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UK taxpayers to own majority stake in new offshore wind farms under Labour plan

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UK taxpayers to own majority stake in new offshore wind farms under Labour plan

The U.K.'s opposition Labour Party plans to build 37 new offshore wind farms by 2030 under majority public ownership, should it get to form a government after the next election.

Rebecca Long Bailey, Labour's shadow business and energy secretary, announced the party's People's Power Plan at its annual conference in Brighton on Sept. 24. While Labour acknowledged the results of last week's renewable energy auction, which yielded record low prices for offshore wind, Long Bailey told the conference, "We can't rely on the market to act fast enough."

Under the plan, 52 GW of wind farms would be developed and operated by Labour's regional energy agencies, with the public owning a 51% stake. The new capacity would require £83 billion of investment from both public and private sources, Labour said, including £58 billion in limited-recourse project finance from the private sector.

Should the plan be implemented, 20% of the profits generated by the wind farms would flow into a fund injecting up to £1 billion into new amenities and public services for coastal communities. The plan would also create at least 67,000 jobs in the offshore wind sector, particularly in Scotland, Yorkshire and the Humber, East Anglia and North-East England, Labour said.

Commenting on Labour's proposals, Hugh McNeal, CEO of industry association RenewableUK, said, "It's right that we increase the level of ambition for offshore wind to meet our net zero emissions target in a way that benefits consumers and boosts the economy. We've now reached a point where industry can develop new offshore wind without the need for subsidy or taxpayer investment, so we need more detail from Labour on these headline proposals."

Electric vehicle boost

In addition to offshore wind, the regional energy agencies in Labour's proposal would own and operate the U.K.'s electricity and gas distribution networks, install solar panels on 1.75 million homes and deliver a "mammoth electric charging expansion" for electric vehicles, the party said.

The development of electric mobility would include a collaboration with the private sector to build three battery production plants, so-called gigafactories, Long Bailey told the conference. Metal processing plants for recycling the rare metals used in batteries would also be built. "This will tackle the detrimental environmental and human rights impacts associated with battery production," Labour said.

Under the plan, £3.6 billion would be invested into an electric vehicle charging network, and 2.5 million interest-free loans would be available for purchasing electric cars. The automotive industry would also be invited to bid for a share of £3 billion in equity finance to invest in electrification, match-funded by the companies themselves. Additional investment would go toward research and development of new technologies.

"Investing in our electric car industry and new charging infrastructure, while supporting people and businesses with the move to low-emission vehicles, is exactly what we need," Josh Hardie, deputy director-general of industry group CBI, said in response to Long Bailey's speech.

However, renationalization would hugely disrupt the investment needed in the energy sector to decarbonize, Hardie added. "The Labour Party needs to work with business to make the transition a success."