What we know about GB Energy – and why investment in Scotland is key
THERE are so many details still to be thrashed out, such as the muchdiscussed question of where those headquarters are going to be. The shortlist, it has been claimed, is Aberdeen (the industry hot favourite), Edinburgh or Glasgow, though just last week Dumfries and Galloway was touting Chapelcross as a possible option.
While location, location, location matters, also what is key with Great British Energy is investment, investment, investment – and strategy, strategy, strategy. It’s become a running joke that this £8.3 billion-funded body is going to solve everything from bringing down bills to becoming a clean energy superpower. One post on X quipped this week that perhaps it will stop the riots as well.
We know, for example, that Sir Keir Starmer has promised to bring down energy bills by £300 a year by 2030 – and, according to a recent survey by the think tank Common Wealth – 36% of the public are now expecting that will happen.
Common Wealth argues, therefore, that this should be an immediate priority for GB Energy which should also include a customer-facing retail arm.
From the text of the Great British Energy Bill, we also know that this national company is going to involve “the production, distribution, storage and supply of clean energy”; “the reduction of greenhouse gas emissions from energy produced from 15 fossil fuels”; “improvements in energy efficiency”; and “measures for ensuring the security of the supply of energy”.
We also hear promised that GB Energy will help the UK break free from being an energy system that delivers profit to multinationals and other states, rather than building wealth for itself. In a recent statement, the UK
Secretary of State for Energy Security and Net Zero Ed Miliband, in an echo of what has been said by many Scots over Scotland’s energy, said: “We already have public ownership of energy in this country, just by foreign governments. At the moment, taxpayers in other countries profit from our energy infrastructure, but the British people are missing out.”
But how Great British Energy is going to achieve all this is still not clear, though last month brought some definition to its shape and function. More will no doubt follow when Parliament returns from recess, but it’s worth looking at a few of last month’s announcements.
One is that Great British Energy would work hand in hand with the Crown Estate – not, in this case, it should be noted, the Crown Estate Scotland, with whom talks are ongoing, but the Crown Estate south of the Border – and that this would help draw in a massive £60bn in private investment.
Great British Energy, the announcement said, was going to “co-invest in new technologies” like offshore windfarms and hydrogen, “attracting private funding”. As part of the strategy, through the Crown Estate Bill, the body would be given increased borrowing powers.
All of this is a reminder that the big debate of the coming year is likely to be investment – and how to grow the magic beanstalk of a renewables sector in which the profits don’t disappear into the pockets of shareholders, and to do so in a way that bring jobs and a just transition.
Investment in Scotland will be key to that. This is why it’s worth highlighting, given two reports out in the past week which look at what both the energy transition and Scotland’s economy needs. “Investment for a Just Transition” by the Just Transition Commission Scotland and “A Mission-oriented Industrial Strategy for Scotland: Framing Paper” have been produced by Future Economy Scotland and the UCL Institute for Innovation and Public Purpose.
The message from a reading of these two reports is that whether it’s via Great British Energy, the National Wealth Fund, Scottish National Investment Bank, or some other Scottish or UK Government funding, the push that is needed must come from government – and where it is targeted is crucial.
The Just Transition Commission’s report, for example, states that “if investment provision is left to the market alone, we will see an unjust and ineffective transition”. Scotland, it points out, must increase low-carbon investment fivefold to meet its net-zero target “with additional capital investment starting at £3.5bn per annum from 2025 peaking at over £6bn in 2035”.
It also notes that “the need for public investment on mitigation in devolved areas is greater in Scotland per person per year than the rest of the UK”.
Achieving a just transition, it says, “will require the Scottish Government to take a proactive role in stimulating investment in the economy, nurturing new and emerging industries and scalable propositions, as well as becoming the driving force in co-ordinating efforts with local government and investors”.
In a similar vein, the “Missionoriented Industrial Strategy for Scotland” report, also focuses on how to maximise the impact of funding. It notes that Scotland needs to tackle three issues – “the need to raise productivity growth, decarbonise the economy, and tackle inequalities” –and describes how the Scottish Government needs to develop a “missionoriented” approach to industrial strategy, focused on “system-wide transformation”.
It recommends the Scottish Government “moves away from acting primarily as “lender of last resort” bailing out struggling firms, and instead embraces an “investor of first resort” role – investing proactively to nurture new technological and industrial landscapes”.
What does this mean for Great British Energy? It’s a major piece in the jigsaw of how all this will work, and its shape and form is only beginning to materialise.