The UK government has set out an “action plan” for reaching its target of clean power by 2030, which it describes as “the most ambitious reforms to our energy system in generations”.
The plan outlines how the government hopes to “make Britain a clean energy superpower to cut bills, create jobs and deliver security with cheaper, zero-carbon electricity by 2030”.
This was one of five “missions” in the Labour manifesto, on which the government was elected with a landslide majority in July.
Following independent advice from the National Energy System Operator (NESO), the government is aiming for clean power to meet 100% of electricity demand by 2030, with at least 95% of electricity generation coming from low-carbon sources and no more than 5% from unabated gas.
The 136-page plan sees wind and solar – in particular offshore wind – becoming the backbone of the British electricity system. It says record amounts of new renewable capacity will need to be delivered, alongside reforms to the planning process and major grid enhancements.
While delivering all this would be a huge undertaking, the plan says it could unlock extra investments worth £40bn a year out to 2030, delivering “reindustrialisation”, jobs and lower bills.
Here, Carbon Brief explains the background to the clean power 2030 target, initial steps already taken by the government, the proposals in the new action plan and what comes next.
- Where the clean power 2030 target comes from
- What clean power 2030 will look like
- How the government plans to reach clean power 2030
Where the clean power 2030 target comes from
The Labour party fought the 2024 UK election campaign on a manifesto pledging to “make Britain a clean energy superpower…with cheaper, zero-carbon electricity by 2030”.
This was an advance on the previous Conservative government’s 2021 pledge to “fully decarbonise” the power system by 2035.
Both parties had identified the need for clean power in order to help decarbonise the rest of the UK economy, as heat and transport are increasingly electrified with heat pumps and electric vehicles.
However, the Labour party has explicitly tied its clean power “mission” not just to the UK’s climate goals, but to energy security and bills in the wake of the global energy crisis, as well as jobs.
In a press statement launching the report, secretary of state for energy and climate change Ed Miliband says:
“A new era of clean electricity for our country offers a positive vision of Britain’s future with energy security, lower bills, good jobs and climate action. This can only happen with big, bold change and that is why the government is embarking on the most ambitious reforms to our energy system in generations. ”
Just after taking office at the start of July 2024, Miliband reiterated his commitment to the clean power 2030 target when setting out his priorities for government.
He then appointed Chris Stark, the former chief executive of the Climate Change Committee, to head up a new “mission control” function within government, as well as informally asking NESO for independent advice on how to reach the clean power 2030 target.
(NESO was created as part of the Energy Act 2023, having already been hived off from National Grid. It was officially launched on 1 October 2024 as a new independent organisation responsible for planning the entire energy system in Britain, including operating the electricity network and offering “expert advice to the energy sector’s decision makers”.)
Speaking to UK Energy Research Centre (UKERC) director Prof Rob Gross on the Talking Energy podcast, NESO chief economist Mike Thompson said the body had begun working on its advice to government in July 2024, soon after the election result became clear.
The government had then formally requested NESO’s guidance in an August 2024 letter, which asked for “practical advice on achieving clean power by 2030”.
It asked for different pathways to reach this goal, as well as key requirements for electricity grids, high-level analysis of costs and benefits, and suggested actions to get on track.
The NESO advice, published on 5 November 2024, said the 2030 target was “achievable…without increasing costs” and that it would insulate the UK from “volatile international gas prices”.
A key element of the NESO advice was to offer a working definition of clean power by 2030.
It adopted a definition with two parts. It said clean power should cover 100% of electricity demand by 2030, in a year with average weather conditions. In addition, it said at least 95% of the electricity generated within the country’s borders should come from low-carbon sources, with up to 5% coming from unabated gas. This means the country would become a net electricity exporter.
(The national electricity grid – and the clean power 2030 target – technically only covers the island of Great Britain, whereas Northern Ireland is part of the separate all-Ireland network.)
Thompson explained on the Talking Energy podcast:
“We think that there should be enough clean power to cover all of GB demand over the year…But of course, a lot of that generation is coming from wind power, from solar, and you can’t control when it is outputting…So we adopted this definition that actually you cover all of demand [with clean power], but you would also allow up to no more than 5% of generation to come from unabated gas.”
The government formally adopted the NESO definition of clean power when prime minister Keir Starmer announced his milestones for delivering a “decade of national renewal”.
This definition, for clean power to meet 100% of demand in 2030 but only 95% of generation, was widely reported as a “watering down” of Labour’s manifesto pledge. A spokesperson for the Department of Energy Security and Net Zero said this was “categorically untrue”.
Labour’s manifesto had not defined its clean power by 2030 target and had made clear reference to a “strategic reserve of gas power”.
An earlier Labour policy document had said that the country would “run on 100% clean…power”, which is consistent with the government’s target for clean power to meet 100% of demand.
What clean power 2030 will look like
The government’s action plan accepts the NESO advice as its starting point.
While NESO offered two different pathways to clean power in 2030, they share many of the same features, with wind and solar making up the largest share of electricity in both cases.
In 2023, fossil fuels made up a third of electricity generation in the country, with wind and solar making up another third, and the remainder coming from nuclear, biomass and imports.
By 2030, if the clean power target is met, unabated fossil fuels would make up less than 5% of generation, with wind and solar making up around 80% of the mix, as shown in the figure below.
Offshore wind would form the backbone of the GB electricity mix in 2030, meeting around half of demand under either the NESO “new dispatch” scenario or under “further flex and renewables”.
The difference between the two NESO pathways lies in the way that they manage gaps in the output of variable wind and solar power.
The “new dispatch” pathway relies more on low-carbon “dispatchable” power, meaning capacity that can be turned on and off at will. This includes gas-fired power stations fitted with carbon capture and storage (CCS), or turbines that burn low-carbon hydrogen fuel.
