Could the Great British Energy company created by Labour start a green revolution?
Labour party leader Keir Starmer has pledged to establish a publicly owned renewable energy company. Could it help the United Kingdom fulfil its climate goals?
If it wins the next general election, the Labour party of the United Kingdom pledges to place renewable energy at the centre of its economic policy, with plans for a publicly owned energy corporation and substantial investments in green infrastructure.
“In the first year of a Labour government, we will establish Great British Energy,” Labour leader Keir Starmer told delegates at the party's conference in Liverpool on 27 September. “A new enterprise that capitalises on prospects in British clean energy.” It would be controlled by the government because it makes the greatest sense for job creation, economic expansion, and “energy independence from tyrants like Putin,” he argued.
Numerous UK energy resources are currently held by foreign governments and corporations. For instance, Sweden owns the largest onshore wind farm in Wales, while the Chinese government has a stake in new nuclear plants such as Hinkley Point C. “Five million Britons pay their energy bills to a French corporation,” stated Starmer, alluding to EDF, which the French government is in the process of nationalising.
But will public ownership have a significant impact on the United Kingdom's ability to achieve its legally mandated target of net zero emissions by 2050?
Some industry professionals have responded favourably to the announcement. Phil MacDonald, CEO of UK energy think tank Ember, describes Great British Energy as “just the kind of audacious initiative that will be necessary to expedite the transition.”
Others remain sceptical. Consultant at Arcadis UK Tom Haddon tweeted, “Why bother? Private finance is virtually clamouring to invest in renewable energy generating in the United Kingdom.”
MacDonald argues that this perspective indicates “a profound myopia that wind and solar are the only options.” These technologies, which are already well-funded, are likely to account for 70 to 80 percent of the United Kingdom's electricity output by 2030, he says, but other, riskier technologies are required to complete a zero-carbon electrical system.
These, according to MacDonald, involve significant investments in grid infrastructure, hydrogen, small nuclear reactors, and carbon capture and storage. According to MacDonald, none of these technologies are mature and all have struggled to attract investment. By supporting them through a publicly-owned energy firm, he believes, the United Kingdom could lessen the risk associated with their commercialization.
And once commercialised, these new green technology will be in demand throughout the rest of the world; this is the second element of Labour's plan. Rachel Reeves, Labour's shadow chancellor, unveiled plans for an £8 billion national wealth fund on 26 September to promote the development of green infrastructure, such as green steel mills and battery manufacturers, using earnings from renewable energy. While Norway has amassed a substantial sovereign wealth fund on the back of fossil resources, the United Kingdom would likely be the first nation to do so using renewable energy assets.
All of this implies that Labour has also claimed that by 2030, all of the United Kingdom's electricity will be generated without the use of fossil fuels. Reaching this objective would be a “big task, but we have the technology to achieve it,” according to Sam Alvis of the UK non-governmental organisation Green Alliance.
The previous Conservative administration, led by Boris Johnson, had already pledged to achieving 95 percent sustainable energy by 2030 and 100 percent by 2035, but it is unclear whether the new administration, led by Liz Truss, will adhere to this goal. The Truss government is relaxing the ban on fracking, and energy minister Jacob Rees-Mogg has urged oil and gas companies to extract “every last drop” from the North Sea. However, the government has also loosened limitations on onshore wind development.
Ultimately, Labour's ability to realise its objective of a green economy is contingent on ongoing action on renewables now.
This objective is attainable if the Truss administration eliminates barriers to renewable energy deployment and maximises efficiency, according to Ed Matthew of the UK climate think tank E3G.