Buy back the big six energy companies, Jeremy Corbyn? Don’t waste our money

Jeremy Corbyn’s plan to buy back the big six energy companies and National Grid shows an astonishing lack of understanding of where the industry is going.

Why buy stakes in six energy companies that are struggling to develop a business proposition and trying to restructure, in a market where all the development is elsewhere?

The big six are on a road to becoming the small six. Their share of the UK market has dropped by 10% over the last few years and can only fall further. The fact is that other companies have more to offer.

Local authorities – led by Bristol, Nottingham, London, but with a fleet of others in their wake – can better deliver the package of “energy plus energy efficiency and housing upgrades” that is the ideal option for lowering bills. So can housing associations.

For consumers who have the cash to invest in their own or community energy schemes the big suppliers are increasingly irrelevant.

This is all local ownership of the means of production. And it’s much more effective at giving users a stake than central government ownership and the CEGB – which never, to my knowledge, offered to insulate your roof, preferring instead to build another power station to pump heat into winter skies.

As for those who want to take a more active role in using energy, buy green, or just buy it at the lowest possible price, there are a bunch of new companies out there that have much more interesting propositions than the big six “old boys”, and smart technology is moving that along faster and faster.

All of these sectors are growing: they need some sensible policies to help them grow faster, not a government diverted into buying relics of yesterday’s industry.

As for National Grid, some have indeed argued that it should be in public ownership – subscribers can read Catherine Mitchell’s arguments on that in her New Power interview here.  But again Corbyn is going back to a 1950s that no longer exists. The role of National Grid is shrinking.

Now that more electricity is being generated locally, it is overwhelming local grids. The best solution to that problem is to find nearby buyers, so the power doesn’t have to get onto the wires at all. Private wire networks and micro or city grids are the watchword, and although they will never completely replace bulk transfers by National Grid, the role of the national carrier is likely to dwindle over the next few years.

You can’t buy back the 1950s, even if you have £185 billion (according to an estimate by the Financial Times) to spend. And why would you want to?

It’s a compete waste of money: there are much better ways to make it easier to give public bodies and consumers ownership of the industry.

Play it right, and you can give the public a stake in the energy industry and let the big six wither away – and spend those billions on something we really need.

 

Janet Wood

 

PS Don’t reopen any coal mines. The death toll is too high, and in any case, the ones we have are struggling.

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