The UK has been going through a green energy transition from coal and gas to renewables. Labour have promised to accelerate this, in part by creating the Scotland-based Great British Energy. But it faces significant challenges.
In their Manifesto Labour promised to “work with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030.” They also promised to invest in carbon capture and storage, hydrogen, marine energy and energy storage.
But what is Great British Energy? When it was first revealed Labour said that it would be reducing peoples’ energy bills, so the media and public assumed that it would be an energy company from which you could buy your electricity. Labour were rather slow to correct this impression. They say it is going to be a co-investor in new and existing energy technologies, and it will help encourage community renewables. There will be £8.3bn 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.
Of course, 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 half a million pounds on consultants, the government concluded that this model was not viable. The commitment was transferred into the creation of an energy agency, meant to help with the transition to green energy. What we appear to have ended up with is a commitment an organisation called Heat and Energy Efficiency Scotland, which won’t be fully up and running until next September and will concentrate on decarbonising heating.
The problem for Labour is that Great British Energy is spreading its ambitions too wide. £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, carbon capture and storage, and hydrogen production will spread the jam very thinly indeed.
Looking at just two of these technologies is instructive. The UK government has run two “competitions” to get carbon capture and storage working on a power station. Both of these had a promise of £1 billion of public money. Both ended in failure.
Great British Energy will absorb the Tory’s recently-created Great British Nuclear. Labour’s obsession with nuclear power comes from its relationship with the unions, but nuclear power 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 the Labour Party 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 carbon capture and storage, disabling it before it even gets properly started.
A version of this article appeared in the Scotsman newspaper on the 10th July 2024.