Back in July 2024, the newly installed Labour government announced GB Energy. With a country fed up with the privatisation of key service areas, such as energy and transport, the announcement of a publicly-owned company delivering clean, green energy to the people was met with plenty of excitement and a fair helping of intrigue.
Since then, the excitement has rather dwindled and the intrigue (read, confusion) has stepped up.
What is GB Energy all about? Will it be a proper energy company? Will they help lower our rather extortionate energy bills? Will they take a slice of the pie away from the profiteering energy companies making record profits at our expense?
So many questions. Here’s what I found out.
What is GB Energy?
The Labour Party introduced Great British Energy, also known as GB Energy or GBE, as a publicly owned energy generation company. Its purpose is to drive investment in clean, home-grown renewable energy technologies, such as onshore wind, solar and hydropower, and to reduce the UK’s reliance on imported fossil fuels. The aim is to make Great Britain a ‘clean energy superpower’ by 2030.
GB Energy won’t be supplying energy directly to homes. Instead, it will focus on generating clean energy through large-scale renewable energy projects across the UK. The idea is that GBE will work in partnership with private-sector companies, industry, trade unions and local authorities to bring these projects forward.
With headquarters in Aberdeen (the country’s oil and gas centre) the goal is to shift focus towards a greener future whilst maintaining ties to existing energy expertise. The efforts behind GB Energy are being spearheaded by Ed Miliband, the Secretary of State for Energy Security and Net Zero.
The reality of how this company will operate and its direct impact on household bills remains a little murky.
How will GB Energy work?
Whilst GB Energy won’t supply electricity directly to homes, it will play a crucial role in speeding up the transition to renewable energy. The government has outlined five key functions for the company:
- Project development – To lead renewable energy projects from the planning stages through to delivery.
- Project investment – To invest in energy projects alongside private-sector players to get them off the ground and operational, particularly where significant capital is required.
- Local power plan – To support local energy generation through collaboration with local authorities, communities and co-operatives.
- Supply chains – To build strong supply chains within the UK, creating jobs and boosting energy independence.
- Great British Nuclear – To explore how nuclear can work with renewables to contribute to the UK’s energy mix.
GB Energy has set a high target of being able to generate 8GW of renewable power by 2030. This is a significant amount of energy, enough to power at least 7 million homes.
However, with the ambition comes a heavy reliance on private investment. Around £60 billion will be required to fund the renewable energy projects necessary to meet the UK’s decarbonisation goals.
The role of the Crown Estate
GB Energy will also work closely with the Crown Estate, which manages large portions of UK land and seabed. This partnership is expected to accelerate offshore wind projects in particular.
The goal is to unlock between 20-30GW of new offshore wind capacity by 2030, enough to power around 20 million homes.
The Crown Estate’s experience in developing offshore wind, combined with its access to land and seabed, makes it a key partner. It could also help attract billions in private investment.
This all sounds great, and if it pulls off, could be significant for the UK’s green future. But what about our bills?
Will GB Energy help lower your bills?
We care about a renewables-based future away from fossil fuels and creating a greener home, of course we do, but the vast majority of the population also want to know how this will impact their monthly energy bills. After all, the whole premise of GB Energy is to gain energy independence as a country and “cut bills for good”.
In fact, the incoming Labour government did say that GBE will Lower energy bills for every household by an average of £300 a year. In the official documentation, this figure has been absent.
So, where does that leave us?
In the short term, GB Energy is unlikely to lower your bills. GB Energy’s primary focus is on investment and development, rather than direct energy supply. As a result, it won’t immediately affect the price you pay for electricity.
Ed Miliband has been clear that whilst the long-term aim is to cut bills, GB Energy is a first step in overhauling the UK’s energy sector. Any significant impact on household bills could take years to materialise.
However, the government has stressed that building out renewable infrastructure will eventually lower energy costs. This is because renewable energy has a much lower running costs than fossil fuel-based energy once the infrastructure is in place.
Miliband has expressed that “in an unstable world, the only way to guarantee our energy security and protect billpayers permanently is to speed up the transition away from fossil fuels.”
This should, in theory, help to bring down energy bills. However, by how much and when is uncertain as the price of renewable energy is influenced by several factors, including the cost of development, subsidies, and the wholesale price of electricity.
The verdict on GB Energy (so far)
Whilst the promise of lower bills is part of the long-term vision, it’s unlikely that households will see significant reductions in their energy costs for several years. The focus for now is on building the infrastructure required for a clean energy future. I think this is really important for the environment and energy security.
It would be amazing to have lower bills immediately, but scaling up the much-needed green infrastructure is a necessity. Once this happens, UK-sourced renewable energy will become more prominent and cost-effective. This is going to take time. Yes we want everything now, but in truth things do take time.
I think it’s a positive that the government is moving this way and avoiding the purely short sighted politics that we’re used to.
As a public-owned energy company though, the public will expect lower bills. The government will have to deliver on this.
One way GB Energy could have a more immediate impact on bills is by directly supplying renewable energy from these projects to customers. This would cut out the middlemen, allowing energy to be sold at a potentially lower cost.
For now though, energy-conscious consumers should look to suppliers like Octopus Energy or Ecotricity to make sure their energy comes from greener sources.
I think GB Energy has huge potential. Whilst we wait to see how GB Energy unfolds, one thing is clear: a sustainable, energy-independent future is the right direction.
