Utility Week

UTILITY WEEK | 29TH NOVEMBER - 5TH DECEMBER 2019 | 7 Election 2019 cost-reflective, and if you have a social prob- lem you deal with it through social policy." The linkage fuels the suspicion that con- cern over the climate crisis is being used as a Trojan Horse to revive old school ideas about public ownership. Hall says: "Old Labour appears to be back. This entails exceptionally large amounts of government expenditure and an almost scary amount of state control. It could be interpreted as using the modern popular culture of environmentalism to deliver an old Labour agenda." The emissions equation The biggest contradiction at the heart of Labour's commitment to renationalisation is that it will make its ambitious decarboni- sation targets harder to achieve rather than easier, many fear. "All these [net zero] ambitions are only going to be met in partnership with private business," says Energy UK's Markall. Turning to water, Hall says Labour's mani- festo doesn't address the central sustainability issue facing the industry: how to reduce usage. "It is peculiar that the proposals around rena- tionalisation don't really seem to address any of the concerns facing water at the moment," he says, noting that there is no mention in Labour's manifesto about water recycling or raising efficiency standards through building regulations (see Water UK, p10). And Labour's thinking ignores the increased investment in water that took place in the wake of privatisation, Hall says: "If you look at what happened post-privati- sation, we saw a massive increase in invest- ment in water, and improvements in water quality and environmental outcomes. "This is an untargeted policy solution that doesn't appear to address any of the problems facing the UK at the moment." ENA's Gill agrees. "We have good system: the profit motive has been really good for sustaining long-term investment. State own- ership, and the political risk that is naturally associated with it, would jeopardise what we've seen to date and create uncertainty at a time we can least afford it." Labour suggests that surpluses made by the renationalised utilities will either be used to reduce bills or reinvested. Advocates of public ownership o•en argue that the costs of acquiring companies will be recouped from profits made by the nationalised entities. But the focus on keep- ing bills down suggests there is unlikely to be much fat from that particular quarter. In addition, the manifesto suggests that the nationalised companies would have a role in implementing policies like tackling fuel poverty and helping households to reduce their energy demands rather than simply becoming public-owned versions of existing enterprises. Much of the focus in terms of cost has been on the expense of buying currently private companies. But the bigger long-term cost headaches may be operational ones, says Huggins. "With all those extra respon- sibilities, it looks like there will be regular annual call on the Exchequer," he says. Labour's earlier estimate that its nation- alisation plans would cost £14.8 billion caused many a raised eyebrow. The state- ment in its latest manifesto that the souped- up public ownership plans will be "fiscally neutral"and therefore cost the public purse nothing, looks even more of a stretch. Net zero target Perhaps the good news in this context is that Labour has tempered its ambitions in terms of achieving the transition to net zero emissions. While its party conference voted for a motion to set a 2030 decarbonisation goal, the manifesto dials this back to saying that a "substantial majority" of emissions should have been reduced by this date. This is a probably a prudent move, par- ticularly as it draws on research recently carried out for the party, says the ECIU's Marshall. "It's better than blithely going for 2030," he says. "This gives them a lot more credibility rather than picking a random date. When the established basis is to go with Committee on Climate Change advice, you need some advice to back that up." Labour's ambitions are nevertheless bold in terms of wind and solar power, with the former wanted to supply 70 per cent of total electricity needs by the end of this decade. Bold, but achievable, according to Marshall, who notes that the UK is already doing quite well rolling out offshore wind. "The huge increase in offshore wind is doable," he says. "It will be spread all around the British Isles. If it's windy in the Channel, it might not be windy in the North Sea." Ditto solar power, says Chris Hewett, chief executive of the STA (Solar Trade Asso- ciation). He says the past record of the solar industry suggests that the planned pace of Labour's rollout is feasible. He points to the fact that peak deployment of the technology was in 2015 when 4GW was installed. "These targets don't require 4GW, it's all doable. Over a ten-year period, you could ramp up to that." But the key aspects of how Labour will get to net zero are still unclear, says Markall. "Labour talked about regional energy agen- cies but we've not seen a plan about who is co-ordinating the efforts to meet net zero, which is needed," he says, adding that it is crucial to develop a clear pathway to cutting emissions. "We want to work out how may gigawatts we need over the next 10 to 20 to 30 years and say what is needed by what date." What that plan doesn't need is the destabilising impact of a lengthy tussle of nationalisation, even if this prospect looks unlikely in the context of current polls which show Labour continuing to lag behind the Conservatives. Just one sign of these potential complexi- ties is the decision by National Grid and SSE to relocate their legal domiciles to overseas countries in a bid to safeguard their investors in the event of a potential nationalisation (see news, p4). "Nationalisation is just a bit of a distrac- tion," says Markall, adding that energy com- panies are already doing much to deliver energy efficiency programmes and innova- tion. His verdict? "We don't need it." David Blackman, policy correspondent, Utility Week Industry reaction, p10; Political Agenda, p15 Photo: Alamy Labour leader Jeremy Corbyn heralds a 'transformative' manifesto Manifestos at a glance, overleaf ☛

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