What the end of Port Talbot steelworks says about Britain’s green energy transition

Good morning.

This week the UK passed two historic landmarks in our green energy transition: the end of coal-fired electricity, and the shutdown of the last blast furnace at Port Talbot steelworks. For the country that pioneered the Industrial Revolution, where a million workers were employed in coal mining 100 years ago, the closure of the power station at Ratcliffe-on-Soar, with its vast cooling towers, marked the end of an era.

With the phase-out of coal signalled by the government a decade ago, the closure of this last coal-fired plant was carefully managed, in cooperation with trade unions – allowing many workers to be redeployed, retrained or made voluntarily redundant.

In Port Talbot, south Wales, by contrast, the longstanding lack of government strategy on the future for steel has meant that despite a £500m injection of taxpayer cash, 2,500 jobs are set to go, in a local economy that can ill afford to absorb mass layoffs.

The (albeit slow) move away from fossil fuels has been a long time coming, but as the Labour government pushes hard on a green transition, the Conservatives have gone the other way. As they scrap through a leadership race, the opposition’s line on green policies has hardened, with many senior Conservatives opting to criticise energy secretary Ed Miliband’s pledge to end new oil and gas licences in the North Sea and take a more overtly pro-fracking stance.

For today’s newsletter, I spoke to Chaitanya Kumar, head of the green transition programme at the New Economics Foundation (NEF), about the hopes and the challenges of rebuilding the economy for a world beyond fossil fuels.

Five big stories

In depth: ‘How exactly are we going green? That kind of planning never really happened’

While the conjunction of these two hugely symbolic moments in the green transition was purely coincidental, Chaitanya Kumar says the contrast between the two is instructive.

In Ratcliffe-on-Soar, he says, the power station’s demise was foreshadowed by years of policies that saw emissions requirements tightened on coal-fired plants to meet the UK’s climate goals – culminating in then energy secretary Amber Rudd announcing in 2015 that coal-fired power would be phased out within a decade.

“The fact that it was announced in 2015, it gave a signal to businesses and the markets: it allowed everyone to prepare for it and say, ‘It’s definitely happening,’” Kumar says, adding, “we could keep burning coal because the economics would have allowed it to some degree: it was policy that decided, no we’re not going to let this happen, because of our climate obligations.”

That has allowed for a managed transition for the plant’s workforce, he says. “A lot happened in terms of putting in place measures that ensured workers got opportunities to get new jobs in the parent company that runs the coal plant, Uniper, or new training, generous redundancy payments, flexible release – if people want to leave early, or leave later.”

Planning problems

At Port Talbot, by contrast, taxpayers are contributing £500m towards a new, electric-powered “arc furnace” which will repurpose used steel. But it will take time to build, won’t need as many staff to operate it and there was no clear transition plan for the 2,500 existing workers.

Labour strongly criticised the Conservatives for failing to exact job guarantees from Port Talbot’s owner, the Indian firm Tata Steel, when the £500m-worth of government support was originally agreed. But new business secretary Jonathan Reynolds has not been able to forestall the closure of the blast furnace, succeeding only in winning enhanced redundancy terms for the staff who will be laid off.

Kumar says it was inevitable that the heavily polluting furnaces would have to close, as the UK moves towards lower emissions. But he argues that better planning could have made the change more manageable.

“Every minister that came around talked a good game on protecting the steel industry and the importance of steel in the long term, but never really had a framework to say, ‘This is the future of steel.’

“We know we’re going green, that’s clear: but how exactly are we going green, what is the timescale, what’s the financing that’s going to be put in place? That kind of planning never really happened.”

In that context, he says Labour’s failure to safeguard jobs at the south Wales site is not surprising, with the plant reportedly losing £1m a day. “It was too late, ultimately. The majority of the investment is still coming from Tata Steel, so they had to be convinced – and they weren’t.”

‘Steel is essential’

The government has promised to publish its own steel strategy in the spring. The NEF argues that the future for the sector is likely to be powered by green hydrogen – created by splitting water into hydrogen and oxygen using renewable electricity – but that this will require significant government support, already forthcoming in some other major economies, including Germany and the US.

“What we would argue is: we know steel is essential, we know we’re going to need it for the low carbon transition as well, and we know we want to build a more resilient supply chain that doesn’t rely so much on China. All those three conditions say: invest heavily in expanding the industry in the UK in the next decade,” says Kumar.

“That would involve two technologies: one is the electric arc furnace, which is what’s replacing the blast furnace in Port Talbot. The second is more longer term, which is around hydrogen.”

An arc furnace cannot create new steel, because it doesn’t create the extreme heat required, he adds. “A hydrogen furnace can do that – but that requires much more investment and a longer term plan. That’s the path we should go down.” Given the huge amounts of electricity required by such an approach, a government pursuing this option would also need to ensure steel plants can access some of the new renewable capacity currently being built.

Signs of a green transition

That would appear to chime with the new government’s approach of taking a more active role in industry, with an industrial strategy due to be published shortly.

