The transition to net zero is “the economic opportunity of the 21st century”, energy secretary Ed Miliband said on Wednesday.
He described the opportunity as the “most important context” for the discussions being had by government in the energy sector.
“There’s been a long-standing issue in our country about creating the good jobs at good wages that people want to see,” Miliband said. “We haven’t done enough for them. If you want our growth in our economy, what are good jobs in our economy? This is absolutely at the core, but we haven’t done enough as a country.”
The Confederation of British Industry (CBI) published a report last month showing that the net zero economy grew three times faster than the economy as a whole last year.
That report showed the economic opportunity also led to a 10.2% additional increase in employment and higher average wages.
Miliband said that Britain has been “losing out” in the race to equip the country with renewable energy jobs, adding that is “what the government is determined to do”.
“Denmark has almost all times as many renewable jobs per capita,” he said. “Why haven’t we captured these jobs?”
A lack of “industrial policy” is the reason Miliband cited for falling behind in the race to create renewable energy jobs.
“Industrial policy is at the heart of what we’re trying to do with GB Energy and capitalising, public investment, as part of that,” said Miliband.
Despite Jonathan Reynolds’ eight months as trade secretary, the government has “lost” its “muscle memory”, according to Miliband; something he said it is now “regaining” under his leadership.
He said the role of the state is to provide a “framework” for industry and break down the barriers to private investment. He made a call to make “public investment and crowd in private” investment, adding that many of the lessons in reaching net zero have been learned so far from China.
“That’s the sort of fundamental core insight of what we’re talking about today, catalytic public investments and its role in partnering with the private sector,” he said.
Seeking to funnel public and private investment in net zero was a catalyst for setting up the original wealth fund Great British Energy (GB Energy), Miliband said.
A poll by More in Common last June showed that 63% of voters support the role of GB Energy last June, but that dropped this month to just 55%.
He made the comments while speaking at an event in Westminster, London, on Tuesday to celebrate the launch of a new report by the Institute for Public Policy Research (IPPR), ‘2030 and beyond: Great British Energy’s role in the green transition’.
GB Energy may ‘disappoint’ without funding
In the wake of reports that government funding might be slashed for GB Energy from £8.3bn as slated, the IPPR report called for the publicly owned clean energy company to be “fully funded” so it can supply 5% of electricity within five years, totalling around 8.5GW.
Only £100m was allocated in the Autumn budget to cover the company’s first two years, though £3bn was earmarked to support local communities.
The IPPR report warned that without “bold, but focused” actions the company – due to be formally established this spring – will “disappoint expectations” and fail to meet its original objectives. It called for the company to “own and operate” all its assets.
“Only by achieving at least a 5% share of national electricity distribution in the 2030s will GBE succeed in fulfilling the government’s aim of lowering energy bills,” it said in a statement.
While speaking on Wednesday, Miliband cited companies such as Ørsted, Statkraft, Vattenfall and EDF, all state-owned energy companies that have transitioned away from fossil fuels to renewables.
Nine out of ten countries creating clean power in Europe have homegrown “national champions”, according to Miliband, a role he aspires for GB Energy to play.
But whereas Europe’s largest state-backed renewable energy companies are developers with big stakes in offshore wind, GB Energy’s interim chief executive Dan McGrail said on the sidelines that the national energy company will aim to be a clean energy generator, not a developer.
This will be achieved by taking stakes in projects in fledging industries such as floating offshore wind, rather than developing large-scale offshore wind projects.
“Why GB energy?” said Miliband, adding, “The answer is quite simple, which is that we looked at all the countries in Europe that were the winners in the global race for renewable jobs.
“We reach a pretty clear conclusion, which is that every real European leader in this area that was getting the economic gains from clean energy.”
Miliband said he wants British taxpayers to “be able to reap the benefits” of wind energy just as Swedish taxpayers benefit from the energy supplied by Vattenfall.
Another big future investment will be “rewarding UK manufacturing” in allocation round seven (AR7), he said.
The UK aims to decarbonise the electricity system by 2030 to 2035, and to reach net zero nationally by 2050.
