A Labour government would hand greater powers to the Future Systems Operator (FSO) and give its public-owned GB Energy company scope to be lead investor on projects, Alan Whitehead has revealed.
In a fringe meeting at the Labour Party Conference, the shadow energy security minister fleshed out the opposition’s reformation plans for the sector.
Speaking on the day after the Labour Party members backed a motion to nationalise the energy sector, Whitehead ruled out such a move, while adding that GB Energy could take stakes in new projects.
“It makes no sense to buy up or control the kit of the past but it makes a lot of sense to buy into and in some instances control the kit of the future,” he said.
“That means absolutely, number one, not buying stuff up but buying into stuff.”
By offering guarantees Whitehead said GB Energy could de-risk projects, reducing the cost of capital and thus “crowd in” private investment.
“GB British energy will have a variety of roles, sometimes to effectively be the catalyst for those developments, sometimes to be the part owner of those developments, sometimes to be the lead investor in those developments and bring other people in on the back,” he added.
As an example, this could include giving a “substantial amount” of seed capital to local decarbonised energy projects that suffer from a high risk failure, he said.
His comments followed shadow energy secretary Ed Miliband’s conference speech in which he pledged £1 billion of GB Energy’s £28 billion annual budget will be earmarked for local projects.
GB Energy will be “a fairly lean vehicle” but one that must start to be established within days if Labour wins the next election, Whitehead said: “It will need to be starting literally in Labour’s first couple of days in office so we can do that work at a very early stage in the first Labour administration.”
He also said that while supporting the government’s decision to split out the FSO from National Grid into a stand-alone public body, Labour believes that the government has given the systems operator a “limited brief”.
“We think it should have considerable further powers to operate as a system architect, exactly the sort of public driver for the planning, operation and management of the system for the future.
“That’s certainly what we’ll do in government: give it those additional powers and arrangements to make it much more of a system architect.”