Great British Energy: Making the UK a clean energy superpower

The Great British Energy Bill (the Bill), presently in its Report Stage in the House of Lords, will establish Great British Energy (GBE). GBE will be a publicly-owned, independent company focused on facilitating, encouraging and participating in the production of clean energy.

The Bill forms part of the new Labour Government’s plans to make the UK a ‘clean energy superpower’.

A key objective of GBE will be supporting the UK’s energy sector in becoming energy independent and decreasing reliance on imported fossil fuels, therefore, enhancing the UK’s energy security. The Bill seeks to reduce emissions from fossil fuels through partnering with industry, providing investment into clean energy projects and working collaboratively with local authorities. The government has set aside £8.3bn in capital funding to implement GBE’s plans.

In a unique move, GBE has partnered with the Crown Estate – which itself holds a diverse portfolio of assets and manages the seabed and half the foreshore around England, Wales and Northern Ireland. This will enable 20-30GW of new offshore wind development by 2030, expedite existing offshore projects and encourage the development of new projects in floating wind, carbon capture, tidal energy and hydrogen.

The key to GBE’s vision is the creation of new jobs. The Labour Government has stated that GBE will create thousands of new jobs across the UK, stimulating economic growth.

Challenges

Notably, the Bill does not address the delays and backlogs in planning permission approvals due to a lack of resources and expertise in local authorities. Without addressing these delays, access could be prevented to GBE’s investment and partnership opportunities. Northern Ireland is no different. Planning decisions here take longer than in any other region of the UK. On average, a NI wind farm application takes over three years to be decided.

The full role of GBE is yet to be confirmed, which poses a further challenge. Although the Bill gives the Secretary of State powers to decide the strategic priority and plans of GBE, this is yet to be released. Further information will need to be published to answer questions regarding how GBE will function and the eligibility criteria for the investment it proposes. This uncertainty will need to be addressed in the months ahead.

Northern Ireland

Although energy is devolved in Northern Ireland, the Bill applies equally to NI with the UK government, working closely with the NI Department for Economy in its implementation.

Stormont has passed a Legislative Consent Motion (LCM) in relation to the Bill – a process by which the devolved legislature indicates consent to the UK Parliament legislating on a devolved matter. The opposition in Stormont does not intent to challenge the LCM, however, has observed that there is an absence of how GBE will work in NI – specifically on how GBE will prioritise and direct its investments in the NI market.

Looking forward – regulation

With the formation of GBE comes the potential for reductions in energy costs over the next few years for UK businesses. The Bill highlights how sustainability and ESG is a focus of the Labour Government, following the trend in the private market. The establishment of GBE may provide a further incentive for businesses to adopt energy efficient strategies.

However, this all comes with a new regulatory regime – yet to be announced. This is on top of Labour’s proposed Energy Independence Act which was announced in the King’s Speech last year. The Act will introduce the legislative framework behind making the UK a ‘clean energy superpower’. Businesses should seek advice from their legal advisors regarding the applicability of the new regulations in due course.

The Bill is set to come through the House of Lord’s report stage in the coming weeks, with GBE set to reshape the UK’s clean energy landscape. Understanding the role that GBE performs will be crucial for the energy sector in the coming years.

For more information in relation to this topic, please contact Mark Stockdale, Partner, John Palmer, Partner or your usual Energy, Infrastructure & Natural Resources contact.

Date published: 19 February 2025