Labour will enact “the most ambitious climate and energy agenda in British history,” according to shadow net zero minister Ed Miliband.
Labour plans on moving to 100 percent “clean power” by 2030, five years earlier than the Tories.
Key to Labour’s plans is GB Energy, a new state-owned renewable energy company that the party has pledged to establish soon as it is in power. Mr. Miliband claims that this will dramatically lower bills.
GB Energy, which is set to cost £1.7 billion a year, promises to play a part in decarbonising the electricity supply by 2030. It will have a mandate to invest a confirmed £8.3 billion in clean energy, such as wind, solar, tidal, nuclear, and other emerging technologies.
Labour said that to support investment in this plan, taxes on oil and gas companies will bring in £1.2 billion a year. Last week, Labour also confirmed it will not issue new oil and gas licences for the North Sea.
‘Sleight of Hand’
The Institute of Environmental Management and Assessment (IEMA) said that GB Energy is “not too dissimilar in principle to the way in which the UK Infrastructure Bank operates; crowding in private investors for projects whereby the risk profile would potentially be off-putting without anchor support from the public sector.”The sustainability professionals organisation said that the party would “need to go much further than this.”
This is because it does not “commit to achieving the various environmental targets set down by the Environment Act, the supporting detail on how this will be achieved is limited and there is no mention of establishing a specific plan to protect 30 percent of the land and of the sea for nature’s recovery by 2030 (30by30).”
Andy Mayer, energy analyst at the free market think tank the Institute of Economic Affairs, was sceptical about some of the plans.
He told The Epoch Times that he believes the only way Labour could rapidly reduce bills would be by “sleight of hand,” which means by moving “green levies to general taxation, and possibly by eliminating VAT.”
Mr. Mayer said that “neither change would make any difference to the cost of renewables which depend on global supply chains, largely immune from domestic policy tinkering.”
The UK has a mostly private sector energy system, albeit heavily regulated and with supply choices, which he said are “distorted by heavy regulation (nuclear and the grid), subsidies (wind and solar), and production and carbon taxes (oil and gas).”
“Within that £150 billion market a state investor deploying £1.7 billion a year (or 10 percent of all current investment) will make little difference,” he said.
He said that the main driver of renewable deployment will remain the level of subsidies—which increased 50–75 percent last year—not ownership, and where projects are already commercial, they will not need input from GB Energy.
“The danger conversely is that GB Energy will be attractive to marginal projects with weak business cases that should neither be built, nor sustained when they fail. Far from lowering costs the taxpayer will be on the hook for white elephants,” said Mr. Mayer.
“Which is precisely the same mistake the British made in the 20th century with nuclear power, pursuing a bespoke local technology nobody else wanted to buy and currently still costs taxpayers £3 billion a year,” he added.
The Epoch Times contacted the Labour Party for comment.
