A Labour government will create a publicly-owned energy company within its first year in office, Sir Keir Starmer has announced.
The Labour leader said Great British Energy will take advantage of opportunities in clean British power.
He won a standing ovation at the party’s annual conference in Liverpool when he said the new company will be publicly owned.
It was “right for jobs, right for growth and right for energy independence from tyrants like Putin”, Sir Keir said.
The Labour leader told delegates that at the moment the largest onshore wind farm in Wales was owned by Sweden, energy bills in Swansea were paying for schools and hospitals in Stockholm, the Chinese Communist party had a stake in the UK’s nuclear industry and five million Britons paid their bills to a French-owned energy company.
The role of GB Energy will be to provide additional capacity, alongside the rapidly expanding private sector, to establish the UK as a clean energy superpower and guarantee long term energy security, said Labour.
The party said the announcement of GB Energy builds on its commitment to make the UK a clean energy superpower by 2030 and create a National Wealth Fund (NWF).
The energy generation company will be given seed capital from the £8 billion NWF which it would use to invest in green schemes.
The state support would mean it could potentially invest in riskier schemes or more experimental technologies, such as tidal power, and the plan is for it to eventually become self-funding as a result of the money generated.
The independently-run firm could invest in nuclear schemes and ultimately even end up exporting energy overseas.
Labour’s plan is a pragmatic way to help deliver clean power at scale so we can cut energy bills, deliver energy security, and create good jobs for the British people, the party leader told the conference.
Labour’s Green Prosperity Plan is about investing in Britain to cut energy bills, make the UK energy secure, grow our economy, and protect future generations by tackling the climate crisis.
Here’s how: pic.twitter.com/KfGnEsVwNk
— The Labour Party (@UKLabour) September 27, 2022
Sir Keir said: “Labour will make sure that the public money we spend building up British industry, spurs on private investment, stimulates growth … and the British people enjoy the returns.”
Ed Miliband, shadow secretary for climate and net zero, said: “Labour will deliver an energy system for people and planet. Foreign governments own large parts of our energy system, and reap the wealth that flows from it.
“As we implement our clean power plan, it’s time to have our own publicly-owned domestic champion in energy generation, creating wealth and jobs in Britain.
“Labour will build an energy system for the future, run for the British people.”
A Labour spokesman said: “This is not about nationalisation. It’s about introducing a new player into the market that is able to ensure that we are putting every effort that we can into the drive for clean power, for renewables and nuclear.”
‘Boost’ to renewables
Rebecca Newsom, Greenpeace UK head of politics, said: “Establishing a UK-owned energy generator has the potential to give homegrown renewables a big boost.
“Under a publicly-owned Great British Energy, vital emerging technologies like floating offshore wind and green hydrogen electrolysers could be given the extra support needed as UK supply chains are grown and costs come down.
“To be truly effective and deliver on Labour’s commitment to a fair climate transition, a publicly-owned energy agency would need to give fossil fuel workers smooth routes into the clean energy sector.
“Right now we already know that more renewable jobs must go to local workers, with fair contracts and safe working conditions, and there must be proper training and reskilling for workers moving across from the oil and gas industry.”
Cat Hobbs, director of public ownership campaigning group We Own It said, “We’re absolutely delighted about this fantastic announcement. Great British Energy, in public ownership, will invest in renewable energy, tackle climate crisis and bring down bills.
“We have incredible potential for wind and water power around our coastline that can be harnessed for everyone’s benefit.
“The public will celebrate this amazing news. Our polling shows that 66% of us, including 62% of Conservative voters, want energy in public ownership.
“We’d love to see a public supplier too, and the grid should also be working for people, not profit – these policies are the norm in other European countries. But this announcement is a huge step in the right direction.”
TUC general secretary Frances O’Grady said: “This is a big, bold move that will cut bills and secure our energy future.
“This new national energy champion can provide high-quality jobs to every corner of the UK, and it’s about time the public shared in the profits of British energy.”
CBI president Brian McBride said: “There is widespread recognition that the energy market needs significant reform and industry will want to get to grips with the detail of Labour’s proposals.
“The UK is not short of renewable generators right now and investment is waiting in the wings, but where Great British Energy could add value is by channelling catalytic public investment to spur innovation and accelerating the delivery of renewable projects.”
‘Early adopter’ advantage
Nick Cooper, CEO of CCS and hydrogen developer Storegga, also welcomed the policy, but warned the UK would miss its early adopter advantage without quick action.
“It is clear that the bold new Inflation Reduction Act in the US is triggering an international race. The UK risks losing its early adopter advantage in important decarbonisation technologies such as CCS and hydrogen unless it gives the market signals the private sector needs to release much-needed billions of funding ready to invest.
“The Labour Leader’s comments build on the announcement that they would back eight CCS clusters, including our own Scottish Cluster. This is exactly the commitment the UK’s CCS industry needs. Funding the Scottish Cluster will achieve three things – it will set out a pathway to access pent-up investor demand, create a world-leading carbon removal industry, and importantly, protect thousands of jobs in energy intensive industries, which cannot decarbonise quickly without these critical technologies.”