I write, not of our oxymoronically-named Secretary of State for Energy Security and Net Zero, but of his very expensive plaything, Great British Energy (sic). Already there is a website produced by the Labour Party ahead of the general election in July this year. Take a look, to see just how truly banal it is. It claims that it will reduce energy bills while also promising to invest in very expensive sources of energy, such as floating offshore wind and hydrogen, and quotes some very credulous electors who obligingly parrot the claim that it will “end the struggle between heating and eating.” That last claim is attributed to Gary, a pensioner from Dudley. I wonder if he is one of those who is now wondering what he has done. Is he one of the millions of pensioners who will be losing their winter fuel allowance?

The new Labour government has already appointed Juergen Maier CBE chair of Great British Energy. You can find out some more about him at his own website. As for the job he has been tasked with, it does seem to be a pretty ineffectual one. The government’s press release of 25th July 2024 tells us that the organisation won’t actually do very much. Rather it is to be given £8.3 Billion of taxpayers’ money to nudge and keep its fingers crossed:

Great British Energy will have five key functions

  • Project development – leading projects through development stages to speed up their delivery, whilst capturing more value for the British public
  • Project investment – investing in energy projects alongside the private sector, helping get them off the ground
  • Local Power Plan – supporting local energy generation projects through working with local authorities, combined authorities and communities
  • Supply chains – building supply chains across the UK, boosting energy independence and creating jobs
  • Great British Nuclear – exploring how Great British Energy and Great British Nuclear will work together, including considering how Great British Nuclear functions will fit with Great British Energy

Leading, co-investing, supporting, boosting, exploring, considering. It’s like a thesaurus of management-speak gobbledook. It turns out that it’s not going to own anything, it’s not going to make anything, it’s just going to cost us all a lot of money while possibly helping to make our energy bills even higher.

Surely, I thought, that’s a bit cynical, even for me. There must be more to it than that. The Great British Energy Bill was being debated in the House of Commons the other day and I was pleased to see that it was rather more meaningful than the mutual back-slapping that accompanied what passed for a debate about the latest round of awards under the Contracts for Difference regime. At first it looked as though it was going to be more of the same, until Claire Coutinho stepped up for the Conservatives and proposed an amendment:

…this House, while recognising the need to cut household energy bills for families, accelerate private investment in energy infrastructure, and protect and create jobs in the energy industry across the UK, declines to give a Second Reading to the Great British Energy Bill because Great British Energy will not produce any energy, will not reduce household energy bills by £300, does not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector, and involves an unjustified use of taxpayers’ money at a time when the Government is withdrawing the Winter Fuel Payment from 10 million pensioners as energy bills rise.

She went on:

I do not want to oppose the Bill just for opposition’s sake, but the Secretary of State has provided no detail on how the Bill will deliver any of his promises, let alone all of them. It is a four-page Bill in which he is asking for £8 billion of taxpayers’ money, while setting out no investment plan, no figures for the energy that will be produced, no numbers for energy bill savings or carbon emission reductions, and not even a timeline. I doubt it can deliver any of the things he has promised. He is asking for £8 billion of taxpayers’ money—a completely blank cheque—for an energy company that will not cut bills or turn a profit by 2030….

…The Secretary of State is setting up a new body when our energy sector is not short of state-run bodies. We have Ofgem, the National Energy System Operator, the Climate Change Committee, Great British Nuclear and, of course, the UK Infrastructure Bank, with £22 billion to provide debt, equity and guarantees for infrastructure finance to tackle climate change, set up by the former Prime Minister.

At this point, the taxpayer might well ask why they are coughing up twice for programmes that do the same thing. Here is why. When I read the Bill, tiny as it is, it rang a bell and, lo and behold, it is a carbon copy of the Infrastructure Bank legislation, so why do the same thing again? Well, there are a few important omissions and tweaks. First, while the Infrastructure Bank legislation sets out directions for governance by directors and non-executive directors, the Bill does no such thing. While the Infrastructure Bank legislation appoints an independent person to carry out a review of the effectiveness of the bank in delivering its objectives, the Bill does no such thing.