The “further flex and renewables” pathway relies on larger amounts of wind and solar capacity, coupled with a more flexible grid and higher levels of battery or long-duration energy storage.
The government’s action plan targets a range of clean power capacity by 2030 that would leave the door open to pursuing either of these scenarios, shown in the table below.
Crucially, the plan relies on keeping almost all of the country’s existing gas-fired power stations open for the rest of the decade, to help bridge those gaps in wind and solar output, until alternative low-carbon sources of flexibility become more widely available.
Thompson told the Talking Energy podcast:
“You keep something like a fleet around the size of the current gas fleet open [in 2030], but it would operate much, much less.”
While the existing gas fleet remains in place, the government will need to rapidly expand the amount of clean power capacity available to meet the 2030 target.
The action plan says the long timelines for new offshore wind projects mean there will only be time to bring forward schemes that are already or at least part-way through the planning process.
It also means that the next two “contracts for difference” (CfD) auctions, due to be held in 2025 and 2026, will need to secure the bulk of the offshore wind capacity required for 2030.
The UK currently has 15 gigawatts (GW) of offshore wind capacity, with another 16GW under construction or firmly committed. To meet the level required for clean power by 2030, the plan says that this would need to expand by at least another 12GW by 2030.
Similarly, at least an additional 8GW of onshore wind and 22GW of solar would be needed.
The Financial Times quoted a “government figure” saying that next year’s auction will need to be “huge” and the biggest ever for the country:
“When you think about the long lead times for a project like an offshore wind farm it makes sense to get going with the CfDs now and throw the book at this with a huge auction round as soon as possible, probably next year…It would be the biggest we’ve seen so far.”
In addition to building that new capacity, the plan relies on significantly enhancing the electricity transmission grid that sends power around the country, reforming the planning system so that new infrastructure can be built and ensuring the supply chains and workers are in place to deliver.
In a foreword to the action plan, Stark says the wider economic benefits of meeting the target are a “prize” worth around £40bn in investment every year until 2030.
The plan describes this as “once-in-a-generation levels of energy investment” that will “spread…the economic benefits of clean energy investment throughout the UK”. It adds:
“These investments will protect electricity consumers from volatile gas prices and be the foundation of a UK energy system that can bring down consumer bills for good. Every choice we make will be scrutinised to maximise the impact it can have in reducing consumer bills.”
The plan says that the clean power plan will “provide…the foundation to build an energy system that can bring down bills for households and businesses for good.” It adds:
“In their advice, NESO set out their analysis of potential impacts of delivering clean power on electricity costs in 2030. This indicated it could be delivered with similar costs to today, with scope for lower electricity costs and bills by 2030 as wider changes are taken into account.”
Ahead of the general election, Labour had promised that its clean power plan would cut energy bills by up to £300. The opposition Conservatives have disputed this.
On the question of how it would be possible to reduce bills while building large amounts of new infrastructure, UKERC’s Gross explained on the Talking Energy podcast that instead of spending large amounts on imported fossil fuels that are burned to generate electricity, billpayers would be investing in new clean power capacity, which would be paid back over many years.
How the government plans to reach clean power 2030
Achieving the clean power 2030 target would be a major undertaking. The government’s action plan sets out its approach to delivering this across a series of key areas.
Actions include reforming and expanding the government’s auctions for new clean power capacity, significantly expanding the country’s electricity grid and speeding up the process of connecting new projects, changing the planning system so that all this new infrastructure can be consented and built, and ensuring a supply chain with skilled workers is in place to deliver it.
Grid enhancement
The action plan outlines steps to expand and improve the electricity grid, saying that a failure to strengthen it "risks holding back our energy security, economic growth and other important infrastructure with lengthy delays”.
For example, it notes that, if no action is taken to address the annual “constraint costs” caused when networks are unable to carry all of the clean power being generated to where it is needed, then those costs are projected to increase from the “already high level” of £2bn per year in 2022 to around £8bn per year (or £80 per household) by the late 2020s.
An “unprecedented expansion” is therefore needed to deliver decarbonisation, energy security and affordability, with around twice as much new transmission infrastructure needed by 2030 as has been delivered in the past decade.
To enable this, the plan sets out several key actions, including reforming the connections process, reforming regulations, improving planning and consenting, and engaging with communities.
In the last five years, the grid “connection queue” of projects waiting to hook up to the electricity network has grown tenfold. Many of the projects within the queue are speculative or do not necessarily have the funding or planning permissions to progress, the action plan notes.
It says this means that fundamental reform is needed. Work has already begun on this. For example, in November the government, together with energy regulator Ofgem, outlined a series of changes in a joint letter that would fast-track renewable, clean power and storage projects.
The action plan includes further reform to the current “first come, first served” process for the queue. The government says it will go beyond previous plans to simply remove slow or stalled projects from the queue and prioritise readiness alone.
It will now also consider technological and locational factors, remove unviable projects, re-order the queue and accelerate connection timescales, the action plan states.
In a foreword to the plan, Miliband says:
“Ultimately, we need to move fast and build things to deliver the once-in-a-generation upgrade of our energy infrastructure Britain needs.”
Following consultations with Ofgem, NESO and network companies, there are now detailed methodologies for filtering the queue and prioritising connections for strategically important plans.
These changes will take into account recommendations from both electricity networks commissioner Nick Winser’s report in 2023 – which set out recommendations to halve the connection times of projects – and NESO’s Clean Power 2030 advice, which confirmed the need for 80 new transmission grid projects to be built, if the target is to be achieved.
Additionally, the action plan notes that, wherever renewable projects can be connected to the lower-voltage local distribution systems, instead of the high-voltage national transmission grid – known as the motorways of the electricity network – this should be encouraged.
(Projects that have secured a CfD or “capacity market” contract, “nationally significant” projects and others that are considered well advanced will be included in the reformed connections queue, according to the plan.)
