Keir Starmer has a touching faith in the idea that by giving a grandiloquent name to his new quango – Great British Energy (GBE) – his aspirations for a carbon-free and energy-secure nation will be fulfilled at a stroke.
The whole country would, of course, welcome a green and pleasant land with cleaner air, lower carbon emissions, cheaper fuel bills and reduced dependence on Vladimir Putin and his gas pipelines from Russia to the West.
But the truth is that the Prime Minister and his Energy Secretary, green fanatic and failed Labour leader Ed Miliband, are living in cloud cuckoo land. They will deliver few, if any, of the bold pledges they are making.
In the King’s Speech, Sir Keir confirmed that GBE, the state-owned energy company, will develop, own and operate energy projects such as wind farms using public money
Let me explain. In the King’s Speech, Sir Keir’s new government confirmed that GBE, the state-owned energy company, will develop, own and operate energy projects such as wind farms, using public money to help spur further private sector investment.
But the £8.3 billion of seed money promised by the Exchequer for Britain’s energy transformation over the term of the current parliament will be a drop in the ocean.
In spite of the overblown language, this is a fraction of the sums already devoted to ‘climate reduction’ goals by our UK-listed oil firms Shell and BP, as well as domestically owned power suppliers Centrica and Scottish & Southern Electricity (SSE).
Some argue it is reassuring that GBE will be headed up by the former boss of German multinational Siemens’s British arm, Juergen Maier, who might bring some much-needed private-sector experience to the job.
What is less reassuring, however, is the disastrous financial performance of Siemens Energy – which ran up losses of £3.7 billion in 2023 alone. Combined with the desperate track record of past Labour governments to command and control the economy through grandiose quangos such as the National Enterprise Board of the 1970s, it looks almost inevitable that GBE will become yet another vast black hole, sucking in public cash at the expense of other strained public services.
it looks almost inevitable that GBE will become yet another vast black hole, sucking in public cash at the expense of other strained public services. The PM is pictured on a visit to Hutchinson Engineering in Widnes on Wednesday
Sir Keir was joined at the wind turbine factory by Energy and Net Zero Secretary Ed Miliband
Most critically, by blocking future North Sea oil licences, as Starmer has done, and for the moment holding fire on the prospects for new nuclear production, the nation’s energy security is being sacrificed in order to pursue unproven green energy ‘solutions’.
In doing so, Starmer and Miliband are exposing the nation to the danger of factories being closed, the elderly and poor freezing in their homes – and lights going out when the wind fails to blow and the sun doesn’t shine.
It is also critical that the UK can maintain a minimum level of electricity production at all times – especially if the Government pursues a madcap rush towards electric vehicles (EV) which, in many cases, are proving notoriously unreliable.
That is why Centrica-owned British Gas is investing heavily in renewing the nation’s gas storage capacity at Rough off the East Yorkshire coast and exploring other potential sites in Wales.
Not to mention that Starmer and Miliband appear willing to trash 100,000 North Sea oil-related jobs, sabotage Aberdeen and lose £30 billion of new investment in fossil fuels, and the engineering services which go with them, to drive the ‘green revolution’. Labour believes that by signing an agreement yesterday with the Crown Estate – which has command over most of the nation’s coastal waters – it can somehow magic up £60 billion of new investment. Admittedly, this will be useful. Indeed, the link to the monarchy alone could potentially attract some overseas investors on the grounds of offering a kind of royal imprimatur. But we shouldn’t get carried away by Labour’s hoopla.
The Crown Estate has much more expertise on redeveloping real estate, such as the shops of London’s swish Regent Street, than it does in energy.
Nor perhaps, are all of Miliband’s eco-wheezes quite as revolutionary as he would have us believe. Before its new agreement with Labour, for example, the Crown Estate was already in talks with Scandinavian pioneers and Danish offshore energy experts.
And despite the Crown Estate’s prestigious reputation, the fact remains that the only thing that will attract investors is a competitive entry price. If the price at which energy generated at the offshore windfarms can be sold is set too low to make the projects viable, it will put off bidders.
We learnt this the hard way in a crucial auction late last year, when not a single company bid to run a new offshore wind farm. Why? Because the Tory government had set the energy price too low. Even more seriously, a major proposed investment off the coast of Norfolk was temporarily put on hold.
The same thing happened in the US last year when Ørsted can-celled £3.3 billion of wind projects because it could not make the returns.
Earlier this year, BP also pulled out of its involvement in New York state wind farms – at a heavy cost to investors – because of the difficulty of getting decent returns.
The ultimate goal in all of these wind farms may have been lower prices for consumers. The reality is that only by offering a higher energy price to investors will they come forward – and the projects be built. It’s an uncomfortable truth for Starmer and Miliband, who want to be seen to be providing the cheapest energy possible to voters.
They have been repeatedly questioned about when – or even if – their ‘Green New Deal’ would deliver lower prices for consumers. They couldn’t answer. So much for cheaper bills.
A secondary aim of GBE is to boost our manufacturing sector, creating new skills and new jobs to replace those in fossil fuels.
Starmer and Miliband are exposing the nation to the danger of factories being closed, the elderly and poor freezing in their homes
This may be a perfectly noble aim. But in Britain, we have already sold ourselves out. Most of the solar panels being installed on the roofs of homes and factories across the UK are being built in China at a fraction of the cost they can be made in the UK.
One only has to look at how Beijing is dominating the market for electric cars – and the 50 per cent tariffs erected in the US and Europe to slow imports – to understand how difficult it is going to be to compete with Asian production.
There also is evidence from pressure group Tech Transparency that Chinese suppliers of wind farm equipment are using cheap Uyghur labour to manufacture wind turbines. It will be all but impossible for UK manufacturers (currently responsible for less than 10 per cent of wind farm components) to compete.
It’s not all bad news. There is one area of green technology where Britain has a competitive quality and engineering advantage. Rolls-Royce, with the assistance of government funding, leads the world in the development of ‘small modular reactors’. These are mini, simple-to-construct nuclear reactors based on the turbines that power nuclear-powered submarines.
Rolls-Royce believes it is capable of capturing a £250 billion global market if it receives the go-ahead from Whitehall for UK production. The Czech Republic has already expressed interest in buying them.
Tens of thousands of real jobs – not the Potemkin quango roles envisaged by the new Government – are there to be created.
So far, however, Miliband has been slow to give the green light.
We can all pray for the success of Great British Energy and the zero-carbon nirvana envisaged by our mission-driven Government.
But I fear we are creating a taxpayer-funded white elephant which will decimate our energy security.
