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'A huge setback': Labour nationalisation plans could beset clean energy transition, industry says

Image: Getty

Image: Getty

The energy sector has slammed the Labour Party's plans to nationalise energy networks in the UK, claiming they could cause decarbonisation to stall.

Yesterday Labour confirmed that, if elected, it would trigger the "immediate" nationalisation of the country's energy networks sector, bringing transition and distribution networks under national control.

“From a personal perspective, I’d be gutted if something comes into play that stalls the progress that we’re making here.” Stewart Reid, head of future networks at SSEN said in response to the announcement, speaking at this week's All Energy conference.

“There’s so much progress being made; I’ve been in the industry since it was nationalised and it will stall what’s happening. And it’s really important that we keep the momentum of this. What’s more important to us [in terms of] political principles are the planet and society and fairness and so on,” he added.

Dr Biljana Stojkovska, innovation manager at National Grid ESO, said the plans would be “a huge setback” in the journey towards “decarbonisation and zero carbon networks”.

However, Alastair Martin, chief strategy officer at Flexitricity, said that whilst he didn’t “want to come out and say I like this”, the plans have similarities to the World A scenario in the ENA’s Future World scenarios.

“So we have, for example, in World A, an institution that has never done a thing now takes over that thing and that sounds a bit like nationalisation.

“What we also need to remember when we entertain this new paradigm that is being offered is that bits of it are still there. We work in an era of quasi-institutional regulated monopolies. There’s a lot in common between that and [nationalisation]. A lot of the same problems occur.”

Barbara Hammond MBE, chief executive of Low Carbon Hub, said she could “see why” the Labour Party might be considering nationalisation, suggesting that if the UK stays on it’s current pathway it will have a “much smaller requirement for wires and switches.”

“’If we get to a situation where we’re making value out of not having to invest in that infrastructure, do we get an infrastructure that’s so small it’s not commercially viable? At which point the charging rate has to be so unfair that it doesn’t work. In those circumstances it seems to me that we might need to face the fact that it’s just a social good that we all have to pay for.”

Meanwhile, many of the other exhibitors and speakers at today’s conference expressed doubts that a nationalised energy network, such as the National Energy Agency that Labour is proposing, would be as effective as the UK’s current system and may even be detrimental to innovation, competition and decarbonisation of the energy system despite assurances in Labour’s plans that nationalisation will support renewables.

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