Beyond the connections queue, the action plan sets out regulatory reforms to support clean power by 2030. This includes amending the Strategy and Policy Statement, wherein the government’s strategic priorities for energy policy are outlined, to ensure that 2030 clean power and decarbonisation more broadly are weighted in decision making.
The government will also work with Ofgem to explore the appropriateness of tightening incentives and penalties for network operators, for the delivery of strategically important infrastructure.
To accelerate the build out of both transmission and distribution networks required for the 2030 target, planning system changes will be required. (See: Planning reforms.)
Currently, it can take between two to four years to gain land rights in England and Wales, which can “lead to unnecessary delays”, the action plan notes.
To address these processes, the action plan says that planning consent exemptions will be expanded to include low-voltage connections and upgrades.
There are also further opportunities to provide flexibilities on the consenting of electricity substations, it adds.
The final core part of action on the grid, outlined in the plan, focuses on community engagement, as “this government believes that it is a vital principle that communities that host clean energy infrastructure should benefit from it”.
This will include publishing voluntary guidance to increase the amount and consistency of community benefit funds from transmissions networks. There will also be support for the launch of a public communications campaign around grid expansion, the plan says.
Planning reforms
Since the election in July, the Labour government has taken several steps to help transition the electricity system towards net-zero.
This includes lifting the de-facto ban on onshore wind in England, which had been in place since 2015, within weeks of taking office.
Labour also approved three large solar farms in its first few weeks in government. In total, these sites – Gate Burton in Lincolnshire, Mallard Pass in Lincolnshire and Sunnica in Suffolk and Cambridgeshire – have a capacity of over 1.3GW.
Given their size, all three solar sites are considered nationally significant infrastructure projects (NSIPs), and as such require a development consent order from the energy secretary, as opposed to planning permission from the local planning authority.
One day before the action plan was released, the government published its response to a consultation on proposed changes to the National Planning Policy Framework (NPPF).
This includes plans to bring onshore wind back under the NSIP regime, in line with other types of major infrastructure. It also intends to raise the threshold above which onshore wind and solar projects will need central government NSIP consent to 100 megawatts (MW).
The government is planning to introduce legislation in the spring of 2025 to bring in these changes.
The action plan builds on these changes in an effort to improve the planning process.
It states that the planning system is “not working at the pace required” to meet the 2030 target and that this “urgent need for change” necessitates “a wide-ranging reform programme”.
To enable clean power by 2030, most new transmission grid and offshore wind projects will need all relevant planning permissions to be in place by 2026, the report notes.
While onshore wind, solar and battery energy storage projects have shorter construction timelines, they will still likely need to have received planning consent by 2028.
The report states that the government has identified pathways for delivery for “firm” generation – such as nuclear – as well as for sources of low-carbon flexibility, but does not give a date by which they must be consented.
Other changes outlined in the report include equipping organisations such as the Planning Inspectorate, statutory consultees such as the Environment Agency, local planning authorities and government consenting teams, with the “tools they need” to make decisions faster.
The report highlights that, in 2023-24, more than 60% of delayed responses to planning applications from the Environment Agency were due to resourcing constraints, and for nature regulator Natural England it was more than 80%.
It promises changes including boosting local planning capacity, expanding cost-recovery mechanisms – which see developers pay for the work needed to give them planning consent – and longer-term reforms. In particular, the changes will allow them to “better flex and prioritise their resources” so that “mission-critical projects” can be processed faster, it says.
The action plan includes updating “national policy statements” (NPSs) for energy and planning policy guidance in 2025, along with the changes to the NPPF already announced.
A programme of legislative reform will be undertaken by the government, including through the Planning and Infrastructure Bill, which will be brought forward next year. This will include NPSs being updated every five years, through a “quicker and easier process”.
Further reforms to the NSIP planning system in England and Wales will be undertaken, as well as changes to infrastructure consenting in Scotland.
(There is executive devolution in Scotland with regards to the infrastructure planning system, however under the Electricity Act, reserved to Westminster, the UK government will be able to bring in changes to deliver a “streamlined and efficient framework”, the plan says.)
The report highlights the importance of a coordinated approach to planning and notes that, to support this, NESO will deliver a “strategic spatial energy plan” in 2026, setting out a long-term approach to planning to deliver net-zero by 2050.
Under the NSIP process, the government will undertake a review of the lawfulness of challenges to development consent for major infrastructure. While judicial review is a “constitutionally important mechanism”, the action plan notes, most are unsuccessful and can take many years, significantly delaying new infrastructure and increasing costs to consumers.
As such, the plan includes a commitment to reform the judicial review process for NSIPs, following the Banner report on why such legal challenges arise.
Additional actions announced within the plan include changes to ensure communities can directly benefit from the clean energy infrastructure they host.
It notes that locally-consented energy infrastructure can take up to 12 months to receive a decision on a planning application, despite a four-month limit on projects that require an environmental impact assessment
Finally, the plan says that, by delivering a “marine recovery fund” for offshore wind, as well as using development to fund nature recovery, the government will look to use the action plan to protect nature and ensure that it is embedded in the transition to clean power by 2030.
Renewable energy auctions
The action plan announces further changes to the CfD support scheme for new renewable energy.
This follows action by the current government earlier in the year to bolster the sixth CfD auction, including increasing its budget by over 50% from the level set in March under the previous Conservative government to £1.56bn.
(The previous fifth auction, held in 2023, had not secured any new offshore wind.)
This year’s sixth auction contracted more than 130 new wind, solar and tidal energy projects, amounting to 9.6GW of capacity. Still, some cautioned at the time that a “big step-up” would still be required if the power sector is to be decarbonised by the end of the decade.
The government is introducing a number of changes to the CfDs ahead of the seventh auction, due to be held in 2025. This includes allowing onshore wind farms that are “repowering” – meaning replacing old turbines as they retire with newer models – an extension to the “phasing” process for floating offshore wind and streamlining the appeals process to take place ahead of the auction.