The chancellor, Rachel Reeves, promised in her conference speech in Liverpool last week to ensure that “things built to last, and exported around the world, are made here in Britain.”

Reeves also dropped a heavy hint that she is reconsidering how the key fiscal rule, which says debt as a share of GDP must be falling in five years’ time, must be measured. “It is time that the Treasury moved on from just counting the costs of investments, to recognising the benefits too,” she said, “calling time on the days when government stood back, left crucial sectors to fend for themselves, and turned a blind eye to where things are made and who makes them.”

The government has deliberately located the headquarters for the new GB Energy in Aberdeen, for example, in a bid to soak up some of the workers who will be laid off from the North Sea oil and gas fields in the years ahead (though some trade unions are sceptical about how many new green jobs are likely to be created).

Reeves and Reynolds (pictured above) are likely to be weighing up a dizzying number of bids from industries squeezed by the demands of the green transition and hoping for taxpayer support.

As Port Talbot falls quiet, and with steelmaking at other sites including Scunthorpe also under threat, Kumar argues that steel should be one of them. “If the so-called industrial strategy needs a frontrunner or a poster child I can’t think of a better example than steel: if you get that right on steel, you could show an example of how you could do it with other sectors as well,” he says.

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Sport

Football | Tottenham striker Dominic Solanke has been recalled to the England squad by Lee Carsley, seven years after winning his first and only cap in a friendly against Brazil. Harry Maguire, however, has been left out despite being declared fit to face Porto in the Europa League. The centre-back duly came off the bench to score an injury-time equaliser, rescuing a point for 10-man Manchester United.

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The Guardian leads with “MPs to be given historic vote on the legalisation of assisted dying”. The Times says “PM defies US to cede Chagos”, while the Mail describes handing sovereignty of the island to the Mauritius as “Starmer’s Surrender”.

The Financial Times reports “Oil surges after Biden remarks over possible attack on Iran” while i in the same vein has “Energy price scare after Biden says Israel could attack Iran’s oil”. The Telegraph leads with “Johnson: UK needs referendum on ECHR”. The Sun has “Flintoff to host Bullseye”.

Something for the weekend

Our critics’ roundup of the best things to watch, read and listen to right now

Music
Coldplay – Moon Music
★★★☆☆
Coldplay’s 10th studio album is spectacularly sentimental. Over Chilled Piano to Study To motifs, Chris Martin opens the album wanting to be more optimistic, to “find the flight in every feather … I’m trying to trust in the heavens above / And I’m trying to trust in a world full of love”, before the album wills that world into existence. There’s plenty to scoff at, but naivety and stubborn optimism remains their greatest strength. Ben Beaumont-Thomas

TV
Heartstopper (Netflix)
★★★★☆
The kids of Heartstopper are growing up, so this lovely, almost absurdly wholesome drama must grow up with them, as Nick (Kit Connor) and Charlie (Joe Locke) consider taking their relationship to the next level. For adults – particularly those who grew up with Section 28 on the books – the loveliness of Heartstopper is in imagining that this is what teenage life could have been like. For those who can relate directly to the teenagers, what a treat. Rebecca Nicholson
Film
Joker: Folie à Deux
★★★☆☆
Five years ago, Todd Phillips released his much-acclaimed take on the DC Comics supervillain, Joker, which I found bizarrely overpraised and overrated by saucer-eyed pundits. It became a prize-winning sensation – and now the sequel is here. Though it ends up as flat-out tedious as the first film, there’s an improvement. It’s a musical, of sorts, with Joaquin Phoenix warbling show tune standards and that sensational acting and musical talent Lady Gaga now in the mix. Peter Bradshaw

Podcast
The Margate Murders (Audible, all episodes out now)
Sheridan Smith and Joanne Froggatt lead the cast of this dangerously bingeable untrue crime drama. A serial killer strikes once a decade, and as a forensic psychologist, a detective and a local newspaper journalist talk about the case, it becomes clear not everyone’s accounts are reliable. It’s a scripted story, but it sounds like convincing true crime thanks to the actors’ skilful delivery and refreshingly low-key realism. Hannah Verdier

Today in Focus

Cartoon of the day | Ben Jennings

The Upside

A bit of good news to remind you that the world’s not all bad

When she visited Kenya a decade ago, Mary Fleming witnessed first-hand the negative impact of fast fashion on the environment. Up until that point, Fleming, like many others, shopped avidly, but being confronted with the fallout of mass consumption on the other side of the world was alarming.

In the years since, Fleming quit her job in corporate marketing and redirected her career to focus on sustainability. She founded a non-profit called Change Clothes that hosts a swap shop in Dublin and runs pop-up outlets and workshops across Ireland. It lets people rent, exchange and buy used clothes and gives tutorials in mending and upcycling frayed garments. Any surplus clothing in good condition is donated to refugee centres and assisted living accommodation. “If I spent every day thinking about what we’re up against I don’t think I’d bother. I want to focus on the change that is possible,” says Fleming.

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