“Labour will kickstart a green jobs revolution.”
It is with this cry that Jeremy Corbyn, leader of the UK’s Labour Party, wrapped up the party’s annual conference in Liverpool last week. In doing so, he sought to put Labour on the side of the renewables industry, pledging to double the UK’s onshore wind capacity to 30GW by 2030 and grow offshore wind sevenfold to 52GW.
At this stage, the plan is hypothetical and would only be implemented if Britain faced a general election – and if Labour won it. However, as Conservative Prime Minister Theresa May’s Brexit negotiations flounder, this is becoming increasingly plausible. With both Conservatives and Labour in disarray, voters may decide that there is little risk in changing. We should never underestimate people’s desire to shake things up.
What would Corbyn’s plans mean for wind energy investors, both those based in the UK and international companies with an interest in the market?
Unsurprisingly, Corbyn’s ideas would be good for the UK wind industry. The current Conservative government has supported offshore wind, but with less ambition than Labour is promising. In an agreement with industry, the government aims for 30GW of installed offshore capacity by 2030, in contrast to Labour’s 52GW in the same timeframe. Labour would also reverse Conservative hostility to onshore wind.
But Corbyn’s plan may also have some downsides for investors, and particularly the owners of Britain’s utilities. Labour’s 2017 manifesto put forward plans to nationalise England’s nine water companies and transition to a publicly-owned energy system – and, in last week’s speech, Corbyn doubled down on promises to take back control of utilities. This could end up UK electricity companies taken into public ownership.
However, Corbyn’s ambitious statements were supported by industry bodies, with RenewableUK executive director Emma Pinchbeck welcoming the announcement.
Pinchbeck said that more investment in supply chains would be needed to deliver the growth that Labour promises – and we can’t really argue with that. The target of 52GW offshore wind capacity target would not an easy one to achieve, although we are sure that UK-based wind businesses would embrace the challenge to do so.
Britain’s offshore wind industry also has a strong manufacturing and skills base – RenewableUK estimated last year that 48% of work involved in new offshore projects goes to UK companies – but the scale of expansion incorporated in Corbyn’s ‘green revolution’ would require unprecedented levels of investment in the supply chain.
And it is here we see the biggest opportunities for international investors if Corbyn’s plan was implemented. Even now, the Conservative government’s Offshore Wind Investment Organisation exists to support and encourage investment in Britain’s wind industry, and we have seen industry heavyweights get involved: MHI Vestas has a blade facility on the Isle of Wight and is looking to expand it, while Siemens Gamesa manufactures blades and assembles turbines in Hull.
Labour’s onshore wind proposals would also open up opportunities for investors and developers too, even if its deprivatisation agenda would make utilities twitchy. Those in the financial sector might also watch nervously if Corbyn gains power and enacts his proposals to end what he last week termed “greed is good” capitalism – although, given his other statements, the axe is unlikely to strike on those in renewables.
There could be enormous potential for investors in renewables, supported by strong government backing and ambitious targets, if Corbyn and co. ever did gain power.
But whatever Britain’s political landscape looks like in the coming years, one thing is clear. Both the Conservative and the Labour party are strong supporters of offshore wind, and will continue to support international businesses to set up shop in the UK.
For those working in onshore wind, though, there only looks like one good option.
Four Republican congressmen have called for a halt to US offshore wind projects because of unsubstantiated claims blaming the industry for whale deaths. But this obvious misinformation can still be a threat for the growth of the industry.