There is currently around 31GW of offshore wind built, under construction or contracted. However, this needs to rise to 43-50GW in 2030. (See: What clean power 2030 will look like).
The government will therefore aim to secure at least 12GW of new projects over the next two allocation rounds. To enable this, the action plan sets out further reform to the CfD process.
Changes will include a relaxation of the CfD eligibility criteria for fixed-bottom offshore wind projects to allow projects to bid even if they have not obtained full planning consent.
To avoid a repeat of the fifth auction, there will also be changes to the information the secretary of state uses to inform the final budget for fixed-bottom offshore wind.
There will also be a review of auction parameters, following “industry concerns” around the way the notional “budget” of each round is calculated.
(The “budget” for each auction round is an artificial construct, set by the government and designed to limit the impact of CfDs on consumer bills. Any support for CfD projects is paid for by billpayers rather than from government budgets. Moreover, a larger “budget” may not translate into higher bills, because CfD projects also push down wholesale electricity prices.)
Specifically, the government will look at the “reference price” against which each new CfD scheme is valued. Recent auction rounds have used very low reference prices, which inflate the notional budget impact of new projects, even if they are likely to lower consumer costs.
The government is also considering changes to the CfD contract terms to give longer market security, once the contracts are awarded. This could see the length of the contracts increased from the current 15-year standard term.
Consultations will take place in early 2025, ahead of the seventh allocation round, with a view to implementing them in the summer of 2025.
Beyond the CfD reforms, the action plan includes a number of commitments to improve renewable energy project delivery. These include facilitating greater coordination between wind turbines, civil aviation and defence infrastructure.
Further detail on Great British Energy’s (GBE) project development is included, including promises that the state-owned energy company – a core part of the Labour manifesto – will align its projects on private land with NESOs location suggestions, and develop further projects on public land.
The action plan states that GBE will provide support to deliver the Local Power Plan, to put “local authorities and communities at the heart of restructuring our energy economy”. Additional work will be done to support the deployment of rooftop solar, assess the potential of solar “canopies” on outdoor carparks and support programmes such as the Warm Homes Local Grant.
First introduced in 2002, the UK-wide renewables obligation (RO) scheme currently supports around 30% of the UK’s electricity supply. From 2027, it will start to come to an end, with around 9GW of capacity reaching the end of the subsidy by December 2030.
The action plan commits the government to conduct further analysis to inform the possible policy options needed to manage the risk that RO-supported projects might stop operating.
For the work being undertaken on renewables and nuclear, the action plan includes a list of key upcoming milestones, including:
- Spring 2025: Solar Roadmap and the Onshore Wind Industry Taskforce report.
- Early 2025: Consultation on relevant reforms to the CfD scheme.
- “In due course”: Consultation response on the Future Homes and Buildings Standards.
- After the spending review: Further details on the Warm Homes Plan.
- In 2025: A call for evidence on the potential to drive solar canopies on carparks.
- “In due course”: Consultation response on transitional support for large-scale biomass.
Flexibility and ‘dispatchable’ clean power
Beyond renewables, the plan includes a number of actions to reform the electricity market to support energy security, through flexibility and “dispatchable” power.
As with the other core areas, the government has taken a number of actions in its first six months to support this, including signing the contracts for the first gas CCS project in the UK.
French utility firm EDF has also announced plans to keep four existing nuclear power stations open for longer, meaning 4.6GW of nuclear capacity will remain on the grid in 2030.
The action plan includes support for investor certainty through wholesale electricity market reforms, reforming the capacity market and accelerating reforms to the balancing markets through which supply and demand are matched in real time, which it says will help unlock consumer-led flexibility. It notes:
“While the state must play a role as system architect, markets are, and will remain, central to the development, delivery, and operation of the power system.”
The action plan promises to set a clear “direction of travel” for wholesale market reform. As part of this, it is continuing to conduct further analysis as part of the long-running review of electricity market arrangements (REMA), which began in 2022 under the previous government. The action plan says that its work so far has made clear that “no change” is not an option.
The government says it will conclude the REMA process by “around mid-2025”, including whether to bring in “zonal pricing” or whether electricity prices will continue to be set at national level.
Currently, Britain uses a national pricing system whereby generators are paid the same regardless of where they are. Zonal pricing is a form of “locational pricing” that would see the country divided into zones, in an effort to reduce grid constraints and energy costs.
In order to avoid any changes affecting the investment needed in new clean power capacity, the government pledges to “align” the process with the next CfD auction. It also flags the potential for “transitional or legacy arrangements” that could protect existing investments from future changes:
“We plan, therefore, to announce the final decisions on REMA and the timetable for their implementation, particularly in relation to wholesale market reform and any transitional or legacy arrangements, before the AR7 auctions open, giving investors clarity for prospective bids.”
Other actions include NESO promising an electricity system operability strategy for 2030, improved forecasting of medium to long-term grid operability needs and improved emissions reporting from NESO across all electricity markets.
To support greater flexibility in the electricity system, the government plans to publish a “low carbon flexibility roadmap” in 2025. This will consolidate existing and future actions to drive short and long-duration flexibility.
Currently, there is 4.5GW of battery storage in Great Britain, the majority of which is grid-scale assets. By 2030, 23-27GW of battery storage is expected to be needed to meet the demands of a clean power system.
The action plan includes specific measures to overcome “hurdles” in the rollout of battery storage, such as working with Ofgem to ease network connections. (See: Grid enhancement.)
It says it will bring in incremental market reforms to provide batteries and consumer-led flexibility with access to relevant markets. This could include, for example, households shifting demand from electric vehicle charging at home, to use abundant renewable generation late at night instead of during peak hours when the grid is strained.
To support this, the action plan suggests enhancing rewards for consumers who choose to participate in flexibility, as well as the need for changes to market access for flexibility providers and support for the rollout of smart appliances.
