25 July 2024

The Government has today officially launched its flagship energy policy, Great British (GB) Energy, introducing the Great British Energy Bill to Parliament. The Government has also announced GB Energy’s first major partnership with the Crown Estate.

Speaking at its launch in Cheshire, the Prime Minister Keir Starmer said the agreement with the Crown Estate would “drive up to £60bn in investment into the sector”, while the Energy Security and Net Zero Secretary Ed Miliband said that “investing in clean power is the route to end the UK’s energy insecurity”.

Read our primer on GB Energy: “Decarbonising Great Britain”

Top-line summary of GB Energy

The launch of GB Energy is a pivotal moment in the early days of the Labour Government, as the Prime Minister Keir Starmer seeks to set out a credible plan to deliver the Government’s ambitious target to decarbonise the power sector by 2030.

The GB Energy Bill is the first piece of legislation from the King’s Speech to be introduced to Parliament and is at the heart of the new Government’s agenda, leading one of the Prime Minister’s five national missions.  

The Bill confirms that GB Energy will “own, manage and operate” clean energy assets, akin to EDF in France or Orsted in Denmark, a source of initial confusion within industry. It will also play a central role de-risking and unlocking capital for the private sector.

Starmer and Miliband are keen for its speedy implementation and set out the next steps to place GB Energy on a delivery footing. Juergen Maier has been confirmed as the Chair and will now undertake a period of stakeholder engagement to inform its policy approach. An announcement on its location in Scotland is expected shortly.  

The partnership with the Crown Estate was teased at the King’s Speech, with the Crown Estate Bill also being introduced to Parliament today. The Crown Estate which owns and manages the seabed, will co-invest in new technology and lease land to GB Energy to lead on preparatory work for the private sector, including coordinating grid connections, environmental surveys and planning. This is an attempt to speed up the delivery of offshore sites and provide industry with shovel-ready land for projects.

Three key takeaways on today’s energy policy announcement

• Crown Estate partnership could provide fiscal room for manoeuvre: Capitalised with an initial £8.3bn throughout its first Parliamentary term, the Chancellor’s fiscal rules have resulted in some of the initial ambition being scaled back for GB Energy. This has caused some scepticism within industry circles about whether it can establish itself as a serious player within one parliament. The Crown Estate Bill widens the Estate’s investment powers and gives it the power to borrow money to invest. While the longer-term ambition is for GB Energy to be a self-sustaining entity that can in time contribute to the public purse, this may allow for greater financial wiggle room in the short-term to kickstart the clean energy rollout.

• Selling GB Energy to the public: Decarbonising the power sector by 2030 will require a significant increase in the rate of renewable technology being deployed across the UK. While Miliband has so far shown a willingness to rubber stamp projects, an important part of the puzzle will also be to sell renewable energy to the public. The NIMBY movement is well-organised and has proved a thorn in the side of many projects up and down the country, as well as attracting criticism from backbench MPs in rural constituencies. GB Energy will be an important branding exercise for the Government, with union flags and images of the crown expected on new infrastructure, supporting the Government to rebadge GB Energy as a national, patriotic mission.  

• The work starts here: Incoming Chair Juergen Maier and Miliband will have quite the in-tray with expectations that GB Energy will hit the ground running. They will need to announce the final location, start to recruit for key roles and establish an operating model. They will also need to undertake extensive industry engagement. There are also underappreciated aspects of the policy puzzle that need to be addressed to decarbonise the power network, including grid connections, greater whole-system planning and the rollout of grid infrastructure. Beyond having to establish a publicly owned energy company, the Department will also have to address important legacy issues including the next round of CfD auctions (AR6), the ongoing Review of the Electricity Markets Arrangements, discussions over Sizewell C, legal challenges over Rosebank and COP29.

To understand more about the Government’s energy priorities, read out Decarbonising Great Britain primer or get in touch with our team.