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Ruling the waves: should the UK own its offshore wind?

A new report from Labour Energy Forum makes the case for greater public ownership in the offshore sector.

Rule, Britainnia! Britons never, never, never shall be slaves to EU policy again. So goes the thinking of the Brexiteers. But little mention is made of the foreign companies ruling our waves – via offshore wind.

According to a new report by the Labour Energy Forum, over 90 per cent of the UK’s offshore wind is owned by non-UK entities. Plus, over 50 per cent of is controlled by public, often state-owned entities, like the Danish wind company DONG.

In contrast, UK public entities own less than 1 per cent of the total wind farms already built or under construction. That translates to just one single wind turbine: a lonely creature, barely off the beach at Levenmouth in Scotland.

At a time when UK already generates more energy from offshore wind than any other nation and the costs are tumbling, does this ownership model put Britain at a disadvantage?

The government's Department for Business, Energy and industrial Strategy avoids answering this question head-on. Instead it focuses on how overseas investment can benefit service businesses: “Over £11bn of investment in new UK offshore wind farms is due to take place over the next four years with around half of the expenditure in planning, building and running offshore projects going to British companies,” a spokesperson told the New Statesman.

But what about future profit? If offshore wind is eventually able to power domestic demand six times over, as the Offshore Valuation Group predicts, how can the UK public reap the rewards of potential sale abroad?

“The UK has such enormous resources we should be leading, not lagging,” says the Labour Energy Forum’s report author, Mika Minio-Paluello of Transition Economics. Theresa May’s sale of the UK’s Green Investment Bank in April ended the coalition’s experiment in public sector ownership of the green economy, and since then their ambitions have been “limited”.

It doesn’t have to be this way. Minio-Paluello has spent a lot of time in Germany and seen the benefits of the public ownership route. The city of Munich never privatised its local energy supply system, she says. They are now working towards a 2025 target of 100 percent clean energy by building offshore wind farms, including around the UK. “They hadn’t farmed the staff out to the private sector or made as many cutbacks, which meant they could engage with [the renewable transition] as a society as a whole.”

The potential gains for the UK are substantial: from more control over where money is spent and who is employed, to greater tax revenues. “Offshore wind is already breathing life back into ports like Grimsby,” the report says, “but more stimulus and direction is needed. Especially as the fossil-fuel sector gives way to the clean energy economy.”

Yet is the UK already too far behind to catch up and compete with Europe's energy giants? Creating a fully independent public offshore wind company that builds its own wind farms is not a realistic short-term goal, Minio-Paluello says. But you have to start somewhere; the important thing is to be an active partner in the process.

Some UK local authority pension funds have already put money into the Green Investment Bank’s offshore wind fund – yet the hands-off approach means they have no direct influence on how the projects are carried out, staffed and supplied. A more involved option could see UK public bodies operating within the sector in partnership with more established companies. Even as non-operating partners, such bodies could still set requirements on local content and job creation – something that is especially important considering the low union density within the sector at present, the report notes.

A joint enterprise between the non-profit company Energy for Londoners and the Danish energy giant DONG, for example, could build a new windfarm with part UK public ownership. This is not fundamentally different from the councils who already invest in onshore wind and solar farms, Minio- Paluello suggests, “it’s just bigger”.

Such a scheme would allow the UK entities to build up their experience and staffing in the sector, opening the door to grander ambitions in the future. Plus it could bring down energy costs: public companies like DONG and Vattenfall have already led the way towards building subsidy-free sites, while access to cheaper capital can be passed on as savings to the consumer.

Without such interventions, some fear a return to the ill-winds of the Thatcher era, when the revenues from the North Sea Oil boom were squandered and government stakes sold off. “I think it’s quite possible that in 30 years we will look back and ask why did we privatise all our offshore wind sector?” Minio-Paluello says. 

The Labour Party is starting to explore the options, and campaigns like Switched On London and Manchester’s Energy Democracy are also doing their part. But a wind of change must blow from Westminster too – and soon.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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Why Jeremy Corbyn’s evolution on Brexit matters for the Scottish Labour party

Scottish Labour leader Richard Leonard, an ideological ally of Corbyn, backs staying in the customs union. 

