GB Energy and The Crown Estate in new partnership

UK Prime Minister Kier Starmer and Energy Secretary Ed Miliband formally announced last week the set-up of GB Energy and its partnership with The Crown Estate, which the government claims could potentially attract up to £60bn of private investment into the UK’s drive for energy independence.  

The partnership aims to leverage The Crown Estate’s experience in rolling out renewable projects, specifically wind farms, and new investment and borrowing powers recently announced by government. GB Energy will bring the ‘critical strategic industrial policy that the state can provide, as well as its own ability to invest’, says the government.

The Crown Estate, which has a £16bn portfolio of land and seabed, estimates that the partnership will lead to up to 20–30 GW of new offshore wind developments reaching seabed lease stage by 2030.  

‘This innovative partnership between GB Energy and The Crown Estate is an important step toward our mission for clean energy by 2030, and bringing down energy bills for good,’ Sir Keir said in a statement. ‘This agreement will drive up to £60bn in investment into the sector, turbocharging our country toward energy security, the next generation of skilled jobs, and lowering bills for families and business.’

The agreement will see the public sector take on the role of additional early development work for offshore wind projects, reducing risk for developers and enabling projects to build out faster after leasing, the government claims. Other renewable technologies set to benefit include carbon capture and storage, hydrogen, wave and tidal energy.  

GB Energy will be backed with £8.3bn of government funding. It will have five key functions:  

• 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 GB Energy and GB Nuclear will work together.

The enterprise will be headquartered in Scotland and chaired by Juergen Maier, former Chief Executive Officer of Siemens UK.

Speaking at the launch, Ed Miliband, Secretary of State for Energy Security and Net Zero, said: ‘GB Energy comes from a simple idea – that the British people should own and benefit from our natural resources. Investing in clean power is the route to end the UK’s energy insecurity, and GB Energy will be essential in this mission.’  

Responding to the government’s plans, Caroline Bragg, Chief Executive Officer, Association for Decentralised Energy, said: ‘The speed at which GB Energy has been set up is a positive sign for industry that government understands the pace needed to deliver a net zero Britain and the role of decarbonisation in driving economic growth.’

Christophe Williams, Chief Executive Officer, Naked Energy, called the news ‘very helpful’ for renewable SMEs: ‘Hardware businesses need patient capital, which makes it difficult to secure traditional investment form fund managers looking for three-year exits. The fact that the government is willing to kickstart these projects makes it much easier to secure this investment.’

Unite General Secretary Sharon Graham noted: ‘If the government is going to invest £8.3bn in green energy, and frankly it should be more, then creating real, good quality jobs must be right at the heart of it.’

Onshore Wind Industry Taskforce

The UK government has also announced the set-up of the Onshore Wind Industry Taskforce to accelerate onshore wind’s deployment by 2030.  

The Taskforce – to be led by Energy Secretary Ed Miliband and Matthieu Hue, Chief Executive Officer, EDF Renewables – will bring together key organisations from government, industry, regulatory and other relevant bodies to drive forward the increases in onshore wind needed to meet 2030 deployment ambitions. The objectives of the Taskforce are to:

• Unlock the barriers to deployment that onshore wind developers face, identifying where there are financial, regulatory or policy challenges that are preventing the construction and operation of onshore wind projects.
• Ensure sustainability, by considering the potential impacts that onshore wind projects can have on the local environment and broader electricity system.
• Capture the benefits by identifying opportunities to facilitate continued cost reductions and ensuring investment in UK supply chains, jobs, skills and innovation.
• Commit to action, by bringing together the relevant bodies to agree the actions needed to remove barriers, ensure sustainability, and capture the benefits.

Welcoming the announcement, RenewableUK’s Chief Executive Officer Dan McGrail, who will be a member of the Taskforce, said: ‘The announcement of the Taskforce demonstrates strong backing for onshore wind from Westminster... Onshore wind already generates over 20% of the UK’s electricity a year, so it has a key role in bringing secure, low-cost power to the whole country and specifically tailored economic benefits to local communities hosting new projects. Our research shows that delivering 30 GW of onshore wind by the end of the decade would boost the economy by £45bn and create 27,000 jobs’.

Report forecasts ‘significant shortfall’ for UK target of a fully decarbonised electricity system

Meanwhile, a new report has found that solar, onshore and offshore wind are currently on schedule to account for just 44% of Great Britain’s electricity generation by 2030. According to Cornwall Insight’s latest forecast, there will be a ‘significant shortfall’ from the 67% needed for a fully decarbonised electricity system, as projected by its modelling experts.  

According to the report, the government’s plans to double onshore wind, triple solar power and quadruple offshore wind capacity would require extensive increases beyond current 2030 projections: adding 35 GW to onshore wind (17 GW above projected levels), 50 GW to offshore wind (27 GW above projections), and 55 GW to solar (10 GW above projections). These plans will face substantial challenges, particularly with funding, supply chain issues, grid connections and port capacity, it says.  

An additional £48bn will be needed on top of the £18bn that the current infrastructure buildout is already predicted to cost to meet the government’s ambition, according to the forecast. Increased funding for schemes such as Contract for Difference (CfD) might attract more business by providing greater returns, but significant global bottlenecks remain, the report says.

The path to a fully decarbonised power system would also demand a dramatic increase in storage deployment, especially for longer duration storage and hydrogen.  

Tom Edwards, Principal Modeller, Cornwall Insight, says: ‘Increasing the attractiveness of the CfD scheme for renewables by increasing budgets or administrative strike price caps is likely to draw in more developers, as the potential for better returns makes investing in Great Britain a more attractive prospect. However, this is only one piece of a large and complicated puzzle. International competition for project development coupled with material shortages are challenging issues that often lie beyond a government’s control. Additionally, updates to grid connections, increased storage and a whole plethora of other policy changes will be needed to make a 2030 zero-carbon power system a realistic target.’