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What does a hung parliament mean for the UK energy industry?

While we’ve had a few unanticipated results to elections in recent times, the outcome of the 2017 General Election will still have come as a shock to many. We now have a hung parliament, with the Conservatives winning the most seats but failing to secure the overall majority they need to form a government.

With even more uncertainty added to a political environment that was already turbulent, there will be concerns about how this result will affect UK businesses. Here we take a look at what it could mean for our energy industry.

What will happen next?

Both the Conservatives and the Labour Party, which finished second, were given the opportunity to put together a new government. One of the ways that they could achieve this was by forming a coalition with another party (or other parties) to take them over the threshold needed to gain a majority. The other option for the two parties was to run a minority government and rely on smaller parties for support to get their laws passed.

The Conservatives have announced their plans to form a minority government, with support from Northern Ireland’s Democratic Unionist Party (DUP). However, the government won’t be confirmed until MPs hold a vote of confidence on 19th June. In the meantime, the Labour party have indicated that they will be working to form their own minority government.

How will the result affect the energy industry in the UK? 

Whether it’s the Conservatives’ or Labour’s government that receives the vote of confidence, it’s likely that the winning party will need to compromise on some of their policies in order to appease and gain the backing they need from other parties. So how could a minority government affect the UK’s energy policies?

Energy prices

The price of energy is one area that is likely to see similar action regardless of which party holds the power. Both the Conservatives and Labour have plans to lower energy bills, with Labour proposing an emergency price cap and the Conservatives looking to commission an independent review into energy costs.

They should receive support from the other parties, as the DUP, Liberal Democrats, SNP and the Green Party have all stated their intentions to reduce energy costs as well – so while the method of doing so will vary according to the winning party, businesses can expect to see the cost of energy addressed by the next government.


If the Conservatives want the support of the DUP, they may find that they need a greater focus on renewable energy. In their manifesto, the Conservatives say that they’re more interested in the ends – reliable and affordable energy – than the way it’s generated, and they only plan to back more wind farms on remote Scottish islands. While renewables aren’t at the forefront of the DUP’s manifesto, they do have plans for a new energy strategy, including a review to find the most affordable way to develop the renewable sector.

A Labour government, on the other hand, won’t find it hard to garner support for their ambitious renewable targets, such as ensuring that 60% of the UK’s energy comes from zero-carbon or renewable sources by 2030. The Liberal Democrats have their own goal of 60% of electricity to come from renewables by 2030, and renewable energy is a key priority for the Green Party, which plans to move the coal phaseout date forward to 2023. The SNP also support renewables – they exceeded their target of reducing energy consumption by 12% by 2020 seven years early.


The Brexit deal will have a significant impact on the UK’s energy industry, particularly when it comes to remaining in the internal energy market and continuing the environmental commitments we’ve made as members of the EU.

Theresa May has been pursuing a ‘hard Brexit’ and she has been clear in her plans to leave the single market if necessary, although the Conservatives do plan to convert all current EU environmental legislation into British law. The DUP may be ambivalent about the environmental laws – their manifesto doesn’t mention the environment at all – but they’re unlikely to support a hard Brexit as they’re opposed to any hardening of the border between Northern Ireland and the Republic of Ireland.

Labour, the Lib Dems, the Green Party and the SNP are all also in favour of a soft Brexit. They have all pledged to uphold the current EU environmental protections, although Labour and the SNP are the only parties that have stated plans to remain in the internal energy market.

Community energy

One of the key features of Labour’s energy policy is to take back control of the UK’s energy and water infrastructure, and they plan to do this by creating and supporting publicly-owned energy companies. Whether other parties will support them in the re-nationalisation of the energy industry is uncertain, but the Liberal Democrats and the Green Party are likely to support their proposal for community energy schemes as they have similar plans of their own.

There’s no mention of community energy schemes or renationalisation in any of the manifestos from the Conservatives, the SNP and the DUP.

Looking ahead…

As it stands, it seems most likely that the Conservatives will remain in government with a minority. Without the security of a majority win, the UK’s political climate is set to remain volatile – there have been calls for Theresa May to resign, and it’s possible that we could see another general election called within the next few months. Unfortunately, this means that businesses are unlikely to get the certainty they need when it comes to the future of the UK’s energy industry.

If you’re concerned about how the election result will affect your business energy, or you’d like some advice on how to boost your energy strategy in a changing market, talk to Inenco’s team of experts today on 08451 46 36 26 or email