The UK Government is claiming the biggest investment in home-grown clean energy in UK history. Industry figures share their views on how it could work 

Prince, the music icon, would have approved of the ambitious plans for revolutionising how Britain supplies power to the people. After all, his first backing band was called The Revolution and his second, New Power Generation. 

And there is a dynamism with which this Labour Government has hit the ground running as it seeks to revolutionise new power generation by making Britain a clean energy superpower with what it claims is the biggest investment in home-grown clean energy in British history. 

Recent weeks have seen Energy Secretary Ed Miliband appoint former chief executive of the Climate Change Committee, Chris Stark, to head a new mission control tasked with turbocharging UK to clean power by 2030, while the completion of Viking Wind Farm means that the UK’s combined onshore and offshore wind capacity has breezed past the 30GW mark and is now capable of powering more than 26 million homes. 

And 37 Scottish renewable energy projects with a joint capacity to generate almost 2GW of clean electricity have won Contracts for Difference in a competitive UK Government auction process, with Green Volt, off Scotland’s east coast, set to become the world’s largest floating offshore wind farm. 

Two fixed offshore wind developments and key projects in onshore wind sit alongside solar and tidal stream developments that will add to the £10bn of economic benefits delivered by renewables in Scotland each year. 

Professor Paul de Leeuw, director of Robert Gordon University’s Energy Transition Institute, says that such rapid changes are necessary if we are to reach our net-zero target, observing that “nobody has any argument about the net-zero destination, the argument is about the journey to how we get there in the most efficient way”. 

With the demand for electricity forecast to double by 2050, de Leeuw says the Government needs to pursue a ‘2,3,4 strategy’: “Double the amount of onshore wind, triple the amount of solar and quadruple the amount of offshore wind – which will require a huge amount of activity that will need a catalyst to enable that to take place.” 

Great British Energy could be the catalyst that converts the UK’s power supply. At the time of writing, the UK’s new publicly-owned clean energy company has started recruiting in Aberdeen, though Miliband had yet to confirm the location of its HQ (with Edinburgh and Glasgow still in the mix).  

The BBC was confident enough to announce on 3 September that Aberdeen has been given the head’s-up for HQ, while the official announcement was made by Keir Starmer, the Prime Minister, at the Labour Party conference in late September.  

GB Energy’s stated aim is to ‘develop, own and operate assets’, investing in partnership with the private sector. It will have a capitalisation of £8.3bn over the term of this parliament, with a view to leveraging up to £60bn more in private investment. 

The Government says it will take a stake “in projects and supply chains which accelerate technologies of the future” with the aim of placing the UK at the front of the global race for technology. 

But Paula Kidd, an Aberdeen-based partner and energy sector specialist at law firm CMS, notes that some critics have questioned the need for a public company to intervene in the energy market and have raised concerns about the potential impact on competition, regulation and consumer choice. 

“There is clearly great potential for GB Energy but further details on how it intends to implement its key strategies will be needed before the effect on the sector can be fully determined,” she cautioned. 

De Leeuw acknowledges that GB Energy has to operate within the framework, that there has to be a competitive market, and that it has to comply with the rules and regulations that apply to each territory. 

“It is right to raise these issues, but it is doable and there are mechanisms in place to make it happen,” he said. “At the moment renewable energy is still a relatively fragmented market and therefore you need big players coming in to make activity happen. 

“You need something significant to make that change happen, but you need a catalyst to connect all the dots”

Professor Paul de Leeuw

“If you think about what we need to do and how fast we need to do it – this is the fastest transition we’ve ever made and the biggest project in the UK by far and it needs a very big change, so you need something significant to make that change happen, but you need a catalyst to connect all the dots. 

“Looking at the GB Energy’s five key missions – project investment and ownership, project development, local power plan, supply chain, Great British Nuclear – they are re-plumbing, re-wiring and re-purposing the UK energy system.  

“To do that you need a core-related, planned, managed transition and you need an organisation that can do that. 

“Government can’t do everything because, ultimately, industry is going to invest. Public investment is going to be key to unlocking private capital.” 

While acknowledging that there is a risk that GB Energy could crowd out private capital, James Alexander, chief executive at UKSIF (UK Sustainable Investment and Finance Association), representing members with over £19trn in assets under management, does not consider it likely that this risk will be realised. 

“We think it’s much more likely that GB Energy, if it focuses on the core problems the UK has in terms of attracting private capital, will perform a really important and catalytic role in the sustainability energy transition of the UK,” he said. 

“GB Energy will have to work really strategically, working very closely with investors and financiers, to make sure that the work it is doing is solving the problems that investors have, rather than crowding them out of the system, because we know that there’s no way that the public sector can pay for the UK’s energy transition on its own. 

“What we need is tens if not hundreds of billions of pounds of private capital coming to the UK and GB Energy must capitalise that. 

“The real issue is to attract huge volumes of private capital that want to invest in the UK’s sustainable infrastructure but currently are struggling to do so because there’s a range of barriers, a number of which can be solved by GB Energy.” 

According to Alexander, these barriers include developing projects, structuring transactions, getting new clean energy technologies up to the point of being ready for investment from the private sector, and scaling up community energy projects. 

Other challenges he suggests GB Energy cannot necessarily address directly, but which the government needs nevertheless to tackle head-on, are the National Grid and the planning system. 

While acknowledging the recent go-ahead by regulators of the multi-billion-pound subsea cable to shift vast amounts of renewable electricity between Scotland and England, Alexander says there remain huge problems around getting grid connections for sustainable energy projects. 

“No matter how interested a private investor is in a sustainable energy project, if it isn’t going to get a grid connection for 10 to 12 years, the investor is going to run out of patience,” he said. 

“We’ve got to make sure we fix the grid, and we need to get these projects through the planning system really quickly, particularly within the context of a 2030 green energy target.” 

Acknowledging that it is still not fully apparent what the scope of GB Energy will be, Alexander emphasises the importance of the government working closely with investors to figure out exactly how it will operate. 

We’ve got to make sure we fix the grid, and we need to get these projects through the planning system really quickly.
– James Alexander 

“It is not currently clear how GB Energy intersects with other parts of the public sector such as the National Wealth Fund, the UK Infrastructure Bank, or the Scottish National Investment Bank,” he notes. 

“How it connects to these different parts of the system is really important for investors to understand so that they can go to the right place, engage in the right challenges and work directly with development organisations. 

“But if GB Energy really thinks about how it can leverage private capital, then it will be hugely consequential in terms of the UK meeting our net-zero energy generation targets in 2030. 

“And private capital brings with it huge opportunities for growth and jobs – this is not just about using public money to pay for the UK’s energy transition, it’s about building the future and the backbone of the UK’s future sustainable economy.” 

When he presented the Great British Energy Bill, Miliband said that “in an unstable world, the only way to guarantee our energy security and protect bill-payers permanently is to speed up the transition away from fossil fuels and towards home-grown clean energy”. 

Within weeks it was announced that a typical household’s annual energy bill is set to rise by £149 in October under the new price cap. People using an average amount of gas and electricity will pay £1,717 a year, a 10 per cent rise compared with now. 

The rise in the price cap, set by the energy regulator Ofgem, is the result of higher prices on the international energy market, Ofgem said, owing to increasing geopolitical tensions and extreme weather driving competition and demand for gas, which determines the price of wholesale electricity