Aberdeen has now been confirmed as the headquarters for Great British Energy - so focus will now turn to what it will do to accelerate the energy transition.
An interim chief executive will soon to be appointed to take the lead on launching the new company and building its Aberdeen base - along with the start-up Chair Juergen Maier, former CEO of Siemens UK.
Ed Miliband, the UK's energy security and net zero secretary, has said the company will help "to make Britain a clean-energy superpower, with a fully decarbonised power system by 2030."
He describes GB Energy as "a new national champion allowing us to reap the benefits of Britain’s abundant natural resources, with clean power projects in communities across our country, to create the next generation of good jobs, reindustrialising Britain."
What will it do?
The government has published five key functions for the company:
- Project development - leading projects through development stages to speed up their delivery, whilst capturing more value for the British public
- Project investment – investing in energy projects alongside the private sector, helping get them off the ground
- Local Power Plan – supporting local energy generation projects through working with local authorities, combined authorities and communities
- Supply chains – building supply chains across the UK, boosting energy independence and creating jobs
- Great British Nuclear – exploring how Great British Energy and Great British Nuclear will work together, including considering how Great British Nuclear functions will fit with Great British Energy.
Its founding statement, says: "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."
How will it be funded?
The UK Government has pledged to invest £8.3billion of new money into the company over the course of this parliament.
That is expected to be raised through an extended windfall tax on oil and gas firms.
However, expert are raising questions over whether the levy will raise as much as predicted, given the warnings that it will further erode investment in oil and gas.
Sheena McGuinness, head of renewables and cleantech RSM, said windfall tax revenues have been on a “steady decline since its inception” with the most recent figures showing a 29% drop between the same period in 2023.
“The historical trends support concerns about the shrinking tax base and cast further doubt on the assertion of a £1.2bn per annum uplift in windfall tax revenues which the government have ear marked to fund GB Energy," she said.
“If plans to extend and increase the Energy Profit Levy to 38% are brought in by the government, we might see a short-term increase in revenues, but the impact on future investment and behavioural shift could result in further corrosion of the tax base, in turn, revenues.
“Unless the return on capital from GB Energy outperforms the private sector early stage returns in the renewables sector, any changes to the windfall tax now may exacerbate the budgetary deficit with increased borrowing likely to fund any shortfall.”