. “It’s actually genuinely funny and engaging, but managed to loop back into his clean energy vision — it’s really, really clever.” “I think there’s something about the fact that content creators are very ordinary people who are asking genuine questions,” an NMU insider says. “That helps, and then ministers know when they are speaking to them, they are getting questions that the public really care about. “It’s different to having to sit opposite [BBC interviewer Laura Kuenssberg] and having to answer all these different questions on different topics.”

Scotland’s new plan to fund big infrastructure projects already has an affectionate name: “kilts.” The country was Wednesday night given the same credit rating as the United Kingdom — paving the way for it to raise funds through the markets on more favorable terms. It’s a bid by Scotland’s pro-independence devolved administration to boost the country’s economic firepower and get big projects off the ground. City of London wags swiftly dubbed the bonds “kilts,” a Scottish-flavored riff on Britain’s own government bonds, known as gilts. “This is a very proud day for Scotland, because we’ve achieved the highest possible credit rating that we could do within the United Kingdom,” Scotland’s First Minister John Swinney said in an interview with POLITICO. “It’s a reflection of the strength of the Scottish economy, the strength of our financial management and the strength of our financial institutions.” The Scottish government will issue its first bonds next year, with a £1.5 billion bond program planned over the life of the next parliament. “The focus of that would be on key capital investment priorities around net zero and housing to make sure that Scotland is equipped for the long-term challenges that we face,” said Swinney. Devolved powers given to Scotland in 2016 — two years after a failed referendum bid to take the country out of the U.K. — allow the issuance of government bonds for capital investment. But both credit agencies which gave Scotland its favorable grade stressed that their ratings could be cut if Scotland moved towards independence from the U.K., something Swinney’s government has long push for. Swinney acknowledged “there will always be context which affects the credit ratings and ratings agencies will assess different dynamics and different factors,” but he said he took “confidence” from the strength of Scotland shown by the ratings. “These are significant sources of assurance, but obviously we’ve got to ensure that we take forward responsible and focused investment programs that strengthen the Scottish economy to deal with any assessments that might change in the years,” he said. Swinney also pointed to political instability in Westminster — where the top of the governing Labour Party is locked in a briefing war amid tumbling poll ratings — as a factor in how Scotland is seen. “As somebody who’s spent a lifetime in politics, I can’t quite fathom who thought the briefing on Tuesday night from Number 10 was a good idea, because it’s just absolutely fueled uncertainty about the prime minister’s leadership,” Swinney — whose party battles Labour in Scotland — said. “We’re operating within the United Kingdom, from which we’re not insulated. Of course we’re not insulated, but we have got fundamental strengths that come out of this analysis, on which I think we can build a really strong economic foundation for the future,” he added.

NEWPORT, Wales — Road signs around Newport still refer to this sprawling former industrial site as a radiator factory. But soon, it will generate a different kind of heat. Microsoft has chosen this area of South Wales — once the world’s steel capital — to build hulking new data centers. Five buildings, covering an area larger than three football pitches, are springing up to meet what the company describes as “exploding demand” for artificial intelligence compute power.  For Microsoft, the area’s industrial heritage is precisely why it’s investing. Newport’s legacy of heavy-duty factories means it has the infrastructure needed for energy-intensive data centers. But doubts over whether Britain can supply enough energy to keep up with demand from data centers are an urgent problem for the government’s AI ambitions. The government’s former AI adviser Matt Clifford has warned that without energy and planning reform, new data center projects and the billions of pounds of investment they bring are at risk.  Britain’s industrial electricity prices are 60 percent higher than the average of countries in the International Energy Agency, and waits for a grid connection can stretch to a decade.  “We had the biggest AI funders in the world lining up to invest tens of billions into our infrastructure if only we could sort out our energy mess,” Clifford said at an event about his time in No.10. U.S. Ambassador to the U.K. Warren Stephens, Donald Trump’s point man in London, is also watching closely, calling Britain’s energy costs the country’s “chief obstacle” to growth. “If there are not major reforms to U.K. energy policy, then the U.K.’s position as a premier destination in the global economy is vulnerable,” Stephens warned a business gathering in London. A TALL ORDER The Newport project will need 80MW of energy – enough to power a small town – but the Department for Science, Innovation and Technology (DSIT) predicts the country needs to boost its total data center capacity five-fold by 2035, from 1.8GW to 9.6GW. That expansion will mean data centers’ power total demand will treble over the same period, according to NESO, the body which manages U.K. electricity demand. A spokesperson for the DSIT said it was looking at “bespoke options” to support data centers’ energy demands, adding: “The work of our AI Energy Council — bringing together regulators, energy companies and tech firms — will ensure we can do that using responsible, sustainable sources.” AI Minister Kanishka Narayan told a conference for AI researchers in London in October that there was “no better place to build” than Britain, arguing its combination of talent, access to capital and large public markets is unmatched. Investors aren’t so sure.  “People aren’t willing to pay a premium on U.K. power rates to run their workloads here,” Mike Mattacola, international general manager at AI infrastructure company CoreWeave said at the same conference. “We need to fix that.” SELLING THE SHOVELS It’s not just energy prices that are the problem. The boss of Hitachi Energy U.K., which is working with the National Grid to upgrade Britain’s power network, warned that the grid is the biggest hurdle to Britain’s AI ambitions. Laura Fleming said data centers should be at “the heart” of the country’s energy planning, but added: “I’m still not sure whether as the U.K. we have sufficiently planned for this.”  More than half all applications for a grid connection are now made by data centers, according to the National Grid. Energy regulator Ofgem is trying to get a grip of things, grumbling that amid the “credible data center projects” applying for a grid connection, they want to get rid of “less viable projects that may crowd out those with genuine merit.” Power providers, meantime, are lining up to find the opportunities in this uncertainty. Two hundred miles to the north of Newport, the U.K.’s largest power station is offering itself as one solution. Drax Power Station burns wood pellets imported from North America and wants to build data centers hooked up to its four biomass terminals.  Richard Gwilliam, director of future operations, revealed that Drax has already held talks with hyperscalers and plans to bring a data center online in the early 2030s. He hoped the 2.6-gigawatt power station could offer “big scale stuff” to the market. Gwilliam also said the existing connections gave biomass a trump card to play in the data center race. SQUARING THE CIRCLE The rush for power is also clashing with Britain’s net zero ambitions. The most in-demand energy source for data centers is still fossil fuels, specifically gas. National Gas said it has had inquiries from five big data center projects since last November, equivalent to 2.5GW worth of energy capacity, or twice the capacity of Britain’s biggest nuclear power station, Sizewell B.  Its chief commercial officer, Ian Radley, argued gas provided customers with “the flexibility and capacity they need to enable the Government’s strategic AI ambitions.”  But environmental groups point out that the surge in carbon emissions from new data centers have not been factored in to the  U.K.’s Carbon Budget Delivery Plan, which sets out a path for the government to hit legally-binding climate goals up to 2037.  “It’s unclear how the government intends to square the circle of encouraging a construction frenzy of new, highly polluting data centers while not overshooting the binding climate targets they need to meet,” said Donald Campbell, director of advocacy at campaign group Foxglove. This tension is also being played out at the AI Energy Council, a body the government formed in January to bring AI and energy companies together, but which has only met twice.  It is co-chaired by two ministers with different priorities. Ed Miliband, as energy secretary, needs to cut Britain’s emissions to zero by 2050, while Technology Secretary Liz Kendall needs to turn AI’s promises of investment and growth, particularly to left-behind areas, into a reality.  The government has pushed the idea AI Growth Zones — huge data center campuses on former industrial land, which already have grid connections and will get fast-tracked through planning — as a solution. One has already been announced in Northumberland, but a decision on a second, planned for Teesside in north-east England, has been delayed until the end of this year by Miliband, whose department has to make a call on whether to greenlight plans for a hydrogen plant on the same site, which could preclude data centers being built there. “There is a large fight going on inside of government where Ed Miliband seems to have set himself up against not just the prime minister, but a number of secretaries of state,” Houchen told POLITICO during Conservative Party Conference in October.  THE NUCLEAR OPTION Long term, the government is betting on a cleaner, but more expensive energy source — nuclear, specifically small modular reactors. Michael Jenner, CEO of nuclear firm Last Energy UK, said they had received dozens of enquiries from data center builders and argued that the green credentials of nuclear was an ace card it could play against rival bids from gas companies.   “If you’re thinking about building data centers in South Wales, which a lot of people are, you have a problem with the authorities because they don’t want new gas there,” he said.  In September, EDF Energy announced plans to work with American company Holtec International building a crop of data centers next to small modular nuclear reactors at a disused coal plant in Nottinghamshire.  The Tony Blair Institute, which is influential with government ministers, has argued nuclear has a “unique” advantage when it comes to data centers. It also believes the country should scale back its net zero plans in favor of reducing energy costs to attract data center investment.  “Cheap, firm power is … not a ‘nice to have’ but a prerequisite for attracting AI-driven growth,” it argued in a report last month. Gas, meanwhile, should be part of that energy mix, the Institute recommended in July. Firms represented at the AI Energy Council have urged ministers to green-light greater use of gas turbines in the short term. The clock is ticking. Gas, nuclear, renewables or even wooden pellets — ministers willing on an AI revolution need to make decisions fast.  

