The Labor Party will nationalize parts of Scottish Power, the British subsidiary of Iberdrola, as soon as it reaches the government, according to a document published by its head of Energy, which the Financial Times newspaper said. The document states that the payment of nationalized assets would be made through government bonds and that the price would be decided by the Parliament.
In the estimation of the price of the transmission and distribution networks of the private companies that operate in the British market today, the Parliament would have to reduce, according to the proposal of the Labor Party, the subsidies received from the State since the privatization, the existing deficit in the pension funds for employees of the companies and the profits obtained from sales of assets.
The generation of energy would not be affected by nationalization, only transmission and distribution. Scottish Power inherited the infrastructure of the Scottish network in the center and south of the region and through SP Networks also has a distribution network in North Wales and North West England, around Liverpool. It is joining the two regions with an underwater cable, in a project with an investment of about 1,200 million euros.
The importance of the network for the business of Scottish Power is illustrated in that, in its investment plan, 2018-22, currently underway, 2,750 million euros are earmarked for the generation of renewable energy – SP wants to achieve that goal very soon – and 2,900 in the improvement of smart grids. It is in the transmission where the privatized sector has obtained its best margins.
The gradual privatization of electricity supply in the eighties and nineties has led to a structure with several generating companies, the backbone of the National Grid (national network), accompanied by the two Scottish and one Northern Irish, which replicate the old public structure, 14 regional distribution companies (two of them from SP) and a variety of supply companies.
According to the Labor document, 'Bringing Energy Home', which can be downloaded into the Twitter account of Rebecca Long-Bailey, responsible for Industry and Energy, and often mentioned as a future leader, the margins of The profits of transmission and distribution companies have exceeded 30%. They are calculations of an Intelligence Unit for Energy and Climate (ECIU), promoted by personalities of varied political ideologies.
The Association of Energy Networks (ENA), which brings together companies in the sector, has said in the past that these figures are wrong and has responded harshly to the publication of the Labor proposal. Its managing director David Smith has said that "these proposals would not achieve the objectives of Labor and would also be extraordinarily costly for the British population."
According to Smith, the six companies that own the transmission and distribution networks have invested in the last six years 2% of the total annual investment in the United Kingdom. And he added that, "since the privatization, the costs of the network have been reduced by 17% for the client". The cuts and their duration would also have been reduced.
The Labor proposal is based on a popular criticism of the three industries (electricity, water supply and rail transport) for the prices and because they operate with natural monopolies – the network, the pipelines, the roads – in such a way that the regulator really decide the benefits of the companies. In the case of electricity, there is a great dispute between supply companies to attract customers.
According to the document of the main opposition party, which would be the most voted according to recent polls, the private generation of gas and electricity would be preserved, a national energy agency, regional agencies and municipal companies would be created in a structure that would only be bureaucratic at first because it would immediately take care of attracting citizens-clients to its management.
In British politics at the moment everything seems possible. The polls say that there is strong support among the public – among voters to 'brexit', for example – in favor of nationalizing the three industries. It seems unlikely that Labor would have a sufficient majority today. And, if they had to deal with the Scottish National Party, their leader Nicola Sturgeon would have his opinion about the future, at least that of the Scottish assets.
(tagsToTranslate) Labor (t) nationalize (t) part (t) iberdrola