National Grid has hit back at the Labour party’s renationalisation plans, describing them as an “enormous distraction” from the issue of climate change.
Labour has published details on its proposals for publicly owned energy networks in a document entitled Bringing Energy Home.
A spokesperson for National Grid said the proposals for the state-ownership of the networks would only serve to delay the “huge amount of progress and investment” that is making the UK a “leader” in the move to green energy.
They said: “National Grid is one of the most reliable networks in the world, we are also at the heart of the decarbonisation agenda.
“Only a few days ago we broke the record for the longest period of time the country has gone without coal generation.
“We deliver reliability, investment and innovation for just 3 per cent of the average energy bill.
“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.
“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.”
Scottish Power has also hit out at the report.
A spokesperson told Utility Week: “Scottish Power is one of Scotland’s biggest companies supporting thousands of jobs.
“We have consistently invested and spent more in Scotland and the UK than we have made in profit or paid in dividend.
“This year Scottish Power is investing a record £7 million every working day, building more windfarms and upgrading the electricity grid.
“Our energy networks business runs a 99.9 per cent reliable network that costs bill payers 35p per day.
“It is driving forward Scotland and the UK’s ambitions for a decarbonised future by connecting windfarms and delivering smart grids that will help us switch to electric vehicles.
“It is at the heart of plans of making Scotland a carbon net zero country by 2045.”
The transmission and distribution systems could be broken down into “multiple” structures under Labour proposals for renationalising the energy network that could also see investors not paid the market rate for their assets.
A report in The Telegraph claims that Labour is planning to employ the same legislative tools used to nationalise Northern Rock in order to justify naming its own price for the companies.
Furthermore The Financial Times reports that shareholders will be compensated but not necessarily at market prices due because of deductions to take account of “asset stripping since privatisation”, state subsidies since the 1980s and pension fund deficits.
The water industry is earmarked to be the first utility to be nationalised should it win power at the next general election.
Last week it was reported that senior utilities analysts at Barclays accused the Labour party of giving an unrealistic valuation of water companies and how much it would cost to renationalise that industry.
In a circular seen by Utility Week the investment bank’s utilities research team references the “lowball number on valuation” which has come to light following another leaked Labour document.
Labour’s leader Jeremy Corbyn plans to renationalise the water industry at a fraction of the sector’s market value and would limit the level of compensation to “less than £20 billion”, according to an article in The Sunday Times.
In response Peter Simpson, chief executive of Anglian Water, told Utility Week: “Labour’s proposals to renationalise the water industry and buy back the water companies at less than half their market value would spell disaster for customers, shareholders – many of whom are public sector pension funds – and the environment too.”
Shadow chancellor John McDonell used his keynote speech at his party’s conference to unveil plans for a publicly-owned water system.
He said that it would be run by local councils, workers and customers under a new ownership model that seeks to avoid the top down, centrally control that characterised post-war nationalisation.