Lastly, while the Infrastructure Bank legislation gives special powers to direct investments to the Treasury—to independent civil servants—the Bill gives powers to the Secretary of State, who, as far as I am aware, has no investment background and no financial training and whose only period in the private sector, if I have this right, was as a researcher at Channel 4.

I think she made a number of excellent points there, though naturally – given the Government’s unassailable majority in the House of Commons – the amendment she proposed was not carried. What intrigued me, however, was her reference to the Great British Energy Bill being only four pages long. This is in marked contrast to the enormously complicated Energy Act which I critiqued (while it was still just a bill) here and here. I thought I really ought to take a look at the Bill itself.

Sure enough, after the boilerplate introductory blurb that we have learned to expect (statements that it is compliant with the European Convention on Human Rights and that it represents an environmental law that won’t reduce the level of environmental protection provided by any existing environmental law) we do learn that it is an extremely short piece of proposed legislation indeed. (Digression – lawyers might have some fun arguing that if its object is to promote a massive expansion in huge industrial-scale renewable energy projects with their associated layers of infrastructure, then it does infringe various rights under the European Convention on Human Rights and is also environmentally damaging).

Clause one simply deals with the setting-up of the company and its name, while a very short clause 2 deals with its status. Clause 3 provides for its objects, which are to be “restricted to facilitating, encouraging and participating in— (a) the production, distribution, storage and supply of clean energy, (b) the reduction of greenhouse gas emissions from energy produced from fossil fuels, (c) improvements in energy efficiency, and (d) measures for ensuring the security of the supply of energy.”

(Again, those of us of an argumentative disposition might take issue with the definition of “clean” energy as being simply “energy produced from sources other than fossil fuels”).

Clause 4 provides (as Claire Coutinho observed) for the Secretary of State to provide financial assistance to Great British Energy, whether by way of grant, loan, guarantee or indemnity; acquisition of shares or other interest in any other company; the acquisition of any undertaking or assets; pursuant to a contract; or by incurring expenditure for the benefit of Great British Energy, subject (or not, as the case may be) to any conditions he considers appropriate.

Clause 5 provides that the Secretary of State must prepare a statement of strategic priorities for Great British Energy, which he can revise or replace, and which must be laid before Parliament. This must involve consultation with Scottish and Welsh Ministers and the Department for the Economy in Northern Ireland, where matters reserved to devolved legislation are touched upon.

Clause 6 provides that the Secretary of State may (after consulting Great British Energy and anyone else he considers appropriate) give instructions to Great British Energy and lay those instructions before Parliament. Great British Energy must comply with those instructions.

Clause 7 deals with the preparation of its report and accounts and provides that they must be laid before Parliament. Clause 8 confirms that the legislation is to extend to the whole of the United Kingdom.

And that’s it.

I wasn’t joking when I said at the outset that it’s going to be Ed Miliband’s very expensive plaything. It’s his creation and it’s his to do with as he pleases. Judging by the debate in the House of Commons, the website set up in advance by the Labour Party, and the Press Release issued by the Government in July, it doesn’t seem as though the Secretary of State yet has much idea about how it is to achieve its mutually contradictory objectives. While I am entirely lacking in confidence with regard to this farce there is one thing I have every confidence in – its ability to waste £8.3 Billion of taxpayers’ money over the next five years.

17 Comments

  1. I am finding it increasingly difficult to believe in all this window dressing.

    Either us lot are all wrong and missing something,and indeed there will be light (no pun intended)at the end of the renewable tunnel.

    Or fantasy and reality in the form of engineering knowledge are going to come to gether in a very hard landing.

    Liked by 2 people

  3. Jit,

    That’s a very good question. All we can hope is that now that the Tories have been given a good kicking by the electorate, it is dawning on them that net zero and the rest of the rubbish they pushed through is actually rather unpopular.

