New report provides detail on the potential role of Great British Energy

8 July 2024 - RenewableUK press release

A report published today by RenewableUK shows that Labour’s plans to set up GB Energy as a state-backed company to invest in new renewable energy projects can play a positive role in supporting emerging technologies and the transition to clean power, as long as it is set up in a way that does not disrupt the energy market.

The report, “Great British Energy – from pledge to reality”, compiled by consultants Public First, recommends that Labour now outlines a clear vision for GB Energy (GBE) as soon as possible, so that it can begin operating within the next 12 months. The report emphasises the benefits of making GBE an operationally independent company, to avoid any risk of politicians or civil servants influencing its actions on a day to day basis, as policy churn is damaging to investment.

It also suggests that GBE should focus initially on investing in onshore wind and solar projects, as these are quick to build and bring stable revenues. Polling by Public First conducted for this report shows that GBE’s involvement in projects could increase local support for them, as a publicly-owned company is seen as a trusted body to support community consultations. During the election campaign, Labour stated that one of GBE’s missions is to enable local people to generate their own power, increasing community ownership of renewables by distributing grants and loans for small-scale generation.

The report advises that GBE could invest in projects at an early stage of their development to minimise risk, initially taking minority stakes in projects and entering joint ventures with the private sector to enable it to develop its expertise and grow its capital base. In the longer term, it could move to majority stakes and potentially develop its own projects. It also recommends that GBE should eventually diversify into other clean technologies such as floating wind, tidal power and energy storage which are set to expand over the next decade, as well as potentially supporting the development of the supply chain for new grid.

The report highlights the fact that the scale of investment to meet Labour’s target of clean power by 2030 is vast, so there is plenty of space for GBE to invest its initial endowment of £8.3bn without displacing any private investment. However, the report is also clear that Labour should also maintain a focus on unlocking the billions of pounds of private sector investment which will be required to deliver Labour’s clean energy mission, including over £100bn of private investment needed to deliver Labour’s target of 60 gigawatts of offshore wind by 2030.

RenewableUK’s Chief Executive Dan McGrail said:

“As this report shows, GB Energy has the potential to play a positive role in the energy transition, with a focus on innovative technologies like tidal stream, and supporting community wind and solar projects. We’re also clear that, with the right framework, the new Government can ensure that Great British Energy doesn’t disrupt the billions of pounds of private investment required to deliver their clean energy mission.

“We’d advise that the new Government re-commit to Great British Energy in its first days of office, with a clear outline of its purpose. And if the Prime Minister really wants to increase investor confidence and make clear his intention to deliver on Labour’s manifesto, he should end the ban on onshore wind and increase the number of wind, solar and tidal stream projects he will unlock by attracting private investment in this year’s clean power auction.”

Notes

For further information, contact

Robert Norris, Head of Communications
07969 229 913 Robert.Norris@RenewableUK.com