UK Opposition Calls for Energy Grid Nationalisation
The opposition Labour Party published May 15 proposals to nationalise the UK’s energy grids.
The strategy, entitled Bringing Energy Home, would see a Labour-led government immediately renationalise transmission and distribution grids via an act of parliament, in order to "usher in a Green Industrial Revolution". The plan provoked criticism from all sides, and sent share prices slumping.
Labour currently leads the polls with around 34% support, as the right-wing of British politics is increasingly split by Brexit. However, there is no clear route for Labour leader Jeremy Corbyn to become prime minister anytime soon.
Regardless, he put forward the party’s ambitious plan to bring the UK’s energy networks under state control. Under the scheme, the government would compensate the current owners of UK gas and power grids with bonds. The network companies would be managed by a newly-created National Energy Agency.
"Energy networks that are owned by the public and responsive to the public interest will be able to prioritise tackling climate change, fuel poverty and security of supply over profit extraction, while working with energy unions to support energy workers through the transition," Labour said.
Equity investors were spooked, especially as it emerged that Labour would seek to have parliament decide compensation, including potential deductions based on criteria including “asset stripping since privatisation,” state subsidies awarded and pension fund deficits. The share prices of network operators National Grid and SSE slumped.
The proposal met with instant condemnation from the energy industry. Environmental campaigners offered tentative support.
“These proposals for state-ownership of the energy networks would only serve to delay the huge amount of progress and investment that is already helping to make this country a leader in the move to green energy,” a spokesperson for National Grid remarked.
The Energy and Utilities Alliance (EUA) claimed that the plan is a distraction from the effort to push the energy transition and that “now is not the time to cast aside the experts who deliver gas into 85% of UK homes”
“The UK’s gas networks will undergo significant changes as part of the decarbonisation process,” said head of external affairs Isaac Occhipinti. “For example, significant investment will be required for the storage and transport of hydrogen and other low carbon gases.”
“Given the size of the challenge that lays ahead, the focus must solely be on how we deliver a decarbonised gas network,” he insisted.
Greenpeace, meanwhile, said that Labour’s plan “has the potential to be positive for the climate,” if managed properly.