Great British Energy’s Founding Statement confirms vision for energy champion

The new Labour government in the UK has delivered a key election manifesto promise by introducing a bill to establish Great British Energy, a state-owned company to facilitate clean energy development, a reduction in greenhouse gases, improvements in energy efficiency and to ensure energy security of supply. The Great British Energy Founding Statement, released shortly after the bill, provided initial details on the policy and functions of Great British Energy, confirming its scope to be involved in all aspects of renewable energy development. From funding to delivery and operation of energy assets, Great British Energy has great potential to modernise the UK’s energy system. 

Below we outline the role of Great British Energy and our initial thoughts on this potential.

Independence and funding of Great British Energy

In its announcement, the Government clarified that Great British Energy will be wholly owned by the Secretary of State for Energy Security and Net Zero and overseen by an independent fiduciary board (chaired by Jürgen Maier CBE, former Chief Executive of Siemens); trade unions will also have representation within the company. The bill makes clear that Great British Energy is established as a company independent of the Crown which, coupled with its ability to own and invest in projects, could support more investment and enable more ambitious projects.

The initial set-up will allow for flexibility of governance and powers and the government commits to £8.3bn of funding during this parliament (although the longer-term aim is for Great British Energy to become financially sustainable and self-financing). Additionally, Great British Energy will work with the new National Wealth Fund and the UK Infrastructure Bank to enhance investment opportunities and leverage public and private funds to maximise impact. Those active or interested in investing in renewables projects will wish to explore these arrangements, including how government involvement will overcome common project barriers.

Project ownership and delivery 

The Founding Statement confirmed that one of the primary roles of Great British Energy will be as a project delivery agency. It will own energy projects and have direct involvement in the execution and oversight of those projects to ensure they align with national net zero goals and standards. Its initial focus will be on less mature energy generation such as floating offshore wind, carbon capture and other early-stage technologies.  

Great British Energy also aims to be involved in the early development stages of projects as an accelerant – the Founding Statement suggests this could take the form of land assessments and environmental surveys to planning consent and securing grid connections (currently a significant challenge and delay factor for the UK energy sector). In principle, by taking on these preliminary responsibilities in the development process, Great British Energy will allow the private sector to focus on the construction phase, potentially speeding up project timelines and reducing bottlenecks through efficient project delivery.

Crown Estate partnership

Great British Energy has already entered into a partnership with The Crown Estate, leveraging the Crown’s significant footprint of seabed leases for development of marine energy projects (such as offshore wind and tidal energy) with a view to lowering risks for developers. The announcement states that there is the potential to deliver 20-30GW of extra offshore wind seabed leases by 2030, bringing in an estimated £30-60bn of private investment. The ‘Great British Energy: Crown Estate’ partnership extends to ports, to fulfil Great British Energy’s wider aim of delivering a comprehensive package of support for robust and resilient domestic clean energy supply chains.

Community-led generation: the Local Power Plan

A further key aim of Great British Energy is the ‘Local Power Plan’, a partnership with Local and Combined Authorities to develop community-led power generation at a local level. The Local Power Plan will see the roll out of small and medium-scale energy projects to support a more decentralised energy system using local distribution systems rather than main grid, enabling communities to directly contribute to (and benefit from) national net zero goals. This community-led approach aims to empower local communities to generate their own energy, promote energy independence and potentially partner with private developers in shared ownership projects. 

Alongside the announcements on Great British Energy, the UK government confirmed a number of complementary proposals:

• The renewable energy auction budget will increase by over 50% to £1.5 billion for Allocation Round 6 with £1.1 billion for the offshore wind auction (which last year was unsuccessful in securing any additional capacity). 
• Consultation on changes to the National Planning Policy Framework to provide a more supportive framework for onshore wind, other renewable and low carbon energy generation, and related infrastructure proposals.

The speedy establishment of Great British Energy accelerates the UK’s journey towards a more sustainable, resilient and independent energy system. Considering the promised funding and increased budget for renewable energy auction, partnership with the Crown Estate, and project ownership structure, in conjunction with the proposed changes to planning rules, Great British Energy has the potential to accelerate the UK’s clean energy transition significantly.