ALEX BRUMMER: I fear that Starmer and Miliband are creating a taxpayer-funded white elephant that will decimate our energy security

Keir Starmer has a touching confidence in the idea that by giving a grand name to his new quango – Great British Energy (GBE) – his aspirations for a zero-carbon, energy-secure nation will be fulfilled in one fell swoop.

The whole country would of course be happy with a green and pleasant country with cleaner air, lower CO2 emissions, lower energy bills and less dependence on Vladimir Putin and his gas pipelines from Russia to the West.

But the truth is that the Prime Minister and his Energy Minister, green zealot and failed Labour leader Ed Miliband, are living in a cloud of cuckoo land. They will deliver on few, if any, of the bold promises they make.

Let me explain. In the King’s Speech, Sir Keir’s new government confirmed that the GBE, the state energy company, will develop, own and operate energy projects such as wind farms, and use public money to encourage further private sector investment.

But the £8.3 billion in seed funding the Treasury has pledged for Britain’s energy transition during the current parliamentary term will be just a drop in the ocean.

Despite the overblown language, this is just a fraction of the money already being spent on ‘climate reduction’ targets by our UK-listed oil companies Shell and BP, as well as domestic energy suppliers Centrica and Scottish & Southern Electricity (SSE).

Some may find it reassuring that GBE will be led by the former boss of the British arm of German multinational Siemens, Juergen Maier, who may bring with him much-needed private sector experience.

Less reassuring, however, is the disastrous financial performance of Siemens Energy, which posted losses of £3.7 billion in 2023 alone.

When you combine this with the desperate record of past Labour governments, which managed to control the economy through large-scale government agencies such as the National Enterprise Board in the 1970s, it seems almost inevitable that the GBE will become yet another giant black hole, sucking up government money at the expense of other stretched public services.

Most importantly, by blocking future North Sea oil licences, as Starmer has done, and by temporarily shelving the prospects for new nuclear power generation, the country’s energy security is being sacrificed in the pursuit of unproven green energy solutions.

In doing so, Starmer and Miliband are exposing the nation to the danger of factories closing, the elderly and poor being left cold in their homes, and the lights going out when the wind doesn’t blow and the sun doesn’t shine.

It is also vital that the UK can maintain a minimum level of electricity generation at all times, especially if the government continues a mad dash for electric vehicles (EVs), which in many cases are proving notoriously unreliable.

That’s why Centrica-owned British Gas is investing heavily in renewing the country’s gas storage capacity at Rough off the East Yorkshire coast and is investigating other potential sites in Wales.

And that’s before we even get into the fact that Starmer and Miliband appear prepared to destroy 100,000 jobs in the North Sea oil sector, sabotage Aberdeen and lose £30bn of new investment in fossil fuels and associated engineering services to drive the ‘green revolution’.

Labour believes that by signing a deal yesterday with the Crown Estate – which controls most of the country’s coastal waters – it can somehow secure £60 billion in new investment.

Admittedly, this will be useful. The link with the monarchy alone could potentially attract some foreign investment on the basis of offering some sort of royal approval. But we should not get carried away by Labour’s fuss.

The Crown Estate has far more expertise in redeveloping properties, such as the shops on London’s posh Regent Street, than in energy.

Perhaps Miliband’s eco-whining isn’t as revolutionary as he would have us believe. Before the new deal with Labour, for example, the Crown Estate was already in talks with Scandinavian pioneers and Danish offshore energy experts.

And despite the prestigious reputation of the Crown Estate, the fact remains that the only thing that will attract investors is a competitive entry price. If the price at which the energy generated by the offshore wind farms can be sold is too low to make the projects viable, that will deter bidders.

We learned this the hard way at a crucial auction late last year, when not a single company bid for a new offshore wind farm. Why? Because the Tory government had set the price of energy too low. Even more seriously, a major proposed investment off the Norfolk coast was temporarily shelved.

The same thing happened in the US last year, when Ørsted cancelled £3.3 billion of wind projects because it could not generate the revenue it needed.

Earlier this year, BP also pulled out of its wind farm operations in New York state – costing investors a lot of money – because it was struggling to make decent returns.

The ultimate goal of all these wind farms may well have been to lower prices for consumers. The reality is that only by offering investors a higher price for energy will they come forward – and the projects will get built. It’s an inconvenient truth for Starmer and Miliband, who want them to deliver the cheapest energy possible to voters.

They were repeatedly asked about when — or even if — their “Green New Deal” would deliver lower prices for consumers. They couldn’t answer. So much for cheaper bills.

A second goal of GBE is to stimulate our manufacturing sector by creating new skills and new jobs to replace fossil fuel jobs.

This may be a noble aspiration. But in Britain, we have already sold ourselves. Most of the solar panels that are installed on the roofs of homes and factories in the UK are built in China at a fraction of the cost that they can be made in the UK.

You only have to look at Beijing’s dominance of the electric car market – and the 50 percent tariffs imposed in the US and Europe to slow imports – to understand how difficult it will be to compete with Asian manufacturing.

There is also evidence from pressure group Tech Transparency that Chinese wind turbine equipment suppliers are using cheap Uighur labour to produce wind turbines. It will be virtually impossible for British manufacturers (currently responsible for less than 10 per cent of wind turbine components) to compete.

It’s not all bad news. There is one area of ​​green technology where Britain has a competitive quality and engineering advantage. Rolls-Royce, with the help of government funding, is leading the world in the development of ‘small modular reactors’. These are mini, easy-to-build nuclear reactors based on the turbines that power nuclear submarines.

Rolls-Royce believes it can tap into a global market worth £250bn if it gets the green light from Whitehall for production in the UK. The Czech Republic has already expressed interest in buying them.

Tens of thousands of real jobs need to be created, not the Potemkin-quango positions envisioned by the new government.

So far, however, Miliband has been far from giving the green light.

We can all pray for the success of Great British Energy and the zero carbon nirvana that our government envisions.

But I fear we are creating a taxpayer-funded white elephant that will decimate our energy security.