Energy is becoming a battleground issue for this election with questions over new oil and gas licences coming up in TV debates and Labour promising to make the UK a clean energy superpower. Underlying that pledge is the promise of a new publicly-owned energy company which would be headquartered in Scotland. But how would GB Energy work? Could it really bring down prices for consumers? And what might it mean for Scotland in particular?

One of the more controversial aspects is funding, with Labour planning to raise £8.3 billion for GB Energy by extending the existing windfall tax on oil and gas companies, and by cutting the tax relief those companies can claim on new investment.

Understandably, industry players are not enthusiastic, and the SNP says up to 100,000 jobs are at risk. Like so many statistics that have been flung back and forth in this campaign that figure is contested, but what is indisputable is that the North Sea oil and gas industry is already in irreversible long-term decline. Gas production is down two-thirds since 2000, and the number of jobs directly and indirectly supported by the sector has cut in half in the last decade. These trends will not be reversed - the transition away from fossil fuels is now inevitable and the key issue is how oil and gas jobs can be replaced.

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Labour says GB Energy will invest in higher risk technologies such as floating wind farms, and green hydrogen. Along with separate investments in carbon capture and storage (CCS) and low-carbon technology manufacturing they say this will create 69,000 new jobs in Scotland. Such claims depend on a whole set of assumptions, but expanding new energy industries certainly has potential to offset the decline of jobs in oil and gas. One independent estimate, from Robert Gordon University in Aberdeen, is that the offshore energy workforce in Scotland could increase from 79,000 today to 100,000 by 2030 if existing targets for wind, hydrogen and CCS are met.

In addition, Labour is clear that GB Energy itself will be located in Scotland, with Aberdeen rumoured as the most likely HQ. This has potential to create a cluster of financial, legal, technical and other services around the company. The importance of this should not be underestimated. According to Office of National Statistics data, there are more professional, scientific and technical services jobs in UK offshore wind that those involved in construction.

So overall GB Energy could create a lot of new energy jobs, and Labour is also backing efforts to smooth the transition for workers in offshore oil and gas to move into these. However, many of these jobs are not as high quality as those in oil and gas, with poor recognition of unions and lower pay. These issues must be addressed if the transition Labour is seeking to accelerate is to be a fair one.

But jobs is only one side of the offer. What about energy bills?

Here we find a dilemma at the heart of the concept. GB Energy may help speed up newer technologies like floating wind and green hydrogen by leveraging in private investment, and lowering costs by offering cheaper capital. But listening to Kier Starmer and his potential future ministers talk, you can see the real vote-winning power of the policy is the idea of bringing down bills.

New technologies are expensive to developNew technologies are expensive to develop (Image: free)

It's true that being publicly-owned means potential profits could be fed back into the public purse, but like any company, the more it gives back to its owners in the form of a dividend, the less there will be for growth. So if GB Energy wants to play a serious role in growing new technologies like green hydrogen and floating wind, it will need to reinvest the profits it makes, rather than passing them on to customers in the form of lower energy bills.

This may sound disappointing to hard-pressed consumers. But there is another way GB Energy could help bring down prices which hasn’t been talked about much yet. The price we pay for electricity reflects its cost on wholesale markets. Most of the time, the price of electricity is set by the price of gas because we still need to use gas-fired power stations to keep the lights on.

Renewable electricity in wholesale markets is now much cheaper than electricity from gas, but the times that we can rely just on renewables and benefit from lower prices are still relatively rare. This is expected to change over time, as more renewable electricity comes online. A really effective GB Energy could speed the process up, because the more renewables we build, the faster prices will fall.

So, if well-run, Labour’s GB Energy could be a net positive for Scotland. It could contribute to offsetting the impacts of the inevitable decline of oil and gas in Scotland, bring new energy jobs, especially offshore, and speed up the expected delinking of gas and electricity prices. But it would be starting out from a relatively small base and trying to do several things at once. How it handles these trade offs will determine the difference it makes in practice.

Dr Matthew Lockwood is a Senior Lecturer in Energy and Climate Policy and Co-Director of the Sussex Energy Group, based in the University of Sussex Business School. An expert in energy policy and the political economy of climate, Matthew is a former adviser to the UK government and the Greater London Authority