Finally, work will be undertaken to enable portfolios of projects and activities to deliver consumer-led flexibility. Among other things, this builds on the rollout of the demand flexibility mechanism, whereby households are paid to reduce energy consumption during tight periods.
The action plan identifies the need for further long-duration flexibility technologies and announces support for the development of a hydrogen power business model to derisk investment and speed up the rate of deployment.
Additionally, Ofgem will introduce a “cap and floor scheme” to support investment in long-duration electricity storage. It says it is aiming to publish an open letter on specific aspects of the scheme soon, and in the first quarter of next year, DESNZ and Ofgem will publish the technical decisions undertaken to provide clarity on any outstanding areas of its design.
NESO has agreed to provide further advice as to the range of technologies needed. The scheme is expected to open to applications in the second quarter of next year.
The post Analysis: How the UK plans to reach clean power by 2030 appeared first on Carbon Brief.
In 2026, the dangers of fossil fuel dependence have been laid bare like never before. The illegal invasion of Iran has brought pain and destruction to millions across the Middle East and triggered a global energy crisis impacting us all. Communities in the Pacific have been hit especially hard by rising fuel prices, and Australians have seen their cost-of-living woes deepen.
Such moments of crisis and upheaval can lead to positive transformation. But only when leaders act with courage and foresight.
There is no clearer statement of a government’s plans and priorities for the nation than its budget — how it plans to raise money, and what services, communities, and industries it will invest in.
As we count down the days to the 2026-27 Federal Budget, will the Albanese Government deliver a budget for our times? One that starts breaking the shackles of fossil fuels, accelerates the shift to clean energy, protects nature, and sees us work together with other countries towards a safer future for all? Or one that doubles down on coal and gas, locks in more climate chaos, and keeps us beholden to the whims of tyrants and billionaires.
Here’s what we think the moment demands, and what we’ll be looking out for when Treasurer Jim Chalmers steps up to the dispatch box on 12 May.
1. Stop fuelling the fire
2. Make big polluters pay
3. Support everyone to be part of the solution
4. Build the industries of the future
5. Build community resilience
6. Be a better neighbour
7. Protect nature
1. Stop fuelling the fire
In mid-April, Pacific governments and civil society met to redouble their efforts towards a Fossil Fuel Free Pacific. Moving beyond coal, oil and gas is fundamental to limiting warming to 1.5°C — a survival line for vulnerable communities and ecosystems. And as our Head of Pacific, Shiva Gounden, explained, it is “also a path of liberation that frees us from expensive, extractive and polluting fossil fuel imports and uplifts our communities”.
Pacific countries are at the forefront of growing global momentum towards a just transition away from fossil fuels, and it is way past time for Australia to get with the program. It is no longer a question of whether fossil fuel extraction will end, but whether that end will be appropriately managed and see communities supported through the transition, or whether it will be chaotic and disruptive.
So will this budget support the transition away from fossil fuels, or will it continue to prop up coal and gas?
When it comes to sensible moves the government can make right now, one stands out as a genuine low hanging fruit. Mining companies get a full rebate of the excise (or tax) that the rest of us pay on diesel fuel. This lowers their operating costs and acts as a large, ongoing subsidy on fossil fuel production — to the tune of $11 billion a year!
Greenpeace has long called for coal and gas companies to be removed from this outdated scheme, and for the billions in savings to be used to support the clean energy transition and to assist communities with adapting to the impacts of climate change. Will we see the government finally make this long overdue change, or will it once again cave to the fossil fuel lobby?
2. Make big polluters pay
While our communities continue to suffer the escalating costs of climate-fuelled disasters, our Government continues to support a massive expansion of Australia’s export gas industry. Gas is a dangerous fossil fuel, with every tonne of Australian gas adding to the global heating that endangers us all.
Moreover, companies like Santos and Woodside pay very little tax for the privilege of digging up and selling Australians’ natural endowment of fossil gas. Remarkably, the Government currently raises more tax from beer than from the Petroleum Resource Rent Tax (PRRT) — the main tax on gas profits.
Momentum has been building to replace or supplement the PRRT with a 25% tax on gas exports. This could raise up to $17 billion a year — funds that, like savings from removing the diesel tax rebate for coal and gas companies, could be spent on supporting the clean energy transition and assisting communities with adapting to worsening fires, floods, heatwaves and other impacts of climate change.
As politicians arrive in Canberra for budget week, they will be confronted by billboards calling for a fair tax on gas exports. The push now has the support of dozens of organisations and a growing number of politicians. Let’s hope the Treasurer seizes this rare window for reform.
3. Support everyone to be part of the solution
As the price of petrol and diesel rises, electric vehicles (EVs) are helping people cut fuel use and save money. However, while EV sales have jumped since the invasion of Iran sent fuel prices rising, they still only make up a fraction of total new car sales. This budget should help more Australians switch to electric vehicles and, even more importantly, enable more Australians to get around by bike, on foot, and on public transport. This means maintaining the EV discount, investing in public and active transport, and removing tax breaks for fuel-hungry utes and vans.
Millions of Australians already enjoy the cost-saving benefits of rooftop solar, batteries, and getting off gas. This budget should enable more households, and in particular those on lower incomes, to access these benefits. This means maintaining the Cheaper Home Batteries Program, and building on the Household Energy Upgrades Fund.
4. Build the industries of the future
If we’re to transition away from fossil fuels, we need to be building the clean industries of the future.
No state is more pivotal to Australia’s energy and industrial transformation than Western Australia. The state has unrivaled potential for renewable energy development and for replacing fossil fuel exports with clean exports like green iron. Such industries offer Western Australia the promise of a vibrant economic future, and for Australia to play an outsized positive role in the world’s efforts to reduce emissions.
