A New Clean Energy Superpower, or an Echo of the Past?

The 4th of July will be a new day for many, certainly a likely change in UK govt after 14years. So something of import for all of us for many reasons.

Today we have had more details of Labour's 'big idea' GB Energy. It was a bit cheeky to lump the SNP into the bag as the Tories when it came to improving the drive to clean energy. Up here we have had a successful ScotWind leasing round and we have developed quite a few onshore wind farms while our southern cousins had 'the ban'. But Keir is looking for some Scottish seats, so OK he gets a pass.

I have to say though, I have been a confused and a bit 'meh' on this. To me, having a public Utility has not been the drag anchor on either offshore wind or the wider net-zero. To me we did not need a GB Energy to solve grid issues or improve the heating efficiency of our draughty housing stock.

Also I was worried that a creation of a new utility would divert much needed civil servant bandwidth when there are issues to sort out.

So I am interested. Let's face it we all are, this is our sector.

I am still a wee bit confused, but that may be my age. So let's dig in a bit deeper.

Labour's big idea: GB Energy

The UK stands at the cusp of a pivotal transformation in its energy landscape, though we have been standing on that spot since 2010 when not soon after Cameron started his war on 'Green Crap' - which cost each household circa ￡150/year by 2022 - so it is with interest we listen to the Labour Party proposing the establishment of GB Energy, a publicly-owned energy company; hate the name, I still hear 'GB News' when I say it out loud.

Labour’s vision aims to cut bills, create jobs, and deliver energy security, all while accelerating the country’s journey to net zero emissions. Potentially also solve world hunger at the same time, but that may be on next week's campaign grid.

So let us take a look at the potential impact of GB Energy (OK I am going to call this GBE now as the name is annoying me), the clarity needed for its success, and lessons from the past to ensure it avoids pitfalls like those faced by the Green Investment Bank (GIB), as that is what my mind keeps coming back to.

The stated mission and vision of GBE

Labour’s proposal, outlined in their manifesto "Make Britain a Clean Energy Superpower," envisions GBE as a publicly-owned entity designed to leverage the UK’s renewable resources—sun, wind, and waves(!)—to provide affordable, reliable, and clean energy. The primary objectives include:

1. Reducing energy bills: By investing in renewable energy projects, GBE aims to significantly lower household and business energy costs, projecting savings of up to ￡1,400/household annually and ￡53bn for businesses by 2030.

2. Creating jobs: The initiative promises to create 100,000s of jobs in the clean energy sector, revitalising industrial heartlands and coastal communities.

3. Enhancing energy security: By reducing reliance on imported fossil fuels and mitigating the impact of global energy market volatility, GBE will seek to bolster national energy security.

But we kind of had this already.

Learning from the past

The GIB was initially established as a public entity, and was later sold to Macquarie, creating the massively successful Green Investment Group, now one of the biggest offshore wind investment organisations in the world.

In October 2012 the UK govt at the time established the GIB “accelerate the UK’s transition to a greener, stronger economy” by investing in green projects. The GIB became the Green Investment Group (GIG).

This is the echo...

GIG has been hugely successful, supporting many GWs of clean energy projects globally. But without a doubt it has naturally become a more commercial organisation that was initially intended, but that decision was made in No10 Downing Street and not in Edinburgh at GIG HQ. (Love you folks! ??)

So forgive me for feeling a bit of deja vu at this point. It is certainly forgivable to worry about a similar trajectory.

So onto MacAskill's remit for GBE (are you listening Sir Keir Starmer (and Ed of course)?) So to avoid this, a future Labour govt must ensure:

1. Clear governance and mandates: GBE should have a well-defined governance structure with clear mandates to maintain loooooong term public ownership and focus on long-term national interests rather than short-term profits.

2. Legislative safeguards: Strong legislative frameworks should be in place to prevent the future privatization of GBE. These could include clauses that require parliamentary approval for any sale or significant restructuring.

3. Stakeholder involvement: Engaging stakeholders, including local communities, industry experts, and trade unions, in decision-making processes can ensure transparency and alignment with public interests.

4. Lose the name: You are not Alexander Boris de Pfeffel Johnson. Let's stop just sticking 'GB' on things, OK?

Strategic clarity

For GBE to achieve its ambitious goals, several areas require strategic clarity:

1. Investment framework: Detailed plans on how GBE will invest in renewables, including criteria for project selection and expected returns, will be crucial. This includes prioritising projects that offer substantial environmental and economic benefits.

2. Operational independence: While being publicly owned, GBE must operate with a degree of independence to make agile, market-responsive decisions. An independent board with industry expertise can help navigate the complex energy landscape. GBE will need to leverage and enable what the sector needs, not necessarily what the govt thinks it needs.

3. Integration with existing initiatives: Coordination with existing initiatives like the National Wealth Fund and local power plans can maximise synergies and avoid duplication of efforts. This integrated approach will need to enhance efficiency and impact.

And of course...

Supporting the UK's offshore wind sector

Offshore wind is a cornerstone of the UK’s renewable energy strategy. GBE can significantly boost this sector through:

1. Investment in infrastructure: Upgrading ports and grid infrastructure to support offshore wind projects is essential. This includes fast-tracking planning processes and removing bureaucratic hurdles.

2. R&D and innovation: Investing in research and development for cutting-edge technologies can position the UK as a global leader in offshore wind; services and technology.

3. Local content requirements: Implementing policies that require a certain % of project components to be sourced locally will boost domestic manufacturing and create jobs, but in many cases investment in infrastructure and SMEs will be needed.

Conclusion

Labour’s GBE has the potential to make an impact to the UK’s energy sector, making it cleaner, more affordable, and secure. However, achieving this vision requires strategic clarity, robust governance, and lessons learned from past. By focusing on these areas, I am less worried (and confused), GBE has the potential to play a key role in helping the UK have a proper global lead, not just on GWs with stuff sourced elsewhere etc, but on indigenous exportable services and technology, as well as projects cleaning our energy system. Particularly in the offshore wind sector.

So less confused. More hopeful. But Sir Keir, get rid of the name please. Roll on 4th July.