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Labour pledges to cut bills and boost clean power with Great British Energy 

Labour’s first priority for the proposed GB Energy would be to co-invest in nascent renewable energy technologies such as floating offshore wind, tidal power and hydrogen © Chris Ratcliffe/Bloomberg
Labour’s first priority for the proposed GB Energy would be to co-invest in nascent renewable energy technologies such as floating offshore wind, tidal power and hydrogen © Chris Ratcliffe/Bloomberg

Labour plans to set up a publicly owned energy company working with the private sector to deliver cost and emissions savings

The UK government’s main opposition party has unveiled plans for its Great British Energy policy, pledging to “get working within months to build clean power across the UK” and “cut energy bills for good”, should it win the general election on July 4.

If elected, the publicly owned GB Energy would pursue three priorities in partnership with the private sector, says the GB Energy website.

First, it intends to co-invest in nascent renewable energy technologies such as floating offshore wind, tidal power and hydrogen.

Second, it would look to scale up more established renewable energy sources, including wind and solar, and “build organisational capability and expertise” for “energy megaprojects like nuclear power stations”.

GB Energy’s third initial priority would be to work with energy companies, local authorities and co-operatives to develop small and medium-scale community energy projects, with profits to be funnelled back into local communities in order to cut bills. In April, non-profit Common Wealth urged Labour to increase its support for community-owned energy providers via its “local power plan”.

“An exciting aspect of GB Energy is the local power plan, where local authorities and mayors will have access to billions to build clean energy in their neighbourhoods,” said Chaitanya Kumar, head of environment and green transition at the New Economics Foundation think-tank. 

“If done right, this has the potential to address the highly regressive distribution of energy costs across households,” he told Sustainable Views.

GB Energy would be funded by “a proper windfall tax” on oil and gas companies and capitalised with an initial £8.3bn to be approved in the first parliamentary session after the election.

Labour was criticised in February for shelving a commitment to invest £28bn annually in green energy, instead saying it would spend £24bn over the entire next parliament — equivalent to just under £5bn a year.

Public or private capital?

The party plans to work with the private sector to accelerate the deployment of renewables were criticised by Eleanor Woolstencroft, co-head of press at campaigning organisation Labour for a Green New Deal. GB Energy is “an improvement but it’s not the solution”, she said.

“GB Energy does not go far enough to challenge the energy companies that have done so much damage,” Woolstencroft told Sustainable Views, calling for the “big six energy corporations”, namely British Gas, EDF, Eon, Npower, Scottish Power and SSE, to be nationalised.

Labour said the policy would create 650,000 new jobs, although others, including Woolstencroft, suggested the opposite could be true.

“When the private sector is in charge, of course you’re going to see job losses, because they will find any way that they can to keep their costs down and their profit up,” she said. GB Energy and the transition to renewables “must be state-led so that it can be also worker-led and a fair transition for workers and communities”, she added.

UK Sustainable Investment and Finance Association chief executive James Alexander insisted on the “huge need for private investment” in the UK’s green transition.

This is the new energy revolution, and the longer we dither the higher our energy bills will be

Ed Matthew, E3G

He said he was opposed to GB Energy being subsidised by “huge sums of public money”, and that he wanted to see it “drawing in private capital into the UK”.

UKSIF members want to invest in renewable energy projects, but “the enabling conditions must be right”, said Alexander. He called for a “predictable, responsive and quick” planning system, a grid that is able to accommodate new energy projects, and a “stable and predictable policy environment to give private investors the confidence to come in with the huge sums of money” needed for the transition.

“If GB Energy focuses on that, I think it will be in a really good place,” he said.

Labour is positioning GB Energy as a response to the UK’s cost of living crisis, which has seen household finances battered by inflation and high energy bills. 

“The UK is the second most gas-dependent country in Europe, putting households at the mercy of dictators and fossil fuel fat cats,” said Ed Matthew, campaigns director at climate change think-tank E3G in a statement. “The only solution is to launch a massive insulation programme to cut energy demand and unleash the formidable potential of British renewables.

“This is the new energy revolution, and the longer we dither the higher our energy bills will be,” he added.

A service from the Financial Times