However, realising this potential will require focussed support from the Federal Government. Among other measures, Greenpeace has recommended establishing the Australasian Green Iron Corporation as a joint venture between the Australian and Western Australian governments, a key trading partner, a major iron ore miner and steel makers. This would unite these central players around the complex task of building a large-scale green iron industry, and unleash Western Australia’s potential as a green industrial powerhouse.
5. Build community resilience
Believe it or not, our Government continues to spend far more on subsidising fossil fuel production — and on clearing up after climate-fuelled disasters — than it does on helping communities and industries reduce disaster costs through practical, proven methods for building their resilience.
Last year, the Government estimated that the cost of recovery from disasters like the devastating 2022 east coast floods on 2019-20 fires will rise to $13.5 billion. For contrast, the Government’s Disaster Ready Fund – the main national source of funding for disaster resilience – invests just $200 million a year in grants to support disaster preparedness and resilience building. This is despite the Government’s own National Emergency Management Agency (NEMA) estimating that for every dollar spent on disaster risk reduction, there is a $9.60 return on investment.
By redirecting funds currently spent on subsidising fossil fuel production, the Government can both stop incentivising climate destruction in the first place, and ensure that Australian communities and industries are better protected from worsening climate extremes.
No communities have more to lose from climate damage, or carry more knowledge of practical solutions, than Aboriginal and Torres Strait Islander peoples. The budget should include a dedicated First Nations climate adaptation fund, ensuring First Nations communities can develop solutions on their own terms, and access the support they need with adapting to extreme heat, coastal erosion and other escalating challenges.
6. Be a better neighbour
The global response to climate change depends on the adequate flow of support from developed economies like Australia to lower income nations with shifting to clean energy, adapting to the impacts of climate change, and addressing loss and damage.
Such support is vital to building trust and cooperation, reducing global emissions, and supporting regional and global security by enabling countries to transition away from fossil fuels and build greater resilience.
Despite its central leadership role in this year’s global climate negotiations, our Government is yet to announce its contribution to international climate finance for 2025-2030. Greenpeace recommends a commitment of $11 billion for this five year period, which is aligned with the global goal under the Paris Agreement to triple international climate finance from current levels.
This new commitment should include additional funding to address loss and damage from climate change and a substantial contribution to the Pacific Resilience Facility, ensuring support is accessible to countries and communities that need it most. It should also see Australia get firmly behind the vision of a Fossil Fuel Free Pacific.
7. Protect nature
There is no safe planet without protection of the ecosystems and biodiversity that sustain us and regulate our climate.
Last year the Parliament passed important and long overdue reforms to our national environment laws to ensure better protection for our forests and other critical ecosystems. However, the Government will need to provide sufficient funding to ensure the effective implementation of these reforms.
Greenpeace has recommended $500 million over four years to establish the National Environment Agency — the body responsible for enforcing and monitoring the new laws — and a further $50 million to Environment Information Australia for providing critical information and tools.
Further resourcing will also be required to fulfil the crucial goal of fully protecting 30% of Australian land and seas by 2030. This should include $1 billion towards ending deforestation by enabling farmers and loggers to retool away from destructive practices, $2 billion a year for restoring degraded lands, $5 billion for purchasing and creating new protected areas, and $200 million for expanding domestic and international marine protected areas.
Conclusion
This is not the first time that conflict overseas has triggered an energy crisis, or that a budget has been preceded by a summer of extreme weather disasters, highlighting the urgent need to phase out fossil fuels. What’s different in 2026 is the availability of solutions. Renewable energy is now cheaper and more accessible than ever before. Global momentum is firmly behind the transition away from fossil fuels. The Albanese Government, with its overwhelming majority, has the chance to set our nation up for the future, or keep us stranded in the past. Let’s hope it makes some smart choices.
The 2026 budget test: Will Australia break free from fossil fuels?
Anne Jellema is Executive Director of 350.org.
The war on Iran and Lebanon is a deeply unjust and devastating conflict, killing civilians at home, destroying lives, and at the same time sending shockwaves through the global economy. We, at 350.org, have calculated, drawing on price forecasts from the International Monetary Fund (IMF) and Goldman Sachs, just how much that volatility is costing us.
Even under the IMF’s baseline scenario – a de facto “best case” scenario with a near-term end to the war and related supply chain disruptions – oil and gas price spikes are projected to cost households and businesses globally more than $600 billion by the end of the year. Under the IMF’s “adverse scenario”, with prolonged conflict and sustained price pressures, we estimate those additional costs could exceed $1 trillion, even after accounting for reduced demand.
Which is why we urgently need a power shift. Governments are under growing pressure to respond to rising fuel and food costs and deepening energy poverty. And it’s becoming clearer to both voters and elected officials that fossil dependence is not only expensive and risky, but unnecessary.
People who can are voting with their wallets: sales of solar panels and electric vehicles are increasing sharply in many countries. But the working people who have nothing to spare, ironically, are the ones stuck with using oil and gas that is either exorbitantly expensive or simply impossible to get.
Drain on households and economies
In India, street food vendors can’t get cooking gas and in the Philippines, fishermen can’t afford to take their boats to sea. A quarter of British people say that rising energy tariffs will leave them completely unable to pay their bills. This is the moment for a global push to bring abundant and affordable clean energy to all.
In April, we released Out of Pocket, our new research report on how fossil fuels are draining households and economies. We were surprised by the scale of what we found. For decades, governments have reassured people that energy price spikes are unfortunate but unavoidable – the result of distant conflicts, market forces or geopolitical shocks beyond anyone’s control. But the numbers tell a different story.
