The Labour Party’s flagship energy policy is to form Great British Energy (GBE) a publicly owned renewables company, funded by a £8bn windfall tax on North Sea Oil and Gas companies, based in Scotland.
Other countries have similar companies, EDF in France is now 100% state controlled, as is Vattenfall in Sweden, both are successful players in world energy markets. Denmark went the other way, transforming DONG from public to a private business known as Orsted, who are also a major global player.
GBE’s capitalisation would make it about half the size of SSE, and around the same size as Centrica, both vertically integrated energy companies.
This policy is designed to appeal to voters that believe that they have been ripped-off by the private sector. There is a promise of £300 cheaper bills because renewables are cheaper. It’s not entirely clear whether GBE would have a retail supply business, if it did would it offer energy at £300 less than the Price Cap to fulfil the promise?
We need more detail on how Labour proposes to fulfil another commitment to decarbonise electricity by 2030: We would need about three times as many wind turbines as we have today, backed with many new nuclear power stations, and large battery installations.
The big question is will GBE make a difference?
It is a drop in the ocean - decarbonising the UK will cost £1,500bn, energy markets are so large that it is difficult for governments to play in them. £8bn is not enough to move the dial.
Clear and stable policy is essential, and if Ed Miliband is the next Energy Minister, they may have found someone with the passion and drive to make this happen.
