ALEX BRUMMER: As Britishvolt’s failure shows, Britain’s dreams of becoming a green energy champion rest on fragile foundations
The failure of Britishvoltwith its vaunted ambitions to create a £3.8bn gigafactory in the North East, provides a useful lesson.
Britain’s dreams of becoming a clean energy champion rest on shaky foundations. Not only Britain’s ambitions to build power plants for the automotive industry are at risk.
Liam Condon, chief executive of Johnson Matthey, warns that the UK is also at risk of losing its lead in the race to develop hydrogen.
Britishvolt is on the brink of collapse after failing to raise enough funding for a multibillion-dollar battery plant in Northumberland
Indeed, the UK’s greatest hope for hydrogen is the drive by major oil companies, particularly BP, to pioneer the field. Unlike Britishvolt, the oil company does not need to dig into the weeds to find support.
All this puts into perspective Labour’s big idea for the British Energy Company, the centerpiece of Keir Starmer’s speech at his party’s conference in September.
Labor is right to bemoan the fact that so many energy firms have fallen into foreign hands. This means that vital decisions about our government are made in Paris, Berlin and Madrid.
International investors usually make firm decisions about where to invest based on the rate of return.
But energy is so political, especially given the war in Ukraine, that national interests trump everything else.
The UK’s only new nuclear project at Hinckley in Somerset cannot be funded in the UK and is entirely dependent on the engineering and financial support of EDF, which is now wholly owned by the state. The French firm will also be crucial if the facility at Sizewell C in Suffolk is to go ahead.
The idea that a UK energy company is going to transform Britain by investing in renewable energy is fantastic. Picking green winners may be possible.
A green investment bank set up by the coalition government had several projects but was an easy target for privatization as the government looked for sources of funding.
The Labor campaign will receive £8bn of public funding. Where it will come from is unclear, since windfall taxes, even if they had a much larger yield, have already been spent several times over.
There are questions about who will lead UK Energy and whether it will be able to attract resources in a Labor government focused on the NHS, schools and social care.
Left-wing governments, even with excellent natural energy resources, do not have great energy performance, as the experience of Venezuela shows.
Starmer should switch to real-world experience of British Volta and hydrogen before trading on dreams.
The rapidly revolving doors at the Department for Business, Energy and Industrial Strategy (BEIS) make it impossible to discern any consistency in what it does.
Those who hoped that the National Security and Investment Act would finally mean that the UK’s trend of selling off its crown jewels could finally be stopped will be disappointed.
The latest deal to be scrapped is Czech billionaire Daniel Kretinski’s plan to increase his stake in Royal Mail to 25 percent.
One suspects that Kretinski is interested in the fast-growing parcel delivery arm of Global Logistics Services (GLS), not last-mile delivery, the subversive CWU union or Royal Mail’s strange plan to actually date a postage stamp.
It is debatable whether it is possible to demerge and be a commercially viable separate Royal Mail.
We know the government doesn’t seem to mind our vital communications companies, BT and Royal Mail, being under the thumb of foreign billionaires who could have no interest in customer service or building broadband for hard-to-reach neighbourhoods.
The UK may need inward investment to help close the balance of payments capital account deficit. Selling vital and historic government assets is not the answer.
And while we’re on the subject of infrastructure, don’t disagree with Michael Gove’s view that it may be time to rethink HS2.
The budget for the project may be in excess of £40.3 billion, but giving up the transport links between London and Birmingham and Manchester should not be an option.
Infrastructure, from the Elizabeth Line to Hinckley and the Thames, offers the key to increasing productivity and creating a positive legacy for the next generation.