Could Labour’s Great British Energy firm spark a green revolution?

Keir Starmer, the leader of the UK’s Labour party, has promised to create a publicly owned renewable energy firm. Could it help meet the UK’s climate goals?

By Philippa Nuttall

Labour leader Keir Starmer at the party’s conference in Liverpool on 27 September

OLI SCARFF/AFP via Getty Images

The UK’s Labour party is promising to place renewable energy at the heart of its economic policy if it wins the next general election, with plans for a publicly owned energy firm and significant investment in green infrastructure.

“We will set up Great British Energy in the first year of a Labour government,” the party’s leader Keir Starmer told delegates at its conference in Liverpool on 27 September. “A new company that takes advantage of opportunities in clean British power.” It would be publicly owned because this makes most sense for jobs, growth and “energy independence from tyrants like Putin”, he said.

At the moment, many UK energy resources are owned by foreign governments and companies. For example, the largest onshore wind farm in Wales is owned by Sweden and the Chinese government has a stake in new nuclear plants including Hinkley Point C. “Five million people in Britain pay their bills to an energy company owned by France,” said Starmer, referring to EDF, largely owned by the French state and in the process of being fully nationalised.

But would public ownership really make a difference in helping the UK achieve its legally mandated goal of net-zero emissions by 2050?

Some industry experts have reacted positively to the announcement. Great British Energy is “exactly the kind of daring plan that will be required to accelerate the transition”, says Phil MacDonald, CEO of Ember, a UK energy think tank.

Others are less convinced. Tom Haddon, a consultant at Arcadis UK, tweeted: “Why bother? Private capital is literally falling over itself to get into renewable energy generation in the UK.”

But this view reflects “a real myopia that wind and solar is all there is”, says MacDonald. It is expected that these technologies, which are already well funded, will grow to make up 70 to 80 per cent of the UK’s electricity generation by 2030, he says, but other, riskier technologies are needed to make up the rest of a zero-carbon electricity system.

MacDonald says these include massive investment in grid infrastructure, hydrogen, small nuclear reactors and carbon capture and storage, technologies that aren’t yet mature and that have struggled to get financial backing. By funding them through a publicly owned energy company, the UK could reduce the risk of commercialising them, he says.

And once commercialised, these new green technologies will be in demand in the rest of the world, which is where the second part of Labour’s plan comes in. On 26 September, Labour’s shadow chancellor Rachel Reeves set out plans for an £8 billion national wealth fund to support the development of green infrastructure, including green steel plants and battery factories, created by revenues from renewable energy. While Norway has built a massive sovereign wealth fund on the back of fossil fuels, the UK would probably be the first country to build such a fund from scratch using renewable energy assets.

All of this means that Labour has also pledged that by 2030, the UK will generate all of its electricity without using fossil fuels. Reaching this goal would be “a huge challenge, but we have the technologies to do it”, says Sam Alvis at Green Alliance, a UK non-governmental organisation.

The previous Conservative government under Boris Johnson had already committed to 95 per cent clean power by 2030 and 100 per cent by 2035, but it is unclear whether the latest administration under new prime minister Liz Truss intends to stick to this target. The Truss government is lifting a ban on fracking and energy minister Jacob Rees-Mogg has called for oil and gas firms to get “every last drop” out of the North Sea, but it has also relaxed planning restrictions on onshore wind.

Ultimately, whether Labour can achieve its goal of a green economy depends on continued action on renewables today, given the next UK general election could be around two years away. “If the Truss government removes barriers to renewables deployment and maximises efficiency, this goal can be met,” says Ed Matthew at E3G, a UK climate think tank.

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