What’s happening? The Labour government’s publicly owned clean power company, Great British Energy (GB Energy), is to partner with the Crown Estate to accelerate offshore wind farm development. The Crown Estate, which controls most of Britain’s seabed, estimates that the partnership will get windfarm projects generating 20-30 GW of offshore power to the lease stage by 2030, enough to power around 20 million homes. The government has allocated £8.3bn ($10.7bn) of public money over the next five years to hasten the transition to clean energy, reducing reliance on energy imports from other countries and eventually bringing down household bills. The partnership could also attract up to £60bn in private investment. (City A.M.)

Why does this matter? The creation of GB Energy, officially launched and introduced to parliament on 25 July, was a key part of Labour’s election manifesto and is central to the government’s plan to deliver 100% clean power by 2030 and reach net zero by 2050. Its initial focus will be on offshore wind, but it will also look to invest in cutting-edge technologies such as tidal power, small nuclear reactors, and carbon capture. Additionally, the Crown Estate, which manages the Monarch’s £16bn portfolio of land and seabed, will be given new borrowing powers to enable it to invest more in wind projects. Last year, it made £1.1bn in profit, primarily from leasing land to offshore wind providers.  

Company aims – Based in Scotland, GB Energy intends to lead energy projects through the development stages to hasten the process before handing them back to private ownership while retaining a stake. It may also become an operator of such projects in future. It will also support local energy generation projects by partnering with and funding local and combined authorities and community energy groups. Additionally, it will seek to build supply chains across the UK and look to work with Great British Nuclear. In addition to bolstering energy security and cutting bills, GB Energy intends to create 650,000 new jobs.  

Consumer benefits – Although GB Energy will not directly supply customers, a report by Nesta and Baringa suggests that the company could cut consumer costs by £35bn by 2050. It could also reduce the £350-500bn needed to decarbonise the UK’s energy sector and save up to £1bn in costs associated with failed offshore wind projects. The report also indicates that the company could lower constraint costs, expected to hit £3bn annually by the late 2020s. Further, it claims that GB Energy could accelerate the decarbonisation of the whole energy sector system by two to four years.  

Questions raised – Despite being welcomed by many, some have raised questions regarding the partnership, according to the Financial Times. For example, industry figures raised concerns that increased state involvement could slow progress, given the private sector’s significant investments and expertise in navigating the planning process. The UK has the largest offshore wind capacity outside China, driven by private investments bolstered by government guarantees on electricity prices. Industry experts argue that GB Energy’s involvement might deter private investment, create unfair competition or duplicate efforts already underway by the Crown Estate​​.

Military involvement? – Meanwhile, seabed leases could be constrained by the Ministry of Defence (MoD), which has attempted to block some new wind farms owing to concerns about their impact on aerodromes, radar facilities, range areas, and explosive stores. Sources in Whitehall informed the Financial Times that the Crown Estate’s next leasing round for floating offshore wind in the Celtic Sea was reduced from a potential 6.5 GW to 4.5 GW following the MoD’s intervention.