Labour is in a mess towards net zero, warns ALEX BRUMMER and Britain is playing catch-up on zero-carbon manufacturing

The latest auction of green energy licences, capable of supplying electricity to 11 million homes, should be seen as a step forward in the race to reach net zero by 2030.

But this comes at a very high cost.

After last year’s failure, the strike price agreed by the Government for the energy to be generated is almost 60 percent higher than in 2022.

This is not to say that Keir Starmer’s promised reduction in carbon emissions is on track.

Most worryingly, as Unite points out, the contracts awarded look unlikely to unleash the green manufacturing revolution promised by a Labour government.

Instead, Labour has suspended new oil and gas licences and is scaring off offshore fossil fuel drilling with plans to raise windfall taxes on North Sea oil producers.

The main beneficiary of the auction will be Danish wind energy pioneer Orsted, which won 70 percent of the licenses.

It is unclear how Labour’s new industrial revolution will play out when only 20 per cent of offshore wind energy production is done in the UK and there are no rules on local sourcing.

The Conservatives, when they approved the new Hinkley Point supernuclear plant in Somerset, laid down rules for sourcing special steels, complex control systems and local labour from the UK.

Other big winners from the auction of offshore wind projects are Spain’s Iberdrola, owner of Scottish Power, and German utility RWE. The only UK-listed and controlled beneficiary is SSE, which has a clear green strategy.

Britain is trying to catch up on carbon-free manufacturing. Solar power is gaining ground, but most panels come from China.

Despite initial problems, heat pumps are becoming more popular and are mainly manufactured in Germany.

The only area where the UK has a technological advantage is nuclear power, thanks to Rolls-Royce’s small modular reactors (SMRs).

They are stuck in Whitehall along with the prospects of a potential export market worth £250-£400bn and thousands of jobs.

There are two theories about the delays. One is that the open auction process was disrupted by the election.

The second is that Energy Secretary Ed Miliband is listening to climate change extremists and is ice-cold on building new nuclear weapons. A formal decision is expected this month.

Failure to give Rolls-Royce a clear green light would be calamitous for the UK industry and jobs.

Rolls-Royce flight test

It should come as no surprise that Hong Kong-based Cathay Pacific’s decision to ground 34 aircraft following the discovery of an engine fault on its Rolls-Royce-powered A350-1000 fleet sent the engine maker’s shares tumbling on Monday.

The last time Britain’s biggest manufacturer had problems with its Trent electric system, the final bill (for repairs and compensation to hauliers) came to a whopping £2.4bn over the 2017-2023 period.

The speed with which Cathay is dealing with the current problem, believed to be related to a fuel nozzle, suggests that Rolls-Royce, which has enjoyed a 116 per cent rise in its shares in the past 12 months, does not face a very costly fix.

However, there is capacity for some flight disruption, with 88 A350-1000 aircraft in operation, with Qatar Airways and BA the main airlines affected.

The limited nature of the settlement caused shares to rally in late trading and broker Jeffries maintained its “buy” rating.

However, CEO Tufan Erginbilgic’s turbocharged leadership has hit its first speed bump.

Loss of confidence in TSB

TSB’s history dates back to 1810. For most of its life it has enjoyed stable ownership, first as a privatised bank and then as part of Lloyds.

It was after the great financial crisis and Lloyds’ forced marriage to HBOS that certainty was sacrificed.

After being delisted as an independent entity, it fell under the ownership of Spain’s Sabadell, suffered a systems collapse and is now a pawn in a hostile bid by a larger Spanish bank, BBVA, for Sabadell.

The Bank of England has given its approval to the deal despite opposition in Madrid. The ECB and the Spanish antitrust authorities have not yet commented.

None of this will do much to reassure TSB’s five million customers, whose bills are being passed from hand to hand like a parcel at a children’s party.

Isn’t it wonderful to own property abroad?