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UTILITY WEEK | 11TH - 17TH SEPTEMBER 2015 | 11 Policy & Regulation "Corbyn's ten- point energy plan is crude and simplistic." A ll four Labour candi- dates have talked about the challenge of climate change, energy efficiency and decarbonisation. Andy Burnham has con- fused energy and electricity in his commentary on shale gas. Both Yvette Cooper and Liz Kendall have highlighted the need for clarity of policy to stimulate private sector invest- ment in infrastructure. Yet it is only really Jeremy Corbyn's apparent commitment to rena- tionalisation of the utilities and reopening coal mines that has got any attention. His ten-point energy plan, launched alongside former Labour MP turned green campaigner Alan Simpson, is largely underpinned by the familiar analysis of envi- ronmental groups. Jeremy Corbyn's statements about reopening pits in South Wales might seem inconsistent with the document his campaign produced, but appealing simultaneously to Greenpeace members and former mining communities is a calculated move. As crude and simplistic as it might be, it also helps Corbyn justify his long- standing opposition to nuclear power and dismiss its low- carbon baseload merits. When newspapers reported Jeremy Corbyn favouring National Grid and the big six being under public control, utilities analyst Peter Atherton costed that move at £124-185 billion (see column, le). The idea of nationalising utilities is very popular – at least super- ficially – among the public at large – and is not a surprise to energy companies, well aware that part of the recent legacy of rising bills, confusing tariffs and poor customer service is a nostalgia for public owner- ship. Perhaps that is why Jeremy Corbyn's campaign has not spent too much time drawing attention to what he actually said. While initially suggesting building up a shareholding gradually (but as the Atherton note pointed out, a 30 per cent stakeholding necessitates an offer for the whole company), it was a "personal wish" rather than a policy. Jeremy Corbyn's policy paper, instead, talks about widening owner- ship, more suppliers, a more competitive market, re-cast regulation, community energy, localised storage and demand management, local authorities and consortiums developing smart power systems – in short, a combination of previ- ous Labour policy, an accelera- tion of what is happening as technology has advanced and the challenges large utilities face already. Utilities should not dismiss the reasons why calls to renationalise are popular with many, and should be focusing relentlessly on demonstrating to customers a much improved approach. But expectations of a Corbyn leadership are already being lowered. Read the full version of Tom Greatrex's column at: www.utilityweek.co.uk "The cost of renationalising energy would be at least £50bn." T he ongoing Labour leader- ship contest has thrown up many surprises, not least the probability that the previ- ously unheralded le-winger, Jeremy Corbyn MP, will win. If so, such a result would represent a sharp shi to the le and, in the view of many commentators, make Labour unelectable. Corbyn has put forward many radical views, perhaps the most pertinent of which with regards to utilities is his advocacy of renationalisation. Public owner- ship – he maintains – should be the preferred model for a range of sectors, from railways to power. Of course, le-wing Labour politicians have had a long – and fiery – involvement in energy issues, not least the epic coal-mining strikes in the early 1970s and in 1984. Corbyn supports the rena- tionalisation of the UK activities of the big six power companies, four of which are overseas- owned, along with National Grid, one of the EU's most valu- able utilities. Were Corbyn ever to become prime minister so that he could theoretically be in a position to implement such a policy, the cost would be massive. Well-known City investment analyst Peter Atherton has placed a cost of £124-185 billion on such a policy, more than the annual cost of the NHS. His figures assume a 100 per cent renationalisation plan for the UK assets of the big six, along with National Grid. In reality, the bill – though vast – would be lower. Tak- ing simple 51 per cent majority stakes may well suffice. Even so, a formidable bill in excess of £50 billion could well arise. Aside from being a major deterrent to foreign investors, the benefits of such a policy would be modest. Aer all, Ofgem is well- placed to implement energy price controls, as Ofwat does in the water sector. Furthermore, most major UK generation investment is now effectively dictated by the gov- ernment and by its contracts for difference (CfDs) awards. Outside energy, Corbyn has not advocated similar policies for either the water or telecoms sectors, but this could change. Of course, the chances of Cor- byn becoming prime minister are slim. However, "slim" does not mean "impossible". Nigel Hawkins, director, Nigel Hawkins Associates Opinion Tom Greatrex, Former shadow energy minister Talking points Labour leadership election – the voting system The Labour Party uses the alternative vote system in its leadership elec- tions. Voters rank in preferential order their favoured candidates – in this case from one to four. When the votes are counted, if no single candidate has more than 50 per cent of the vote, the lowest ranked candidate will be eliminated and their votes distributed between the rest, based on their second preferences. This process continues until someone achieves a majority. Utility Week Lobby produced in partnership with: How it works Eliminate last place candidate Winner found Count voters' First Choices Does a candidate have a majority? Distribute eliminated candidate's ballots