Great British Energy will be a £100bn-plus gamechanger – if Labour can get it right

Labour needs to avoid spreading public money too thinly if it is to succeed in bringing in vast amounts of private investment into green energy

The UK has been going through a green-energy transition from fossil fuels to renewables. Labour have promised to accelerate this, partly by creating a publicly owned company, Great British Energy, based in Scotland.

The Labour manifesto promised to “work with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030”. They also pledged to invest in carbon-capture-and-storage (CCS), hydrogen, marine energy and energy storage.

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But what is Great British Energy? When first revealed, Labour said that it would reduce people’s energy bills, so many assumed that it would be an energy company from which you could buy electricity. Instead, they now say it is going to be a co-investor in new and existing energy technologies, and it will help encourage community renewables.

Keir Starmer on a visit to the St Fergus Gas Terminal in Aberdeenshire last November with Scottish Labour leader Anas Sarwar and Energy Secretary Ed Miliband (Picture: Jeff J Mitchell/Getty Images)Keir Starmer on a visit to the St Fergus Gas Terminal in Aberdeenshire last November with Scottish Labour leader Anas Sarwar and Energy Secretary Ed Miliband (Picture: Jeff J Mitchell/Getty Images)
Keir Starmer on a visit to the St Fergus Gas Terminal in Aberdeenshire last November with Scottish Labour leader Anas Sarwar and Energy Secretary Ed Miliband (Picture: Jeff J Mitchell/Getty Images)

There will be £8.3 billion in public funding over the next parliament, with plans to lever in vast amounts of private investment. A RenewableUK report concluded over £100bn of private investment would be needed to deliver Labour’s offshore wind target alone.

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Not enough jam

Scotland was promised a publicly owned energy company, which would generate electricity from renewables and sell this electricity to households, by the Scottish Government back in 2017. After spending over £500,000 on consultants, the government concluded that this model was not viable. The commitment was transferred into the creation of an energy agency – due to be fully up and running in September next year, concentrating on decarbonising heating.

Great British Energy is spreading its ambitions too wide. That £8.3bn might sound like a lot of money but it’s less than a fifth of the cost of one new nuclear power station. That money might go a long way if it was just helping to accelerate the deployment of wind, wave, tidal and solar renewable energy technologies. But also trying to back new nuclear reactors, CCS, and hydrogen production will spread the jam very thinly indeed.

The UK Government has run two “competitions” to get CCS working on a power station. Both of these promised £1bn of public money. Both ended in failure.

Nuclear is too expensive

Labour’s obsession with nuclear power comes from the unions, but nuclear is the last thing you should invest in if you want to reduce people’s bills and cut climate emissions. It is too expensive and takes much too long to start generating. We’ll all be paying higher electricity bills for the new 35 years because of the deal the UK Government did to get the Hinkley reactors built. Renewable energy and energy-efficiency are much better investments to quickly deliver on bills and climate.

The under-construction Hinckley Point reactors are 12 years late and will probably cost £46bn compared to the original estimate of £5.6bn. Yet Labour wants to also build at least the proposed reactors at Sizewell and so-called small modular reactors. The last UK Government promised hundreds of millions for these, even though the industry admits they would not be with us until the mid-2030s and will not be cheap. Yet Labour will support their introduction, including in Scotland.

Great British Energy could do great things for renewables, but the danger is that it will be mired in political arguments and squander much of its resources on nuclear power and CCS, disabling it before it gets properly started.

Dr Richard Dixon is an environmental campaigner and consultant

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