Labour has been accused of “wasting taxpayers’ money” through the creation of GB Energy.
The Great British Energy Bill in the King’s Speech will create a new state-owned energy company which will invest alongside the private sector in big projects facilitating the decarbonisation of the electricity grid.
The government said the firm would be backed by £8.3bn of public money over the parliament, with significant private sector investment required to fund a decarbonised power system.
Sam Hall, the Conservative Environment Network’s director, said: “Environmentalists should welcome the ambitions of the new government to decarbonise further.
"Indeed, pro-growth planning reforms for clean energy are a welcome removal of state-imposed barriers to private enterprise.
"But the Labour government risks taking a more expensive route to net zero with some of the ‘big state’ legislation, potentially undermining long-term support for climate action.
"Conservative governments delivered the fastest decarbonisation in the G7 by unlocking private investment. But GB Energy risks crowding out private capital, wasting taxpayers’ money, and duplicating existing government bodies.
"Market-based solutions - such as competitive auctions, private investment in the grid, and a liberalised planning regime - would get clean energy built at lower cost."
GB Energy will not supply power to homes but it is designed to help fund existing and new clean technologies and work with local communities to develop small and medium-sized renewable projects.
The King said the legislation would "help the country achieve energy independence and unlock investment in energy infrastructure".
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