Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/568088
10 | 11TH - 17TH SEPTEMBER 2015 | UTILITY WEEK Lobby Election / Party conferences T he Labour leadership election has led to an unexpected groundswell of sup- port for le-winger Jeremy Corbyn, bringing the socialist agenda to the fore for the first time in decades. Headlines are dominated by his "personal wish" to renationalise the six major energy companies and National Grid, but this does not feature in his ten energy pledges (see box). With this in mind, should Corbyn's leadership challenge, and his proposed energy policies, be feared by the utilities? "Socialising" the energy sector is a major theme, with Corbyn keen to increase com- munity involvement, not only in terms of ownership, but also in terms of their involve- ment in policymaking. Alongside this, Corbyn wants the state to ensure the lights "never go out" by mak- ing it a guarantor of last resort and by tak- ing "more direct responsibility" for the high-voltage grid, back-up generation and interconnectors, encroaching on to National Grid's territory. The veteran le-wing MP also wants to redefine the role of National Grid, alongside Ofgem and the Competition and Markets Authority, in order to promote a "more com- petitive and sustainable energy market". The socialist view point framing the debate, fuelled by Corbyn's seemingly popu- lar renationalisation wish, has resurrected a le-wing narrative and has made himself the bookies' favourite for the leadership role. However, for the majority of the energy sector, there is not too much The left awakes Should utilities be afraid of left-wing firebrand Jeremy Corbyn? Policy & Regulation Corbyn wins, and wins 2020 general election ● If Jeremy Corbyn is successful in the party leadership election, and then manages to win enough votes to become the first elected Labour leader since Tony Blair in 2005, he would seek to implement his ten point energy plan. The utilities will be eager to see if he presses ahead with his personal wish to renationalise the big six and National Grid. Corbyn wins but loses the 2020 election ● After five years of pushing left- wing policies failure at the 2020 election could see Labour return to the centre ground with a new leader. Corbyn wins but stands down before election ● It has been rumoured that Corbyn wants to lead the party to return it to its socialist roots but not fight a general election. Having galvanised the party with fresh left- wing thinking, he could step down to allow a younger leader to take on the Conservatives. Corbyn loses – another candidate wins ● If the polls prove to be as awry as they were for the general elec- tion and Corbyn fails, he will have achieved the purpose those who got him into the leadership contest wanted – to broaden the debate. He has brought the left of the party to the fore, and helped integrate their ideas into those the Labour is set to take forward. L ABOUR LEADERSHIP SCENARIOS Corbyn's ten-point energy plan Make Britain take the lead in developing the clean energy economy of the future. Establish an Energy Commission to draft a funda- mental shift in UK energy thinking. Produce a route-map into tomorrow's smart energy systems. Bringing new partners into energy policymaking. Conduct a root and branch review of energy market subsidies. Ensure clean-up costs to be met by the energy industry, not the public. Redefine of the roles of Ofgem, National Grid and the Competition and Markets Authority. Examine ways to allow communities to be owners of local energy systems, with the right to have first use of the energy they generate. Look at the role of the state as guarantor of last resort, with more direct responsibility for back-up generation, high-voltage grids and interconnectors. Commit Britain to binding international climate change commitments with national and local targets. The utilities bank? Corbyn's proposal for a national investment bank (NIB) to help utilities meet their massive infrastructure bills sounds attractive. But is it? The NIB would be partly funded by cutting corporate reliefs and subsidies and cracking down on tax avoidance. Such a mechanism could well steal from Peter to pay Paul, exposing energy- intensive users (including water companies) and energy generators to a variety of green policy costs which they have lobbied hard to be shielded from. to fear in Corbyn's pledges. They push ahead with cleaning up the generation mix, and sharing out ownership in the sector – both of which are nothing new. There would be a greater role for the state, should Corbyn be in a position to implement his policies come 2020, but the pledges are not beyond the realm of possibility. Energy company chief executives will be keeping a close eye on the leadership con- test, and the subsequent debates it spawns, ready to interpret the policies for the benefit of shareholders and investors. Especially the top brass at National Grid.