UK appoints new energy minister ahead of COP26, amid soaring power, gas prices

UK Prime Minister Boris Johnson has appointed Greg Hands as the new minister of state for energy at the Department for Business, Energy and Industrial Strategy (BEIS), replacing Anne-Marie Trevelyan in a government reshuffle Sept. 16.

Hands will take over the role just two months ahead of the critical COP26 global climate talks in Glasgow in November, and his appointment comes amid soaring UK power and gas prices and unprecedented volatility in the market.

UK day-ahead baseload power was assessed by S&P Global Platts Sept. 16 at GBP185.00/MWh ($254.94/MWh), down from GBP480.00/MWh the previous day.

UK spot gas, meanwhile, was assessed at 171 pence/therm Sept. 15, up 6 p/th day on day following an unscheduled outage on the IFA power link to France.

BEIS could not immediately confirm whether Hands' responsibilities would remain the same as those Trevelyan had.

Trevelyan was minister for energy, clean growth and climate change, with responsibility across energy retail and wholesale markets and networks, carbon budgets, low carbon generation and security of supply, among other areas.

Hands was previously minister of state for trade policy in the Department for International Trade (DIT) from February 2020 to September 2021 and minister of state at DIT from 2016 to 2018.

"Trade was a great role, but so is minister of state at the Department for Business, Energy and Industrial Strategy," Hands said on Twitter. "Energy, clean growth and climate change -- some of the biggest challenges and opportunities for the government as we approach COP26."

Kwasi Kwarteng remains in position as secretary of state for business, energy and industrial strategy.

Some of the near-term challenges Hands will face include providing further detail for the UK's hydrogen strategy around business models and measuring carbon intensity, justifying a likely increase in the default retail tariff and securing sufficient offshore wind capacity in an upcoming contract for differences auction to get on track with a 40 GW target by 2030.

Hands comes with experience in the trade and finance sector, having spent eight years trading and marketing fixed income derivatives in London and New York before becoming an MP.