The UK has ambitious aims for decarbonising the economy and ahead of the last election, the soon-to-be Labour government made it clear that a new entity known as Great British Energy would be a core part of its industrial strategy. Energy secretary Ed Miliband has declared that GBE will “turbocharge energy independence and unleash billions of investment in clean power”, helping deliver net zero by 2050 and substantially decarbonising the electricity system well before that – targets outlined in the Clean Power 2030 Action Plan.
In recent months, more detail has emerged about just what GBE will entail – and what it all means for the civil servants who must make it work. The government intends to invest £8.3bn into the publicly owned green power company, funded by an increased windfall tax on oil and gas companies (from 75% to 78%, £1.2bn over the course of the parliament) and by what is described as “responsible borrowing”.
The Great British Energy bill received royal assent in May, setting the legal foundation for the creation and operation of GBE as a new, publicly owned energy company tasked with “investing in, developing and owning energy-generation infrastructure, with a focus on promoting environmental sustainability and delivering value for public money”. At the time of the bill’s passing through parliament, Miliband said it would “help to get off the rollercoaster of fossil-fuel prices and protect families’ finances”. The act also outlined provisions for ministerial oversight and the appointment of a board of directors.
GBE has started deploying funds.
Its first projects have included £180m to install solar panels to lower bills for hundreds of schools and hospitals; £10m for mayoral strategic authorities to invest in renewable energy projects; and £300m to support domestic offshore wind supply chains. These include a range of regional initiatives: in Scotland, a £4m renewable scheme has been launched to support community-led clean energy projects, including onshore wind, rooftop solar and hydropower; in Wales, nearly £3m has been allocated for local renewable projects to benefit Welsh communities.
Exactly what GBE will look like and what it will do are becoming clearer. It will be a standalone company, headquartered in Aberdeen, sitting outside of government. In a statement of strategic priorities published in September, the government confirmed that two entities, operating as separate and allied publicly owned companies, were being capitalised: GBE and GBE – Nuclear. The latter is intended to provide specialist capability and the skills necessary to help deliver the government’s nuclear power agenda, including the small modular reactor programme. The statement of strategic priorities outlines that GBE should work towards becoming a financially sustainable and self-financing organisation. Its two core objectives are: to drive clean energy deployment across the whole of the UK (acting as a strategic developer, investor and owner of clean energy projects); and to ensure that UK taxpayers, billpayers, communities and the current energy workforce benefit from the clean energy transition (by increasing public ownership and community involvement in the development of clean energy projects, and supporting jobs and economic growth across the UK).
A permanent chief executive, Dan McGrail – who has private sector experience as chief exec of RenewableUK and of Siemens Engines – has been appointed, along with board chair Juergen Maier, the former chief executive of Siemens UK. They have been tasked with producing a strategic plan by spring 2026. A GBE spokesperson elaborated, saying that the company will be “overseen by an experienced, independent board of industry and trade union experts who bring knowledge on workplace rights, building UK supply chains, and driving investment in clean energy”.
When it comes to wider staffing, the statement of priorities says GBE is expected to acquire technical expertise from across the clean energy sector, establishing a highly skilled and expert workforce. The GBE spokesperson added that “hundreds of thousands of engineers, scientists and technicians call Aberdeen home” and that GBE intends to “draw on the abundant local talent”.
According to the statement of strategic priorities, “GBE should look across the clean energy technology spectrum for opportunities to achieve its objectives, including in established and nascent technologies”, which “include, but are not limited to, opportunities in renewables, energy storage and low-carbon technologies”. GBE should seek to provide certainty to industry, in order to “catalyse investment into the clean energy sector” by derisking projects across their lifecycle, particularly at the development stage. It will need, in some cases, “to take on more risk than the private sector would on its own”.
Matthew Gill, programme director for the Institute for Government’s work on public bodies, says the statement of priorities “includes a lot of asks” and that further clarification is required on where the emphasis lies between the many priorities. “The government is effectively asking GBE to work out how to prioritise between these asks in its business plan,” he says, “but government needs to own the trade-offs. GBE should not be criticised later for prioritising one thing over another if the government has failed to provide a steer.”
GBE’s funding arrangements will be “complex by government standards”, cautions Gill, and there will be a need to ensure departmental budgets and oversight mechanisms can adapt. “They will need to respect GBE’s independence without abdicating responsibility for trade-offs that are ultimately for ministers to make. This needs working out proactively and on an ongoing basis.”
The priorities outline that GBE will not be a silent funding partner but instead must “own stakes in the projects it develops itself, as well as being an engaged and proactive co-developer with the private and public sectors, devolved and local government, and community energy groups and wider public finance institutions and bodies”.
The mechanisms by which all this happens will vary, according to the statement of priorities, and will divide into commercial and non-commercial operations. Commercial policy will involve originating, building and operating assets; and financing through equity and joint ventures for both clean energy projects and supply chain investments. Non-commercial operations will feature grants, loans, blended finance, capability and capacity support and joint ventures for local government or community groups, as well as grants for clean energy supply chains. While the civil service has experience of handling such activities, for the most part on a one-at-a-time basis, Gill says the challenge of “having all of them in one organisation is a lot” and officials will “need to learn from where they have worked – or haven’t – before… and work out how they lock together strategically”.
Then there is the question of exactly where GBE will sit within day-to-day governmental operations and its relationships with other departments. Those with obvious interests include the Department for Energy Security and Net Zero, Department for Business and Trade (competition law), Treasury (delivering oversight and capitalising projects and rules around how money can be spent and timelines), Ofgem and the Environment Agency. So will civil servants from the Scottish administration, since GB Energy will be based in Scotland (in the longer term, sites in Glasgow and Edinburgh are planned, said the GBE spokesperson, although they were unable to elaborate on what function these bases would have). The Cabinet Office will also have some involvement in relation to the wider mission of 2030 targets.
Then there is the new Mission Control, headed by Chris Stark, former chief executive of the Climate Change Committee. Such interdepartmental cross-cutting, and the related complex demands this asks of staff, are nothing new, Gill says. “That’s a perennial challenge for government – the key thing will be to work out who leads on what, and to build strong relationships in all relevant directions. There isn’t always a structural solution when the work actually being done is multifaceted.” The same pressures apply to recruitment. Gill says GBE needs to “recruit and retain a commensurate range of skills” and cautions that “it’s important that bodies aren’t duplicating, both to avoid wasted resource and to avoid unduly distorting markets”.
The government could do worse than heed the advice of the IfG, which last year published a guide, How to set up a public body, suggests Gill. “Governance arrangements are rarely prioritised after a body is established, so they must be correct from the off,” he adds. GBE could also thrive on internal and external support. “Building a new public institution can give people a shared purpose that is motivating,” Gill says. “This will be key for Labour, which put new bodies like Great British Energy at the heart of its election campaign.”
The political climate – where polling shows strong support for Reform, which has made clear its hostility to net zero – appears likely to inform the speed at which GBE hits the ground running. The Green Investment Bank, launched in 2012, was defunded by the 2015 Conservative administration but Gill believes if GBE quickly proves its value, it could survive any vagaries in political ideology. The British Business Bank, he points out, was initially a Lib Dem idea under the 2010 coalition government but was able to build cross-party trust and demonstrate delivery over time. “Implementation is key, particularly in the early years,” he says. “GBE should demonstrate it can deliver well and avoid too much mission creep. It needs particular attention in this case, given the range of parties who will have expectations. I’d advise any organisation [in this climate] to be proactive.”