Great British Energy
The Labour Government’s proposal to establish Great British Energy (GBE) was first announced in their election manifesto. Renewal Energy believes that the initial proposals, whilst still light on detail, are a refreshing example of long-term strategic policy thinking from the new government.
What is Great British Energy?
GBE is planned to be a British governmental investment body and publicly owned energy generation company headquartered in Scotland. It will own, manage and operate clean energy projects across the UK, with the aspiration of making the UK a world leader in clean energy technologies.
The Great British Energy Bill, which will bring GBE into existence is currently in the committee stage in the House of Commons. The committee stage is where a detailed examination of the Bill takes place by subject matter experts and interest groups from outside parliament. This is when any amendments to the Bill can be put forward prior to its third and final reading in parliament.
What will Great British Energy do?
The Labour Government has pledged £8.3bn of funding for GBE in the first parliament, investing in clean energy projects in partnership with private sector organisations. The government plan to pay for it by increasing the already high tax burden on oil and gas firms, and through what they call ‘responsible borrowing’.
Labour suggests that by 2030 GBE will have created 650,000 British jobs, and will increase the deployment of renewable energy capacity, to exactly what extent is still unclear. To do this GBE has three main target areas:
Co-invest in emerging technologies to speed up and scale the deployment of technologies like floating offshore wind, tidal power and hydrogen. This action aims to de-risk private sector investment.
Accelerate the deployment of mature clean energy technologies such as wind, solar and nuclear by partnering with private sector organisations and increasing internal capability to deliver energy mega-projects.
Invest in and provide low-interest loans for small and medium-scale community energy projects, such as rooftop solar, in a bid to de-centralise our energy system.
GBE will not directly supply electricity to consumers, but rather it will work with the private sector to co-invest in emerging energy technologies to make them cost-competitive with more mature technologies.
What’s in it for us?
Energy Bills: The government allege that by 2030, the plans put forward will lower typical household energy bills by £300 per year
Jobs: GBE will create a forecast 650,000 jobs by 2030
Energy Security: Home-grown renewable energy will reduce our reliance on imports and bolster our energy security
Pride: Living in a country that is aggressively pursuing a sustainable energy future
Renewal Energy’s View
Renewal Energy wholeheartedly support the formation of GBE, and believe that if passed into law, it will pave the way to a more sustainable future energy system. It is an example of long-term strategic policy thinking, in a direction that is inevitable and is certainly the right course of action.
There is of course the risk that GBE will invest in ‘dud projects’ and technologies, however for the greater good of our energy system, this is a plan worth pursuing if managed diligently.
Claims that it will reduce average household energy bills by £300 a year are in our view overly optimistic, because the price of electricity produced from renewable energy is still explicably linked to the price of electricity produced in gas-fired power stations, something that is likely to hold a significant market-share well beyond 2030.
Despite this, over the long term (a time horizon that all good energy policy should target), increasing the UK’s renewable energy generating capacity will help to bring down bills, as once built, renewables have lower operating costs than traditional fossil fuel plants.
The role that GBE will play in unlocking investment that the private sector is unable to take forward cannot be understated. It will create hundreds of thousands of skilled British jobs and lead to sustainable economic growth.
Bring on Great British Energy!
