Thursday, December 5, 2024

Great British Energy: The New Net Zero Priority

The new Secretary of State for Energy Security and Net Zero, Ed Miliband, has outlined key energy pledges, reforms and mechanisms for delivering energy independence and cutting bills through clean power by 2030.

This will be attained by doubling onshore wind, tripling solar power and quadrupling offshore wind. Investing in carbon capture and storage, hydrogen and marine energy. Extending the lifetime of existing nuclear plants. Retaining a strategic reserve of gas power stations whose existing licences will not be revoked, although new ones will not be issued and creating a publicly-owned company called Great British Energy.

Great British Energy Arrives

Great British Energy (GBE), will be backed by £8.3m of new investment to create jobs and build supply chains across the UK, and facilitation of local energy production. Great British Energy’s key functions will focus on project development, investment, local power plans, supply chains and nuclear.

GBE will lead projects through development stages to speed up their delivery, whilst capturing more value. It will invest in energy projects alongside the private sector, to help get them off the ground, especially local energy generation projects which will require local and combined authorities and communities to work closely together. This demands new supply chains across the UK, boosting energy independence and creating jobs.

Work will also commence exploring how GBE and Great British Nuclear will work together.

GBE will also require the public sector to take on a new role for offshore wind projects lowering risk for developers and enabling projects to be built out faster after leasing and crowding in private sector investment. It will also help boost new technologies such as carbon capture and storage, hydrogen, wave and tidal energy. 

Investment in clean power will be unlocked through a new partnership between Great British Energy and independently operated The Crown Estate in an ‘unprecedented’ partnership which could leverage up to £60bn of private investment leading up to 20-30GW of new offshore wind developments reaching seabed lease stage by 2030, enough power for the equivalent of approximately 20 million homes.

Designed to boost Britain’s energy independence, this partnership will invest in homegrown power and, with accompanying reforms to policy, cut the time it takes to get offshore wind projects operating and delivering power by up to half. 

Taking Control

Former chief executive of the Climate Change Committee, Chris Stark, has been appointed to lead the new Mission Control, bringing together industry experts to accelerate the transition away from volatile fossil fuel markets to clean, UK-generated energy. It has been established to remove obstacles, identify and resolve issues, and speed up the connection of new power infrastructure to the grid by working closely with key organisations including the regulator Ofgem, the National Grid, the Electricity System Operator and National Gas Transmission. One of the first goals is to establish a National Energy System Operator (NESO) which will adopt a ‘whole system approach’ to strengthening energy security, helping to deliver net zero and ensuring operational costs are affordable in the long term.

With Labour pledging to double onshore wind capacity to 35GW by 2030, yet no large-scale wind farms have been built in England for many years, a new Onshore Wind Taskforce has been set up, also chaired by Ed Miliband. The task force will ‘drive action across industry and Government to unblock barriers to rapidly increase onshore wind capacity’.

With aims to also triple solar power to 50 GW by 2030 three nationally significant solar farm projects have received consent to proceed through reactivation of the Solar Taskforce, which was started under the previous government. The task force’s Solar Roadmap will be revised in line with Labour’s ambitious new goals.

Funding a net zero future

Ed Miliband also announced a record £1.5 billion Contracts for Difference (CfD) budget to build new green infrastructure and deliver homegrown clean energy projects by 2030. 

Funding will accelerate the delivery of clean, cheap, low-carbon electricity to businesses, generated by renewable energy technologies such as wind turbines and solar panels. It includes £1.1 billion for offshore wind, £185 million for established technologies such as onshore wind and solar, and £270 million for emerging technologies such as floating offshore wind and tidal.

Bidding for funding will be via the government’s sixth renewable auction (CfD), providing initial subsidies to developers for clean electricity projects with a built-in design to keep operational costs low. The subsidies are paid back when wholesale electricity prices are higher than the agreed CfD price ensuring the central government’s budget will not be impacted by unfunded pledges.

New legislation will be brought forward to create a new, permanent National Wealth Fund (NWF) that will invest in industries of the future. A total of £7.3bn of additional funding will be allocated through the UK Infrastructure Bank so investments can start being made immediately, focusing on further priority sectors and catalysing private investment. This funding is in addition to existing UKIB funding. Reforms to the British Business Bank are aimed at unlocking billions of pounds of investment in the UK’s world-leading green industries. The NWF is intended to make ‘transformative investments’ across every part of the country, working with local partners including regional mayors.

The government has also set a core target of making the UK the ‘green finance capital of the world’, mandating UK-regulated financial institutions to implement credible transition plans that align with the 1.5°C goal of the Paris Agreement.

It will also reward clean energy developers with a British Jobs Bonus, allocating up to £500m per year from 2026.

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This article appeared in the Nov/Dec 2024 issue of Energy Manager magazine. Subscribe here.

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