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It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Wednesday, 9 September 2015

Corbyn's energy policy is not a throwback to the 1980's

Jeremy Corbyn's energy policy proposals have caused some excitement in the sector, even if those reacting haven't always read it properly.

The headlines scream that Jeremy Corbyn is in favour of the "big six" energy firms being taken into public ownership. They usually miss the caveat "in some form".

He explained: "You can do it by majority shareholding; you can do it by increased share sales, which are then bought by the government in order to give a controlling interest". This would eventually lead to nationalising the six companies: British Gas, SSE, Eon, Npower, Scottish Power and EDF Energy, and also the national grid. Or as Corbyn put it, "I would want the public ownership of the gas and the National Grid . . .I would personally wish that the big six were under public control, or public ownership in some form."

His energy policy proposals are much wider than just public ownership. These are his Ten Energy Pledges

1) My over-arching commitment will be for Britain to take the lead in developing the clean Energy Economy of the future.

2) As leader I would establish an Energy Commission to draft a fundamental shift in UK energy thinking.

3) The Commission will be tasked to produce a route-map into tomorrow’s ‘smart energy’ systems that will:

• Deliver more, but consume less

• Use clean energy before dirty

• Put energy saving before more consumption

• Use smart technologies to run localised storage, balancing and distribution mechanisms

• Shift the costs of grid access and grid balancing from clean energy to dirty

• Be open, democratic, sustainable and accountable (in ways that today’s market is not).

4) The Commission will be charged with bringing new partners into energy policy making. These will include local authorities, communities, energy co-operatives, and ‘smart’ technology companies that are already working on tomorrow’s ‘virtual’ power systems and new energy thinking.

5) As leader I will conduct a root and branch review of energy market subsidies; moving away from the notion of everlasting hand-outs; instead, using public support as ‘transition funding’ that transforms Britain’s energy infrastructure.

6) I will expect the energy industry, not the public, to meet the costs of their own clean-up.

7) I will look to re-define of the roles of Ofgem, National Grid and the Competition and Markets Authority, to promote a more genuinely open, competitive and sustainable energy market; one in which there are more players and more clean energy choices than we have today.

8) I will examine ways to allow communities to be owners of local energy systems, with the right (as in other parts of Europe) to have first use of the energy they generate themselves.

9) We must socialise our energy supply and move toward breaking-up the failing energy cartel. Instead, I want to look at the role of the state as guarantor of last resort; with more direct responsibility for the nation’s back-up generation, high voltage grid and interconnectors; directly ensuring that Britain’s ‘lights never go out’.

10) I would commit Britain to binding international climate change commitments; making national targets, local ones too, and devolving both the necessary powers and duties to meet these obligations.

We can see from these pledges that far from being a Morrisonian model, he is talking about a much more decentralised energy system, engaging communities and local authorities.

Stephen Hall writing in The Conversation, gives us a sympathetic view of the proposals.

He argues that this is, "no aggressive nationalisation plan. What it is, is a manifesto for a more decentralised and democratically accountable system, inspired more by present-day Germany than 1980s Britain."

Hall gives us four reasons to suspect his plan is more revolution than 1980's throwback.

Introducing genuine competition. "Competition" in the UK energy market has left consumers bamboozled. His plan would encourage consumers to buy energy from municipal utilities or co-operatives. Some new consumer options are being seen in the UK. For example Nottingham City Council has set up its own energy company with a name that sends a clear message: Robin Hood Energy.

Help for smaller energy startups. The current grid setup creates barriers to innovation and is holding back new technologies. There is no technical reason why you shouldn’t be able to choose to buy energy from local sources. By creating local energy markets, smaller but still viable businesses can flourish.

Cheap access to green investment. The proposals commit to pursue energy investment through a National Investment Bank. While this model has seen success in Germany, what is less well understood is how important citizen banks (that we don't have in the UK) have been in deploying this investment. Hall argues that it will be important to deliver this investment through the right institutions at the right level so citizen investment can complement state finance.

Democratising the energy sector. Essentially more citizen influence over the energy system – and not just through supposed consumer "choice". There are good Danish and North American examples of this.

Hall concludes:

"It is clear from the manifesto that the energy policies of the Corbyn camp are anything but a throwback to monolithic state utilities. There is potential for more competition through more diverse energy business models, a clear willingness to make space for smart energy innovation, a call for different approaches to energy system finance, and a platform for more plural approaches to energy governance. Whether or not the reader agrees with these proposals, it should be clear that they are not "old solutions to old problems", but provocative responses to increasingly urgent challenges."

A more critical analysis comes from former the shadow energy minister, Tom Greatrex, in Utility Week.

He highlights some apparent inconsistencies in the proposals, but concludes that this is a calculated political strategy, he said; "Jeremy Corbyn’s statements about re-opening 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 longstanding opposition to nuclear power and dismiss its low carbon baseload merits."

However, even Tom accepts that the idea of nationalising utilities is popular with the public, he said: "This isn’t 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 ownership."

He also points out that the wider proposals are working with the grain of progressive energy policy. Widening ownership, more suppliers, a more competitive market, re-cast regulation, community energy, localised storage and demand management, local authorities and consortiums developing smart power systems - is a combination of previous Labour policy, an acceleration of what is happening as technology has advanced and the challenges large utilities face already.

As with much of the hysterical media reaction to Jeremy Corbyn's campaign, his energy proposals are certainly not a throwback to the 1980's. Yes, they are radical, but they are intended to offer practical, modern solutions to long standing problems. I might not agree with everything in the proposals, but it is refreshing to find a politician who is prepared to promote radical, and popular, solutions that rattle the vested commercial interests.

 

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