-
Santa Marta: Ministers grapple with practicalities of fossil fuel phase-out
Around 60 governments that want to make progress on transitioning away from coal, oil and gas are meeting in Colombia to work out how they can do it an equitable way -
Why the transition beyond fossil fuels depends on cities and collective action
Cities will help identify concrete pathways for an equitable shift to clean energy at the Santa Marta conference, with C40 members aiming to halve their fossil fuel use by 2030
What we are living through today is not an energy crisis. It is a fossil fuel crisis. In just the first 50 days of the Middle East conflict, soaring oil and gas prices have siphoned an estimated $158 billion–$166 billion from households and businesses worldwide. That is money extracted directly from people’s pockets and transferred, almost instantly, into fossil fuel company balance sheets. And this figure only captures the immediate impact of price spikes, not the permanent economic drain of fossil dependence. Fossil fuels don’t just cost us once, they cost us over and over again.
First, through our bills. Every time there is a war, an embargo or a supply disruption, fossil fuel prices surge. For ordinary people, this means higher costs for energy, transport and food. Many Global South countries have little or no fiscal space to buffer the shock; instead, workers and families pay the price.
Second, through our taxes. Governments around the world continue to pour vast sums of public money into fossil fuel subsidies. These are often justified as a way to protect the most vulnerable at the petrol pump or in their homes. But in reality, the benefits are overwhelmingly captured by wealthier households and corporations. The poorest 20% receive just a fraction of this support, while public finances are drained.
Third, through climate impacts. New research across more than 24,000 global locations gives a granular account of the true costs of extreme heat, sea level rise and falling agricultural yields. Using this data to update IMF modelling of the social cost of carbon, we found that fossil fuel impacts on health and livelihoods amount to over $9 trillion a year. This is the biggest subsidy of all, because these massive and mounting costs are not charged to Big Oil – they are paid for by governments and households, with the poorest shouldering the lion’s share.
Massive transfer of wealth to fossil fuel industry
Adding up direct subsidies, tax breaks and the unpaid bill for climate damages, the total transfer of wealth from the public to the fossil fuel industry amounts to $12 trillion even in a “normal” year without a global oil shock. That’s more than 50% higher than the IMF has previously estimated, and equivalent to a staggering $23 million a minute.
The fossil fuel industry has become extraordinarily adept at profiting from instability. When conflict drives up prices, companies do not lose, they gain. In the current crisis, oil producers and commodity traders are on track to secure tens of billions of dollars in additional windfall profits, even as households face rising bills and governments struggle to manage the fallout.
Fossil fuel crisis offers chance to speed up energy transition, ministers say
This growing disconnect is impossible to ignore. Investors are advised to buy into fossil fuel firms precisely because of their ability to generate profits in times of crisis. Meanwhile, ordinary people are told to tighten their belts.
In 2026, unlike during the oil shocks of the 1970s, clean energy is no longer a distant alternative. Now, even more than when gas prices spiked due to Russia’s invasion of Ukraine in 2022, renewables are often the cheapest option available. Solar and wind can be deployed quickly, at scale, and without the volatility that defines fossil fuel markets.
How to transition from dirty to clean energy
The solutions are clear. Governments must implement permanent windfall taxes on fossil fuel companies to ensure that extraordinary profits generated during crises are redirected to support households. These revenues can be used to reduce energy bills, invest in public services, and accelerate the rollout of clean energy.
Second, we must shift subsidies away from fossil fuels and towards renewable solutions, particularly those that can be deployed quickly and equitably, such as rooftop and community solar. This is not just about cutting emissions. It is about building a more stable, fair and resilient energy system.
Finally, we need binding plans to phase out fossil fuels altogether, replacing them with homegrown renewable energy that can shield economies from future shocks. Because what the current crisis has made clear is this: as long as we remain dependent on fossil fuels, we remain vulnerable – to conflict, to price volatility and to the escalating impacts of climate change.
The true price of fossil fuels is no longer hidden. It is visible in rising bills, strained public finances and communities pushed to the brink. And it is being paid, every day, by ordinary people around the world.
It’s time for the great power shift.
Full details on the methodology used for this report are available here.
The Great Power Shift is a new campaign by 350.org global campaign to pressure governments to bring down energy bills for good by ending fossil fuel dependence and investing in clean, affordable energy for all
The post What fossil fuels really cost us in a world at war appeared first on Climate Home News.
Computer models that use artificial intelligence (AI) cannot forecast record-breaking weather as well as traditional climate models, according to a new study.
It is well established that AI climate models have surpassed traditional, physics-based climate models for some aspects of weather forecasting.
However, new research published in Science Advances finds that AI models still “underperform” in forecasting record-breaking extreme weather events.
The authors tested how well both AI and traditional weather models could simulate thousands of record-breaking hot, cold and windy events that were recorded in 2018 and 2020.
They find that AI models underestimate both the frequency and intensity of record-breaking events.
A study author tells Carbon Brief that the analysis is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
AI weather forecasts
Extreme weather events, such as floods, heatwaves and storms, drive hundreds of billions of dollars in damages every year through the destruction of cropland, impacts on infrastructure and the loss of human life.
Many governments have developed early warning systems to prepare the general public and mobilise disaster response teams for imminent extreme weather events. These systems have been shown to minimise damages and save lives.
For decades, scientists have used numerical weather prediction models to simulate the weather days, or weeks, in advance.
These models rely on a series of complex equations that reproduce processes in the atmosphere and ocean. The equations are rooted in fundamental laws of physics, based on decades of research by climate scientists. As a result, these models are referred to as “physics-based” models.
However, AI-based climate models are gaining popularity as an alternative for weather forecasting.
Instead of using physics, these models use a statistical approach. Scientists present AI models with a large batch of historical weather data, known as training data, which teaches the model to recognise patterns and make predictions.
To produce a new forecast, the AI model draws on this bank of knowledge and follows the patterns that it knows.
There are many advantages to AI weather forecasts. For example, they use less computing power than physics-based models, because they do not have to run thousands of mathematical equations.
Furthermore, many AI models have been found to perform better than traditional physics-based models at weather forecasts.
However, these models also have drawbacks.
