The Labour Party has unveiled fresh plans concerning how it will decarbonise and democratise energy in the UK, with headline ambitions of renationalising the National Grid and installing solar panels on 1.75 million homes.
Published late on Wednesday (15 May), the party’s ‘Bringing Energy Home’ blueprint includes plans to fit rooftop solar arrays on one million social homes and 750 million properties owned or rented by low-income families. Labour claims that this would save each property an average of £117 on its annual electricity bill, with any surplus power sold back to the grid. Through these sales, local authorities could collectively make £66m annually, the party added.
Under the solar programme, central government would fund all of the arrays installed on social housing. The low-income household part of the scheme could similarly be funded by a government grant, or could operate in the form of interest-free loans.
Labour claims that the installation of these panels would create up to 16,900 jobs in the renewables and housing sectors and prevent the emission on 7.1 million tonnes of CO2 per year.
The party’s leader, Jeremy Corbyn, is due to give an official speech on the plans later today, alongside shadow business and energy secretary Rebecca Long-Bailey. He is expected to say that Labour’s vision will “benefit working-class people with cheaper energy bills and more rewarding well-paid jobs” while enabling “new industries to revive the parts of our country that have been held back for far too long”.
“In this country, too often people are made to feel like the cost of saving the planet falls on them,” he will say.
“Too many think of green measures as just another way for companies or the Government to get money out of them, while the rich fly about in private jets and heat their empty mansions.”
“By focusing on low-income households, we will reduce fuel poverty and increase support for renewable energy. Social justice and climate justice as one. Environmental destruction and inequality not only can – but must – be tackled at the same time.”
In the wake of the incumbent Government’s decision to axe the Feed-In Tariff (FiT) scheme, which provided payments to owners of small-scale renewable generators at a fixed rate per unit of electricity produced, representatives from the renewable energy sector have broadly welcomed Labour’s proposals.
The FiT scheme had been one of the key factors contributing to the huge increase in solar photovoltaic deployment from 100MW in January 2010 to 12.7GW at the end of 2017, of which 4.8GW was supported by FITs. It closed last month and has not yet been replaced.
Britain’s solar industry is also facing the possibility of higher VAT rates. HMRC this month unveiled proposals to end the 5% reduced rate of VAT which currently covers standalone solar and combined solar and storage projects of all sizes, raising it to the full 20% rate in cases where the cost of the materials exceeds 60% of the total installation costs.
Responding to Labour’s proposals, industry body the Solar Trade Association (STA) said they would provide a “major boost” for community solar and combat recent “unhelpful” policy changes.
“The solar industry would relish scaling-up rapidly to deliver on these commendable ambitions which would see deployment rates double compared to the past decade,” the STA’s director of advocacy and new markets Léonie Greene said.
“We are particularly pleased to see Labour’s focus on social housing, since solar can save households potentially hundreds of pounds off their energy bills. Current policies deter those who need solar the most from accessing it, which is a great shame.
“We are also pleased to see a clear acceptance that solar must be treated fairly, both in terms of complex new network charging regulations and ensuring fair market payments for the smallest generators. At a minimum, Governments really must provide a level playing field to enable popular and cheap technologies like solar to thrive.”
Octopus Energy, the UK’s only electricity supplier which currently allows customers to sell back excess energy from their domestic solar panels, has also welcomed the plans, with its founder and chief executive Greg Jackson hailing them as a “commendable” commitment to decentralised renewables.
“Policy detail aside, the key to success and a greener future is to bring technological innovation to the UK energy market, fast,” Jackson said.
“We need to transform our grid to become a ‘people-powered’, decentralised energy system where increasing numbers of citizens can become generators as well as consumers.”
A further key facet of the ‘Bringing Energy Home’ blueprint is the renationalisation of the UK’s energy transmission and distribution facilities.
It lays out plans to break the existing national system down into “multiple” structures by creating a National Energy Agency to own, operate and maintain infrastructure across these areas. According to the Financial Times, Labour would also nationalise Britain’s interconnectors that allow electricity to be imported and exported.
Mirroring proposals already outlined for renationalising water networks, an incoming Labour government would make deductions to take account of “asset stripping since privatisation”, state subsidies into the networks since the networks were privatised and pension fund deficits. Like the water industry, investors would be compensated by swapping their shareholders for bonds issued by the Treasury.
While details as to how these new structures will be overseen, or how decarbonising networks in line with the Climate Change Act will be paid for under this structure, are sparse, Corbyn insists the move would usher in a “green industrial revolution” and help the UK tackle the joint challenges of climate change and social inequality.
However, the National Grid said the proposals for the state-ownership of the networks would delay the UK’s transition to a low-carbon power sector. The operating firm for National Grid recently claimed that Great Britain’s electricity system can operate as a zero-carbon grid by 2025.
“National Grid is one of the most reliable networks in the world, we are also at the heart of the decarbonisation agenda,” a National Grid spokesperson told edie’s sister publication Utility Week.
“At a time when there is increased urgency to meet the challenges of climate change, the last thing that is needed is the enormous distraction, cost and complexity contained in these plans.”
“These proposals for state-ownership of the energy networks would only serve to delay the huge amount of progress and investment that is already helping to make this country a leader in the move to green energy.”
Scottish Power and the Conservative Party have also criticised the plans, with the Tory vice chairman for policy Chris Philp claiming they could cost taxpayers as much as £100bn.
Green New Deal
In response to Labour’s blueprint, grassroots movement Momentum is urging Labour to adopt “more radical and transformational” policies surrounding the environment and social equality in its next manifesto.
The group is specifically calling on Corbyn to back a Green New Deal for the UK. Such a policy framework would bring about a new approach to economic prosperity that guarantees decent work, ownership and democracy across sectors, by placing society and the planet at the heart of all key policies and growth opportunities. It encapsulates all the requirements of a net-zero carbon target, but does so by focusing on societal prosperity.
Momentum’s recommendation for a strong Green New Deal is for a net-zero target to be set for 2030. The Government is currently considering whether to adopt the Committee on Climate Change’s (CCC) recommendations on legislating for net-zero by 2050 – a date which the body’s chief executive, Chris Stark, has claimed is the earliest by which the UK can create a zero-carbon economy without risking sizeable economic and social damage.
Current Labour policy is that Britain should hit net zero “before” 2050, but the party has not set a specific date.