LONDON — Keir Starmer loves to play the climate leader. But only when his political advisers (and the powerful Chancellor Rachel Reeves) tell him he’s allowed. The green-minded U.K. prime minister flies into the COP30 summit in Brazil Thursday, armed with undeniable climate credentials. His government is pressing ahead with a 2050 net zero target, even as right-wing political rivals at home run away from it. It is about to hand 20-year contracts, laden with financial guarantees, to companies developing offshore wind farms. Just by attending COP, Starmer has shown he’s willing to publicly back the faltering global climate cause, despite furious attacks on the green agenda by close ally Donald Trump. But his claim to global leadership comes with a catch. Action on climate change is also tied to the political agenda back home, where Starmer and Reeves insist they are focused on bringing down bills and driving economic growth. As the prime minister flies in and out of Brazil this week, those key themes dominate. In a speech on Tuesday, Reeves pledged to “bear down” on the national debt and focus on the cost of living — even it requires “hard choices” elsewhere. Climate is no exception. SHY GREEN It was Starmer’s “personal decision” to go to Brazil, U.K. Climate Minister Katie White told a pre-COP event in London on Tuesday. It was reported in the run-up to the summit that he would skip Brazil, amid concerns among his top political aides about the optics of a jaunt to South America to talk climate while voters — disillusioned with Starmer and Labour — struggle with the cost of living at home and brace for tax rises expected in the budget. In the end, Starmer opted to go. But the absence of a full traveling press delegation, the norm at previous COPs, means his visit will generate less media coverage. (Government officials insisted the decision not to take a full press pack was purely logistical.) Starmer, while not an expert, is instinctively supportive of climate action, said one government official. But not so much so, countered a Labour MP, that he has “his own ideas about things.” “He wants to do the right thing, but would be steered as to whether that’s talking about forests or clean power or whatever. I suspect [No 10 Chief of Staff] Morgan McSweeney didn’t want him to go,” said the MP, granted anonymity to give a frank assessment of their leader. JOBS AT HOME GOOD, TREES ABROAD BAD The COP30 leaders’ event is taking place in Belém, the Amazon port city near the edge of the world’s greatest rainforest. But in a symbol of how domestic messaging trumps all else, Starmer will use that global platform to talk about a somewhat less exotic port: Great Yarmouth in East Anglia. It’s one of three U.K. locations — along with Greater Manchester and Belfast — where new, private sector clean energy deals are being announced, securing a modest 600 jobs. The COP30 leaders’ event is taking place in Belém, the Amazon port city near the edge of the world’s greatest rainforest. | Mauro Pimentel/AFP via Getty Images If COP’s Brazilian hosts were hoping for a grander global climate vision, they are about to be disappointed. The U.K. won’t be stumping up any taxpayer money for a global fund to support poorer countries to protect their tropical rainforests — key carbon sinks that, left standing, can help slow the rate of climate change. The Tropical Forests Forever Facility (TFFF) is supposed to be the centerpiece of the summit for Brazilian President Luiz Inácio Lula da Silva, but Lula has not been able to rely on even his close, left-wing ally Starmer — with whom he likes to chat about football — to weigh in with a financial contribution to match Brazil’s $1 billion. The U.K. played a role in establishing the concept of the TFFF. An energy department spokesperson said the government remained “incredibly supportive” of the scheme. But, with Reeves warning this week that her budget would deal with “the world as we find it, not the world as I would wish it to be,” her Treasury officials won a Whitehall battle over the U.K.’s financial backing for the scheme. Ministers say only that they will try to drum up private sector investment. ‘KEIR, SOMEWHERE IN THE MIDDLE’ The decision neatly captures the Starmer approach to climate action. If it suits the domestic economic and political agenda, great. If not then, then there is no guarantee of No. 10 and Treasury support. Taxpayer-funded international aid spending, a vital part of the U.K.’s global climate offer, has been slashed. At the same time, despite stretching emissions goals, one of the world’s busiest airports, Heathrow, will be expanded — because of its potential benefits for growth. Ministers are looking at watering down a pledge to ban new licences for oil and gas exploration in the North Sea, amid a sclerotic economy. The Treasury is considering easing the tax burden on fossil fuel companies. The bipolar