Study author Prof Sebastian Engelke, a professor at the research institute for statistics and information science at the University of Geneva, tells Carbon Brief that AI models “depend strongly on the training data” and are “relatively constrained to the range of this dataset”.
In other words, AI models struggle to simulate brand new weather patterns, instead tending forecast events of a similar strength to those seen before. As a result, it is unclear whether AI models can simulate unprecedented, record-breaking extreme events that, by definition, have never been seen before.
Record-breaking extremes
Extreme weather events are becoming more intense and frequent as the climate warms. Record-shattering extremes – those that break existing records by large margins – are also becoming more regular.
For example, during a 2021 heatwave in north-western US and Canada, local temperature records were broken by up to 5C. According to one study, the heatwave would have been “impossible” without human-caused climate change.
The new study explores how accurately AI and physics-based models can forecast such record-breaking extremes.
First, the authors identified every heat, cold and wind event in 2018 and 2020 that broke a record previously set between 1979 and 2017. (They chose these years due to data availability.) The authors use ERA5 reanalysis data to identify these records.
This produced a large sample size of record-breaking events. For the year 2020, the authors identified around 160,000 heat, 33,000 cold and 53,000 wind records, spread across different seasons and world regions.
For their traditional, physics-based model, the authors selected the High RESolution forecast model from the Integrated Forecasting System of the European Centre for Medium-Range Weather Forecasts. This is “widely considered as the leading physics-based numerical weather prediction model”, according to the paper.
They also selected three “leading” AI weather models – the GraphCast model from Google Deepmind, Pangu-Weather developed by Huawei Cloud and the Fuxi model, developed by a team from Shanghai.
The authors then assessed how accurately each model could forecast the extremes observed in the year 2020.
Dr Zhongwei Zhang is the lead author on the study and a researcher at Karlsruhe Institute of Technology. He tells Carbon Brief that many AI weather forecast models were built for “general weather conditions”, as they use all historical weather data to train the models. Meanwhile, forecasting extremes is considered a “secondary task” by the models.
The authors explored a range of different “lead times” – in other words, how far into the future the model is forecasting. For example, a lead time of two days could mean the model uses the weather conditions at midnight on 1 January to simulate weather conditions at midnight on 3 January.
The plot below shows how accurately the models forecasted all extreme events (left) and heat extremes (right) under different lead times. This is measured using “root mean square error” – a metric of how accurate a model is, where a lower value indicates lower error and higher accuracy.
The chart on the left shows how two of the AI models (blue and green) performed better than the physics-based model (black) when forecasting all weather across the year 2020.
However, the chart on the right illustrates how the physics-based model (black) performed better than all three AI models (blue, red and green) when it came to forecasting heat extremes.
The authors note that the performance gap between AI and physics-based models is widest for lower lead times, indicating that AI models have greater difficulty making predictions in the near future.
They find similar results for cold and wind records.
In addition, the authors find that AI models generally “underpredict” temperature during heat records and “overpredict” during cold records.
The study finds that the larger the margin that the record is broken by, the less well the AI model predicts the intensity of the event.
‘Warning shot’
Study author Prof Erich Fischer is a climate scientist at ETH Zurich and a Carbon Brief contributing editor. He tells Carbon Brief that the result is “not unexpected”.
He adds that the analysis is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
The analysis, he continues, is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
AI models are likely to continue to improve, but scientists should “not yet” fully replace traditional forecasting models with AI ones, according to Fischer.
He explains that accurate forecasts are “most needed” in the runup to potential record-breaking extremes, because they are the trigger for early warning systems that help minimise damages caused by extreme weather.
Leonardo Olivetti is a PhD student at Uppsala University, who has published work on AI weather forecasting and was not involved in the study.
He tells Carbon Brief that “many other studies” have identified issues with using AI models for “extremes”, but this paper is novel for its specific focus on extremes.
Olivetti notes that AI models are already used alongside physics-based models at “some of the major weather forecasting centres around the world”. However, the study results suggest “caution against relying too heavily on these [AI] models”, he says.
Prof Martin Schultz, a professor in computational earth system science at the University of Cologne who was not involved in the study, tells Carbon Brief that the results of the analysis are “very interesting, but not too surprising”.
He adds that the study “justifies the continued use of classical numerical weather models in operational forecasts, in spite of their tremendous computational costs”.
Advances in forecasting
The field of AI weather forecasting is evolving rapidly.
Olivetti notes that the three AI models tested in the study are an “older generation” of AI models. In the last two years, newer “probabilistic” forecast models have emerged that “claim to better capture extremes”, he explains.
The three AI models used in the analysis are “deterministic”, meaning that they only simulate one possible future outcome.
In contrast, study author Engelke tells Carbon Brief that probabilistic models “create several possible future states of the weather” and are therefore more likely to capture record-breaking extremes.
Engelke says it is “important” to evaluate the newer generation of models for their ability to forecast weather extremes.
He adds that this paper has set out a “protocol” for testing the ability of AI models to predict unprecedented extreme events, which he hopes other researchers will go on to use.
The study says that another “promising direction” for future research is to develop models that combine aspects of traditional, physics-based weather forecasts with AI models.
Engelke says this approach would be “best of both worlds”, as it would combine the ability of physics-based models to simulate record-breaking weather with the computational efficiency of AI models.
Dr Kyle Hilburn, a research scientist at Colorado State University, notes that the study does not address extreme rainfall, which he says “presents challenges for both modelling and observing”. This, he says, is an “important” area for future research.
The post Traditional models still ‘outperform AI’ for extreme weather forecasts appeared first on Carbon Brief.
Traditional models still ‘outperform AI’ for extreme weather forecasts
-
Climate Change9 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases9 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Renewable Energy6 months agoSending Progressive Philanthropist George Soros to Prison?
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits
-
Renewable Energy2 years ago
GAF Energy Completes Construction of Second Manufacturing Facility