    Liked by 2 people

  4. Mark,

    Nut Zero may be unpopular with those who can still read and think independently, and particularly those with a STEM qualification and access to a calculator. But I’m afraid polls show that it’s still very popular with the electorate as a whole (because they unquestioningly swallow the half-truths and outright lies fed to them by mass media, in particular the BBC), so politicians will support it.

    Whether this support will survive the first mid-winter power cuts is an interesting question. As lordelate points out, when fantasy comes up against reality, fantasy is rarely the victor.

    Liked by 2 people

  5. As the Conservative Woman points out, the government is guilty of wilful disinformation prior to the election. They promised to set up GB Energy with the intention of reducing energy bills by £300. But bills are going up in October, and they will continue to increase as more money is poured into building renewables and associated infrastructure. The government then stumbled upon a £22bn black hole which they say they were not aware of prior to being elected, which was the supposed justification for making the ‘tough choice’ of abolishing the WFP for 10 million pensioners, effectively increasing energy bills for pensioner couples by £300. This in addition to the rise in the Ofgem price cap. Mark Jenkinson, former Conservative MP for Penrith & Solway, highlights the absurdity of the ‘saving’:

    Things that don’t create a ‘£22bn black hole’ according to Labour:

    £11.6bn for international climate finance

    £9.4bn for above-inflation public sector pay rises

    £8bn for GB Energy to duplicate the

    £22bn UK Infrastructure Bank

    £9bn in lost tax receipts from shutting down North Sea oil and gas

    Things that do:

    £1.5bn Winter Fuel Payment

    The removal of the Winter Fuel Payment is a malicious, spiteful act, not an act of rational economic prudency. According to Labour’s own calculations in 2017, it could kill 4000 pensioners over winter.

    Labour MPs just voted to kill pensioners. On the same day they released 1700 violent and sex offenders from prison in order to make room for British citizens angry about immigration. That also is malign. Punishing pensioners to save £1.4bn is all the more remarkable considering that Labour (and Starmer) fully supported Johnson’s government spaffing £500bn up the wall during Covid in order to ‘protect granny’.

    But maybe I’m doing them an injustice. Maybe they are the good guys after all. Because, when you look at it, ‘only’ 4000 pensioners are at risk of death this winter. The spending of £51bn on climate measures listed above could eventually save millions of future pensioners from dying in climate changed extreme heatwaves, so it’s money well spent.

    Back on earth though, the immediate future looks bleak. What happens if this winter is the perfect storm Winter of Discontent, politically, economically and meteorologically? Pensioners deprived of the winter fuel payment facing swingeing increases in bills in October, and again in January, struggling through an historically cold winter, with frequent wind droughts leading to energy rationing, brown outs and even blackouts. It’s a worse case scenario, but given the financial and political circumstances, given the insane reliance upon weather dependent renewables and given the ‘odd’ behaviour of the British weather so far throughout 2024, an unexpectedly severe winter and consequent excess death toll is a possibility. We might be looking at a lot more excess winter deaths than 4000. If this Labour government is despised now, Starmer & Co. might be seriously trying to avoid a public lynching by February next year.

    Liked by 2 people

  6. It has to be said, prisoners spraying champagne on the prison steps and professing to be lifelong Labour voters does not make for a good look when pensioners are considering spending the daylight hours of winter in a warm bus.

    Liked by 1 person

  8. Jaime J: that black hole should also include the tax breaks and other incentives given to drivers/owners of EVs and hybrids. By my crude maths that is at least £5bn per year given to folk who are better-off and often wealthy: more than 3 times the “saving” from axing WFP.

    Liked by 2 people

  12. And especially since MPs earn in the region of £90,000 a year. Hardly the sort of income that places them in energy poverty, after all. It’s not as though they’re having to decide between being able to eat that next pot of caviar or throwing another pensioner on the fire.

    I jest of course. They wouldn’t dream of throwing a pensioner on the fire — they would get their Filipino maid to do it.

    Liked by 3 people

  13. John – Indeed – however on reading your link I’m confused?

    1st it states – “justifying her decision to claim £4,400 in taxpayer-funded expenses for heating her second home”

    But further down It states “Analysis has revealed that over the past five years, Reeves has claimed £3,700 in taxpayer money for energy bills”

    If the last figure is correct, that comes to £740 p/y. Or has she got a wood burner that bumps up her claim to £4,400?