approach risks bringing Starmer and Reeves into conflict with the U.K.’s energetic, committedly green Energy Secretary Ed Miliband, who will lead the country’s delegation to the COP30 conference and the formal United Nations negotiation. “On all of this, there is Ed on one side, Rachel on the other, and Keir somewhere in the middle,” said the government official. Starmer largely subcontracts his climate and energy policy to Miliband, said an industry figure who frequently interacts with government. Many MPs wish Starmer would act more like Miliband and embrace his green record more exuberantly. They point to the recent surge in support for the Green Party, which is making some in Labour nearly as nervous as the rise of Nigel Farage’s Reform UK to their right. OUTFLANKED In that context, it was a “no-brainer” for Starmer to go to COP and appear “visibly committed to climate action,” said Steve Akehurst from the political research firm Persuasion UK. “In so far as there is any real backlash to net zero in the U.K., it does not exist inside the Labour electoral coalition,” he said. The Greens are now “competing strongly for those votes.” A second Labour MP put it bluntly. “Starmer is so politically weak that to not attend would open up yet another front on his already collapsed centre-left flank,” they said. Before getting on the plane to Brazil, Starmer met sixth-form students at 10 Downing Street to talk about the summit and the environment. There was a flash of the green, idealistic Starmer that some say lurks beneath the political triangulation. He took the opportunity to remind the teenagers of the “obligation we undoubtedly have to safeguard the planet for generations to come.” “But also,” he added, it’s about safeguarding “hundreds of thousands of jobs in this country.” Additional reporting by Abby Wallace.

LONDON — The U.K. government is not moving fast enough to slash planet-destroying emissions from aviation, former Prime Minister Tony Blair has warned.  Governments in Westminster and elsewhere must step up progress in developing cleaner alternatives to traditional jet fuel, according to a report today from Blair’s think tank, seen by POLITICO.  “Aviation is and will continue to be one of the world’s most hard-to-abate sectors. Sustainable aviation fuel (SAF) mandates in Europe and the U.K. are ramping up, but the new fuels needed are not developing fast enough to sufficiently reduce airline emissions,” the Tony Blair Institute (TBI) said, referring to policies designed to force faster production of cleaner fuel.  The U.K. has made the rollout of SAF central to hitting climate targets while expanding airport capacity.  It is the third intervention on U.K. net-zero policy from the former prime minister this year.  Earlier this month, the TBI urged Energy Secretary Ed Miliband to drop his pursuit of a clean power system by 2030 and focus instead on reducing domestic bills. This followed a report in April claiming the government’s approach to net zero was “doomed to fail” — something which caused annoyance at the top of the government and “pissed off” Labour campaigners then door-knocking ahead of local elections.  Aviation contributed seven percent of the U.K.’s annual greenhouse gas emissions in 2022, equivalent to around 29.6 million tons of CO2. The Climate Change Committee estimates that will rise to 11 percent by the end of the decade and 16 percent by 2035.  SAFs can be produced from oil and feedstocks and blended with traditional fuels to reduce emissions. The U.K. government’s SAF mandate targets its use in 40 percent of jet fuels by 2040 — up from two percent in 2025.  Chancellor Rachel Reeves said in January that U.K. investment in SAF production will help ensure planned airport expansion at Heathrow —  announced as the government desperately pursues economic growth — does not break legally-binding limits on emissions.  The TBI urged Energy Secretary Ed Miliband to drop his pursuit of a clean power system by 2030 and focus instead on reducing domestic bills. | Wiktor Szymanowicz/Getty Images The TBI said that, while it expects efficiency gains and initial SAF usage will have an impact on emissions, a “large share of flights, both in Europe and globally, will continue to run on conventional kerosene.” A spokesperson for the Department for Transport said the government was “seeing encouraging early signs towards meeting the SAF mandate.” They added: “Not backing SAF is not an option. It is a core part of the global drive to decarbonise aviation. SAF is already being produced and supplied at scale in the U.K., and we recently allocated a further £63 million of funding to further grow domestic production.” The TBI said carbon dioxide removal plans should be integrated into both jet fuel sales and sustainable aviation fuel mandates, placing “the financial responsibility of removals at the feet of those most able to pay it.” 

