Poll-leading Labour shows off green jobs plan with launch of GB Energy flagship

The UK's high-flying opposition Labour Party has showcased its plans to drive investment in clean energy with the launch of a new publicly-owned company called Great British Energy.

On a campaign visit to Scotland ahead of 4 July elections, Labour leader Keir Starmer stressed that the decision to headquarter the new company there also signalled a determination to protect the UK's traditional oil and gas-producing regions from job losses.

GB Energy has been described as a "publicly owned champion" for clean energy generation with a role in helping underpin the green manufacturing sector.

The Labour Party has promised to set up the new company “very quickly” if it wins UK general elections on 4 July — as current opinion polls strongly suggest it will — and has pledged to raise £8.3bn ($10.6bn) in funding over five years through a windfall tax on oil and gas companies.

The state-run company is expected to invest strategically in clean energy projects, with an emphasis on new technologies such as floating offshore wind, hydrogen and carbon capture and storage.

Labour says public investment of this kind will create a multiplier effect in private-sector funding for projects.

The initiative was welcomed by trade group RenewableUK.

“With the right set-up and direction, GB Energy has the potential to play a key role in supporting the development of innovative emerging technologies like tidal power and floating wind, as well as the development of new onshore wind and solar sites through Labour's Local Power Plan,” said CEO Dan McGrail.

David Swindin, CEO of Cubico Sustainable Investments, a London-based renewables developer added: “The formation of GB Energy creates an opportunity for the UK to cement its position as a global centre of excellence focused on the net zero transition."

Swindin suggested that GB Energy could “supercharge the UK’s reputation as an incubator for the global net-zero transition” — noting that the UK’s export credit agency believes that green trade could deliver up to £170bn of export sales in goods and services for the UK by 2030.

The UK’s ruling Conservative Party has argued that Labour’s promised move to stop new oil and gas licences in the North Sea would put jobs at risk, especially in Scotland, and could exacerbate energy price spikes in the medium term.

Opinion polls suggest that the Labour Party is running more than 20 percentage points ahead of the Conservatives in the first week of the election campaign.

Need or a whim?

Politicians are not the only ones asking questions of Labour’s flagship energy policy, however.

Hugo Lidbetter, head of sustainable infrastructure at global law firm Osborne Clarke said the GB Energy project risked repeating mistakes of the past by “marrying a laudable mechanism with an undefined objective”.

Lidbetter listed objectives stated for the new entity so far as including: delivering decarbonisation targets; delivering independence from "foreign dictators"; accelerating the move from gas; being successful commercially; investing in new technology; investing in mature green power; transforming public opinion through national branding.

He argued that most of the purposes already have delivery mechanisms in place, such as reforming Contract for Difference auctions or introducing the hydrogen and CCS business models, or established teams in government departments or National Grid.

“Being successful commercially also looks at odds with a focus on investing in tidal and floating power – as well as starting to look very similar to the UK Infrastructure Bank,” he mulled.

“None of this is fatal if it is all pulling towards a common goal of a decarbonised grid, and a secure, affordable power system. But establishing a new, high profile delivery body on top of existing policies runs the risk of diverting attention from the real time-critical issues: grid constraints; planning reform; market reform uncertainty; and supply chain capability.”