    Like

  14. He is asking for £8 billion of taxpayers’ money—a completely blank cheque

    No, it’s a cheque for £8 billion!

    Like

  15. Meanwhile, across the Channel, they have a real energy programme:

    “The EPR2 programme

    EDF and Framatome are developing a simplified version of the EPR design, known as EPR2. Its aim is to incorporate design, construction and commissioning experience feedback from the EPR reactor, as well as operating experience from the nuclear reactors currently in service.

    In May 2021, EDF submitted to the State a proposal for the construction of the new EPR2 reactor programme in France. It proposes to build three pairs of EPR2 reactors, in order, at Penly, Gravelines and at either Bugey or Tricastin.

    In February 2022, French President Emmanuel Macron announced that the time was right for a nuclear renaissance in France, saying the operation of all existing reactors should be extended without compromising safety and unveiling a proposed programme for six new EPR2 reactors, with an option for a further eight EPR2 reactors to follow.”

    At least Sizewell C might get the EPR2.

    Liked by 1 person

  16. “Will Great British Energy herald UK’s green revolution?

    National energy company, which launched this week, is Labour’s strategy to end dependence on fossil fuels”

    https://www.theguardian.com/environment/2024/oct/17/will-great-british-energy-herald-uk-green-revolution-labour-ed-miliband

    …when Reeves stands up in parliament on 30 October, she is unlikely to give Maier the boost that many experts say is needed. The Guardian understands that the Treasury is determined to keep GBE within tight fiscal controls. That means it will not have the powers to borrow new money to invest, lest any debt that it accumulates could be counted towards the government’s massive debt pile, and upset delicate calculations on Reeves’s fiscal rules.

    Failing to give GBE the freedom to borrow would be a crucial mistake, according to Mathew Lawrence, the founder and director of the Common Wealth thinktank, credited with coming up with the original idea for a national energy company. “Reeves should exempt GBE from public sector net borrowing rules,” he said. “She can do that.”

    Maier is more circumspect. He appears to still hold out hope of a change of mind from the Treasury at some point, telling the Guardian: “Whether in the future we can borrow or not, I think is a discussion for later on.”

    Reeves also seems to prefer GBE to take minority stakes in large renewable energy projects. That too is a problem, according to Lawrence. “GBE should take majority stakes, in order to have control over these projects,” he said.…

    ...GBE is also critical for Scotland, for the 200,000 jobs in North Sea oil and gas, which Labour is anxious to reassure voters will still be stable for decades to come. Aberdeen was chosen as headquarters for political reasons: to help offset the complaints from North Sea oil and gas companies about the Treasury’s decision to increase windfall taxes, partly to fund GB Energy, and Miliband’s determination to block new oil exploration licences – complaints the Scottish Conservatives and Scottish National party have amplified.

    The UK government also faces a further stiff test next summer, when 400 oil industry jobs will be lost with the closure of Scotland’s only oil refinery at Grangemouth, with over 2,000 more in the supply chain threatened.

    That is intensifying pressure on the Treasury to properly fund projects on the so-called just transition, where unemployed oil workers are helped to find new jobs in the green economy, including new college courses or a government-funded “skills passport” where oil workers can transfer their oil industry skills to renewables.

    Senior Labour sources in Scotland said they wanted to see progress on cutting household electricity bills and new rules to ensure communities that host these new green energy projects, including the new pylons and subsea cables needed, get a share of the profits.…

    …Roz Foyer, the STUC’s general secretary, said 84,000 Scottish workers depended on oil and gas jobs, while the numbers employed in renewables, estimated at 6,000 people, had barely risen in Scotland over the past decade despite the heavy investment in windfarms. “The investment in GB Energy has to go disproportionately to Scotland because of the disproportionate amount of oil and gas jobs that are going to be lost,” she said….

    Liked by 1 person

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