Four big questions Labour still needs to answer about Great British Energy

Image: Labour Party

The website for Great British Energy went live late on Thursday (30 May), answering many key queries about how Labour intends to run the publicly owned energy generation company it first promised in 2022.

It confirms Labour’s intention to set up the organisation and begin co-funding new renewable and nuclear generation assets within months of July’s general election. Funding would be GB Energy’s primary objective; it would not own any infrastructure fully or act as an energy retailer.

Funding would be raised through an increased windfall tax on North Sea oil and gas producers and allocated to both mature and emerging renewable and nuclear generation technologies.

While the announcement has been broadly welcomed by environmental groups and green business leaders, Labour Leader Kier Starmer will certainly face pressure to provide more specific information.

Osborne Clarke’s head of sustainable infrastructure Hugo Lidbetter said this may not be forthcoming just yet, stating: “The sleight for publicly owned companies is they become a metaphor for delivering a target or policy, without having to explain how they will do so. We saw this last year with Great British Nuclear.”

Friends of the Earth has warned the Labour Party that it “mustn’t rest on its laurels just because it has one strong green policy”. Analysis from the NGO this week concluded that, at present, while Labour’s green policy pledges are stronger than the Conservatives, they are less comprehensive than those from the Green Party and Liberal Democrats.

The next Government will have a myriad of green policy decisions to navigate beyond shifting the energy generation mix, from implementing new packaging waste regulations to tackling water pollution from sewage, agriculture and housebuilding.

But even within the realm of the energy generation mix itself, there is some key information missing from Labour’s websites and documents at present. Here, edie lists four questions which key green economy groups wants the Party to answer about GB Energy.

1) How would Labour reform planning and permitting?

Virtually every nation will need to modernise and expand its grid infrastructure to achieve energy system decarbonisation. This will be necessary to enable more renewables and/or nuclear to come online, and to facilitate the electrification of sectors such as transport and heating.

The cross-party Environmental Audit Committee (EAC) of MPs recently confirmed that the current queue of energy generation and storage projects contains more than twice the capacity needed to meet the incumbent Government’s 2035 grid decarbonisation ambitions.

But projects are being held up by limited capacity in certain areas and outdated planning and permitting regulations, the MPs concluded. The Government is working with regulator Ofgem and the National Infrastructure Commission on reforms. Interim interventions have also been made to allow delayed projects to exit the connections queue.

But many are of the opinion that progress has not been rapid enough and that further interventions can be made.

Britain Remade founder Sam Richards has stated that GB Energy will only be a success if Labour “tackles Britain’s outdating planning system head-on” to “dramatically speed up” processes.

The reform process has been slower, in Richards’ opinion, by a failure to change consultation processes in the first instance. This has hampered the implementation of the National Infrastructure Commission’s recommendations including streamlined environmental impact assessments.

2) What are the Party’s plans for grid investment and energy storage?

Even if planning and permitting processes are modernised, Britain’s grid infrastructure will require more investment. International Energy Agency data has proven that, globally, the annual rate of grid investment has remained broadly stagnant” since the Paris Agreement was ratified in 2015, at around $300bn per year.

Information provided by Labour on GB Energy to date does not answer the question on whether the company should have a role to play in facilitating additional grid investment in the UK.

It bears noting that National Grid recently set out a £60bn investment plan through to 2035, which should be spent regardless of the election result – so Labour may wish to leave the heavy lifting of grid investment to other bodies. Even so, it will need to set out how it plans to curry public favour for the grid built-out should the Party ditch the Conservatives’ ‘pounds for pylons’ approach.

It also appears, at present, that investing in energy storage will be beyond GB Energy’s initial remit.

The Climate Change Committee (CCC) has recommended that the UK aims to host 7GW of battery energy storage by 2025, rising to 8-9GW by 2028. Long-duration energy storage capacity will also need to be dramatically scaled from the 2.8GW currently operational. Labour is yet to set out concrete plans in these areas.

3) How will the green skills opportunity be maximised?

Labour is marketing GB Energy with the strapline: “Lower bills, energy security, good jobs.”

On the jobs piece, IEMA’s chief executive Sarah Mukherjee has said the next Government will need to develop a clear roadmap, backed with public investment, to grow the energy workforce.  Otherwise plans to get shovels in the ground will fall flat.

Beyond the practical need for a larger workforce, this will also be necessary to build public trust in the transition and ensure that benefits are fairly shared.

Mukherjee said: “Demand for green skills globally is growing nearly twice as fast as the growth in green talent – so there is a green skills gap looming.

“A skilled UK workforce is vital for net-zero. If unaddressed, the green skills shortage will compromise efforts to achieve legally-binding net zero targets and ensure a just transition away from fossil fuels.”

To give a sense of the scale of the looming skills gap, it is estimated by MPs that the UK’s nuclear energy workforce alone will need to more than double in size by 2050. From a current staff base of 65,000, up to 215,000 could be needed.

4) What would be done on the demand side of the energy transition?

The CCC has repeatedly told the Conservative Government that it lacks credible plans to reduce emissions from building heating by enhancing energy efficiency. Several schemes have launched and closed in recent years, including the Green Homes Grant, which has been succeeded by a Great British Insulation Scheme with a narrower scope and less funding.

Labour’s current document on ‘making Britain a clean energy superpower’ lambasts the Tories and SNP for failing to bring forward comprehensive, long-term energy efficiency schemes for buildings. But it does not offer up an alternative.

Starmer and his team will doubtless face questions on how they intend to drive the energy transition from the demand-side as well as the supply-side. The Conservatives faced this same bewilderment over the Energy Act, which includes precious little on efficiency.

E3G’s campaigns director Ed Matthew said:“The UK is the second most gas dependent country in Europe, putting households at the mercy of dictators and fossil fuel fat cats. 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.”

Beyond efficiency, should Labour succeed at the election, they will need to decide how to continue the existing Government’s work on building more demand-side flexibility into the energy system.