The new Labour government has been quite active in its first phase of office, amongst other things with its flagship Great British Energy programme, formally launched in July. It will be given £8.3bn of public money over the course of the next parliament to invest in green energy technologies and projects- and jobs.
Crucially it will partner with The Crown Estate, which has a £16 bn portfolio of land & seabed assets. With its help, GBE aims to develop 20-30GW of new offshore wind farms by 2030, and will potentially bring in up to £60 bn in private investment to this end. The Crown Estate owns the majority of the seabed out to 12 nautical miles from the mainland and will lease the land on which wind farms can be built. The new agreement is only for projects around England & Wales, but Labour is also in discussions with the Scottish government & Crown Estate Scotland on support for local projects. That’s pretty vital since GBE is to be based in Scotland.
GBE will focus on 5 main areas:
Project Development: Lead energy projects through development stages, ensuring faster delivery.
Project Investment: Invest in energy projects alongside the private sector, helping them to get going.
Local Power Plan: Support local energy generation , working with local authorities & communities.
Supply Chains: Build supply chains across the UK, boosting energy independence & creating jobs.
Great British Nuclear: Explore collaboration with Great British Nuclear
The last item may raise some eyebrows, with an article in The Scotsman saying GBE ‘could do great things for renewables, but the danger is that it will be mired in political arguments and squander much of its resources on nuclear power and CCS, disabling it before it gets properly started’, but GBE’s overall proposed programme seems popular. In a post-election poll by More in Common, it was backed by 73% of all voters and 56% of Tory voters. That could be since it’s claimed it could cut bills, although not everyone was convinced by talk of big savings. Certainly not quickly. However, a new report by Nesta & Baringa says it could cut consumer costs by £35 bn by 2050, by making the delivery of low carbon infrastructure quicker and reducing the time to build offshore wind farms by 2-4 years.
All this without a lot of taxpayers money, via, in part, the use of, in effect, some sovereign wealth, along with wind fall taxes. The Crown Estate certainly does manage a huge portfolio of property and land, helping fund the Royal Family with some of the profits – the rest going to the state. Not everyone is happy with that arrangement, but The Guardian noted that ‘the government’s deal with the crown estate, which will have new powers to borrow money & invest, allows Miliband to sidestep some of the Treasury’s strict public finance rules. Officials are also hoping the link to the royal family will help win support for the new scheme from even Conservative voters, saying they want to ensure the institution is seen as non-partisan and therefore survives any future change of government.’
However, Mathew Lawrence, head of the think-tank Common Wealth, also urged ministers to allow GBE to supply customers directly, something evidently the government has so far ruled out: ‘By adding a retail option, so that GB Energy can supply households directly, we can ensure the benefits of the deal are passed directly on to households’. That could be even more popular... but it may take a while for it to happen. GBE is mainly for now just about investment aid - although Sky news said ‘ministers have left the door open for GBE to operate projects itself in the future’. And GBE’s Founding Statement says ‘Great British Energy is not simply an investment vehicle - it is a publicly owned energy company that will take stakes in the projects it owns, manages and operates,’ with, the power companies it aids & invests in also presumably selling power to the grid.
In his forward to the Founding Statement Energy Secretary David Miliband is clearly enthused by the project ‘We already have public ownership of energy in this country, by foreign governments. The policy of this government is that it is time for the British people to also own things again and build things again. Great British Energy will own, manage and operate clean power projects. It will be a company that will generate energy in its own right, working in partnership with the private sector for the good of the country.’
Well, we shall see....with there being plenty of potential for planning problems and conflicts as the government tries to meet its commitment to doubling onshore wind, tripling solar power, and quadrupling offshore wind by 2030. That’s already becoming apparent, with Labour taking a firm line. For example, the new Chancellor, Rachel Reeves, has spoken out strongly in favour of solar farms, saying they were vital, and at the GBE launch Keir Starmer pledged to take on any Labour MPs and councils that tried to block pylon networks delivering the planned new generation of clean electricity. He said ‘we will take the tough decisions to make this work. That will include decisions on planning, where we intend to make the necessary changes. And that will apply everywhere, whatever the rosette on the constituency, because we have to move this forward.’
However, he was more conciliatory about the heat pump and gas boiler issue: ‘I’m not going to tell people what to do with their gas boilers. I don’t think that’s the way that we take anybody through a transition so this is not about a government that’s going to go around the country saying you can do this you can’t do that – that isn’t the way to bring about the transition’. Instead he said, in terms of the green transition generally, ‘the best selling point for the general public is that their bills will go down and they will go down not just for the short term but for the long term.’ Let’s hope that’s how it turns out- with one of the the next test cases being the outcome of the new round (AR6) of the Contacts for Difference auction process for new renewable energy projects, which may need a bit of a boost to meet the new governments aims.
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