LONDON — Former British Prime Minister Theresa May laid into her own political party Monday night, accusing it of taking a populist tilt to the right that risks emboldening Nigel Farage. May criticized the Conservatives’ decision to repeal the Climate Change Act 2008, which requires the government to cut carbon emissions by 80 percent by 2050, as an “extreme and unnecessary measure”  that would “fatally undermine” Britain’s leadership on climate issues. The U.K. committed to reaching net zero under May’s administration, something Tory Leader Kemi Badenoch has since called “impossible.” Badenoch has also advocated extensive oil and gas extraction from the North Sea. “This announcement only reinforces climate policy as a dividing line in our politics, rather than being the unifying issue it once was,” May told fellow members of the House of Lords. “And, for the Conservative Party, it risks chasing votes from Reform at the expense of the wider electorate.” May also lambasted the “villainization of the judiciary” by politicians “peddling populist narratives” and said this would “erode public trust in the institutions of our democracy and therefore in democracy itself.” Shadow Justice Secretary Robert Jenrick, who narrowly lost the Tory leadership contest last year, used his conference speech earlier this month as a tirade against “dozens of judges with ties to open-borders charities” and said “judges who blur the line between adjudication and activism can have no place in our justice system.” Though May recalled “frustrating” experiences coming up “against the courts” as a minister, she urged her party to “tread carefully.” “Every step we take to reduce our support for human rights merely emboldens our rivals and weakens our position in the world,” the former prime minister said. “Those politicians in the Western world who use populism and polarisation for their own short-term political ends risk handing a victory to our enemies.”

LONDON — Britain should scrap its flagship target of cleaning up the power system by 2030 and focus instead on cutting energy costs, according to former Prime Minister Tony Blair’s think tank.  In a new report published Thursday, The Tony Blair Institute (TBI) argued the government risked “getting the balance wrong” and blamed “decades of policy decisions” for Britain’s high electricity costs. It called on the government to shift away from its totemic clean power target, and prioritize making electricity cheap to preserve support for the net zero agenda. “If the transition continues in a way that raises costs, weakens reliability and undermines growth, it will fail both politically and practically,” the report said.  It is the second time the former prime minister, through the TBI, has weighed in on the government’s energy strategy. Earlier this year, Blair argued that global attempts to cut fossil fuel consumption are “doomed to fail” without a reset.  The intervention comes as Energy Secretary Ed Miliband faces increasing pressure to cut energy costs for struggling households, especially after the Labour Party pledged to cut them by up to £300 during last summer’s general election. Just last week, bosses of Britain’s largest energy suppliers warned MPs that the costs levied on bills — used to pay for grid upgrades and other green schemes — could continue to push up electricity bills, even if wholesale costs start to dip. A Department for Energy Security and Net Zero spokesperson said: “This report rightly recognises that clean power is the right choice for this country. This Government’s clean power mission is exactly how we will deliver cheaper power and bring down bills for good. “Our mission is relentlessly focused on delivering lower bills for the British people, to tackle the affordability crisis that has been driven by our dependence on fossil fuel markets.” ‘RECIPE FOR PUBLIC OUTRAGE’ Opposition parties have seized on high electricity costs to hammer the government over its decarbonization plans. Shadow Energy Secretary Claire Coutinho last week accused the government of creating a “recipe for public outrage” over its pledge to cut bills through the clean power plan. The TBI defended the 2050 net zero target and the shift to clean electricity, but does not pinpoint a specific date to achieve the goal. “Circumstances have changed” since Labour set the 2030 target, it argued, while “pushing the system too quickly risks driving up costs and undermining confidence.”  Shadow Energy Secretary Claire Coutinho last week accused the government of creating a “recipe for public outrage” over its pledge to cut bills through the clean power plan. | Rasid Necati Aslim/Getty Images The TBI also proposed a string of reforms to government plans, including cutting some carbon taxes on gas and bringing back a controversial proposal to overhaul the electricity market by slicing the U.K.’s single national wholesale price into different “locational” prices. The report’s authors reckon scrapping the carbon price support levy on gas would save the average household around £20 per year.  The report also called for the government to give Britain’s National Energy System Operator (NESO) a mandate to “monitor net zero delivery for cost-effectiveness,” phase out subsidies for the controversial Drax biomass power plant, and implement “radical reform” to the planning regime.  The 2030 target was “right for its time,” said the TBI’s Energy Policy Advisor Tone Langengen, who authored the report. “But circumstances have changed — the U.K. now needs more than a decarbonization plan, it needs a full-spectrum energy strategy built on growth, resilience and abundant clean electricity.”