Evolution. A long, slow, almost imperceptible process driven by brutal competition in a desperate attempt to adapt to survive. An accurate description then by Shadow Chancellor John McDonnell, of Labour’s shifting, chimera of a Brexit policy. After an away day that didn’t decamp very far at all, there seems to have been a mutation in Labour’s policy on customs union. Even McDonnell, a long-term Eurosceptic, indicated that Labour may support Tory amendments when the report stages of the customs and trade bills are finally timetabled by the government (currently delayed) to remain in either “The” or “A” customs union.

This is a victory of sorts for Europhiles in the Shadow Cabinet like Emily Thornberry and Keir Starmer. But it is particularly a victory for Scottish Labour leader Richard Leonard. A strong ally of Jeremy Corbyn who comes from the same Bennite tradition, Leonard broke cover last month to call for exactly such a change to policy on customs union.

Scotland has a swathe of marginal Labour-SNP seats. Its voters opted voted by a majority in every constituency to Remain. While the Scottish National Party has a tendency to trumpet this as evidence of exceptionalism – Scotland as a kind-of Rivendell to England’s xenophobic Mordor – it’s clear that a more Eurocentric, liberal hegemony dominates Scottish politics. Scotland’s population is also declining and it has greater need of inward labour through migration than England. It is for these reasons that the SNP has mounted a fierce assault on Labour’s ephemeral EU position.

At first glance, the need for Labour to shift its Brexit position is not as obvious as Remainers might have it. As the Liberal Democrat experience in last year’s general election demonstrates, if you want to choose opposing Brexit as your hill to die on… then die you well may. This was to some extent replicated in the recent Scottish Labour Leadership race. Anas Sarwar, the centrist challenger, lost after making Brexit an explicit dividing line between himself and the eventual winner, Leonard. The hope that a juggernaut of Remainer fury might coalesce as nationalist resentment did in 2015 turned out to be a dud. This is likely because for many Remainers, Europe is not as high on their list of concerns as other matters like the NHS crisis. They may, however, care about it however when the question is forced upon them.

And it very well might be forced. One day later this year, the shape of a deal on phase two of the negotiations will emerge and Parliament will have to vote, once and for all, to accept or reject a deal. This is both a test and an incredible political opportunity. Leonard, a Scottish Labour old-timer, believes a deal will be rejected and lead to a general election.

If Labour is to win such an election resulting from a parliamentary rejection of the Brexit deal, it will need many of those marginal seats in Scotland. The SNP is preparing by trying to box Labour in. Last month its Westminster representatives laid a trap. They invited Corbyn to take part in anti-Brexit talks of opposition parties he had no choice but to reject. In Holyrood, Nicola Sturgeon has been ripping into the same flank that Sarwar opened against Richard Leonard in the leadership contest, branding Labour’s Brexit position “feeble”. At the same time the Scottish government revealed a devastating impact assessment to accompany the negative forecasts leaked from the UK government. If Labour is leading a case against a “bad deal”,  it cannot afford to be seen to be SNP-lite.

The issue will likely come to a head at the Scottish Labour Conference early next month, since local constituency parties have already sent a number of pro-EU and single market motions to be debated there. They could be seen as a possible challenge to the leadership’s opposition to the single market or a second referendum. That is, If these motions make it to debate, unlike at national Labour Conference in 2017, where there seemed to be an organised attempt to prevent division.

When Leonard became leader, he stressed co-operation with the Westminster leadership. Still, unlike the dark “Branch Office” days of the recent past, Scottish Labour seems to be wielding some influence in the wider party again. And Scottish Labour figures will find allies down south. In January, Thornberry used a Fabian Society speech in Edinburgh, that Enlightenment city, to call for a dose of Scottish internationalism in foreign policy. With a twinkle in her eye, she fielded question after question about Brexit. “Ah…Brexit,” she joked. “I knew we’d get there eventually”. Such was Thornberry’s enthusiasm that she made the revealing aside that: “If I was not in the Leadership, then I’d probably be campaigning to remain in the European Union.”