(Reuters) – A plan by Britain’s opposition Labour party to take the country’s energy networks back into state ownership would damage investment and delay the move to greener energy sources, National Grid said on Wednesday.
FILE PHOTO: Workers paint an electricity pylon near Lymm, northern England February 18, 2015.REUTERS/Phil Noble/File Photo
“At a time when there is increased urgency to meet the challenges of climate change the last thing that is needed is the enormous distraction, cost and complexity contained in these plans,” it said in a statement.
A Labour document, published via twitter, showed, if elected, the party plans to re-nationalize the country’s 60-billion-pound plus energy networks and establish a National Energy Agency to run the country’s energy systems.
Britain’s energy infrastructure, such as gas pipes and electricity cables, is owned by several firms including SSE, <National Grid and Spain’s Iberdrola.
Fears that the nationalization would be below market value dragged shares in SSE and National Grid down by 1.1% and 0.6% respectively on Wednesday.
National Grid owns and operates gas and electricity transmission networks in Britain, along with other assets. It has a market capitalization of 29 billion pounds ($38 billion).
It, and other network operators have been accused by Labour and Britain’s Citizens Advice bureau of generating “unjustly high profits” at a time when there is pressure to try to lower the cost of energy for households.
“Private ownership of energy networks has led to excess profiteering at the expense of investment in infrastructure,” the Labour document said.
British regulator Ofgem was told by parliament last year to cap energy prices after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”.
The regulator also said it plans to trim 5 billion pounds ($6.9 billion) from consumer bills over five years from 2021 by slashing the amount gas and electricity network firms can return to shareholders.
Data from Britain’s energy regulator Ofgem shows network costs make up around 25 percent of an average British household gas and electricity bill.
(For a graphic on ‘What costs make up a British duel fuel energy bill?’ click tmsnrt.rs/2TDnSKs)
Reporting by Susanna Twidale in London, Muvija M and Shashwat Awasthi in Bengaluru; editing by Kate Holton and Alexandra Hudson