GB Energy - and what it means for the UK’s Energy Brokers

With the General Election now behind us, and Labour now leading the UK government, more details are coming to light about what Great British Energy (GB Energy) entails, and how it is set to impact the energy market. 

So, in this article, we’re pulling together what we know so far about what GB Energy is and how it is set to operate – and what that (might) means for energy brokers and UK business energy prices… 

Disclaimer: This article is in no way politically motivated. We aim to provide a balanced, unbiased and objective round-up in an attempt to cut through the noise to answer the key questions we’re hearing across our energy supplier and broker networks. 

What we know about Labour’s plans for Great British Energy (so far) 

What is Great British Energy? 

“Switching on Great British Energy” was Mission two on Labour’s 2024 Election manifesto, which outlined leader Keir Starmer’s plans to:  

“create a new publicly owned champion – Great British Energy, to give us real energy independence from foreign dictators. It will be owned by the British people, built by the British people and benefit the British people. It will invest in clean energy across our country- for example by making the UK a world leader in floating offshore wind.” 

As well as being one of the party’s “first steps for change”, Great British Energy (GB Energy) is also central to the party’s long-term Green Prosperity Plan, which also outlines a commitment to “Clean Power by 2030”:

Five key functions of Great British Energy 

As outlined in a press release announcing the partnership between Great British Energy and The Crown Estate to “turbo charge [the country’s] energy independence”, there are five key functions of the newly created company: 

1. Project development – leading projects through development stages to speed up their delivery, whilst capturing more value for the British public  
2. Project investment – investing in energy projects alongside the private sector, helping get them off the ground  
3. Local Power Plan – supporting local energy generation projects through working with local authorities, combined authorities and communities  
4. Supply chains – building supply chains across the UK, boosting energy independence and creating jobs  
5. Great British Nuclear – exploring how Great British Energy and Great British Nuclear will work together, including considering how Great British Nuclear functions will fit with Great British Energy 

Is GB Energy nationalisation?  

Although Chris Saltmarsh, national coordinator for the “Labour for a Green New Deal” campaign group, is stated in the Guardian as saying: “[Labour] should commit to public ownership of the whole energy system, so we can tackle the cost of living crisis and meet the scale of the climate emergency”, Great British Energy is not a nationalisation move. 

Rather, Great British Energy would be set up as a publicly owned company to produce clean, green energy. And crucially, not an energy supplier. 

Indeed, although Labour leader Keir Starmer initially vowed to support “common ownership” of energy, he has since ruled out nationalising the UK’s largest energy firms. 

What does GB Energy mean for suppliers?  

What the impact of GB Energy will be on the UK’s existing energy suppliers remains unclear.  

A major problem with any new renewable energy project is the need for connection to the National Grid – which takes both time and money. 

Labour’s plans aren’t currently geared towards GB Energy entering the market as a supplier in its own right – making this aspect particularly uncertain at present.  

However, it seems most likely that once the infrastructure was in place, GB Energy would co-exist alongside existing energy suppliers. 

How much will GB Energy cost? Where is the funding coming from? 

Pre-Election, it was unclear how GB Energy would be funded, and it remains one of the main aspects of the plan currently under scrutiny. 

Although the original plans saw the plans’ capital reliant on borrowing, Labour has since stated that it would be “funded through a windfall tax on the big oil and gas companies”. 

However, the first steps towards financing the plans appear to have come through partnership with the Crown Estate, a move which has the potential to leverage up to £60billion of private investment in the UK’s drive for energy independence. 

This partnership will lead to up to 20-30GW of new offshore wind developments by 2030, powering almost 20 million homes, and involve additional early development work for offshore wind projects to reduce risk for developers and attract private sector investment (gov.uk). 

What does GB Energy mean for future energy policy? 

Energy think tank, Common Wealth, previously outlined the need for a new public green energy company as a vehicle for the transformation of the UK’s electricity as part of the transition to a net-zero future in a 2024 report.

This has been echoed by the new Energy Security and Net Zero Secretary Ed Miliband, who has stated: 

“Great British 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 Great British Energy will be essential in this mission.” 

Likewise, having scrapped the ban on onshore wind and unblocking the production of cheap solar energy almost immediately, it is clear that the new government is focused on delivering its mission to make Britain a “clean energy superpower”. 

Ahead of the introduction of the GB Energy Bill to parliament, the Prime Minister outlined his intentions for Scotland to lead the clean energy revolution in the UK “fuelled by the skills, knowledge, and talented workforce the energy sector here contains”. 

What’s the reaction to GB Energy (so far)? 

Pre-election, the reaction to Labour’s GB Energy plan was mixed.  Although the idea was generally welcomed, it came with a fair dose of scepticism, not least regarding its financial feasibility. 

The Green Party called the £8bn of funding “a drop in the ocean”. And as POLITICO reported in May, although Octopus Energy’s Greg Jackon backed the plans and identifies their value in “driving innovation and investment where the private sector can’t on its own”, others such as RSE’s Tom Glover “are not really clear what its first priorities are and where its focus will be”. 

The Conservatives, on the other hand, have called the plans “nothing but a gimmick”. 

What GB Energy is likely to mean for energy brokers

A new report by Nesta and Baringa released on 25th July into the role of the state in the GB energy market has suggested that the “Great British Energy initiative could reduce consumer costs by £35 billion by 2050”. 

But in the near term, the creation of GB Energy is probably not going to have much of an impact on energy brokers – or their customers for that matter. 

Infact, the man in charge of the GB Energy project – Ed Miliband – has himself warned that “[lower energy bills are] not going to happen overnight” during an interview on BBC Breakfast, and that only once renewable energy projects “start coming online we’ll start to see the effect on bills. We are going as fast as we can.”   

Although the government believes it can cut the time it takes to get windfarms producing power by half – that still means it’s likely to be 2030 at the earliest before we start seeing any benefit (as it typically takes between 10 and 15 years to build offshore windfarms). 

Let’s not forget thought, that the cost of energy production is only one piece of the total cost of supplying energy – and the price that customers have to pay for their energy.  

For now, the immediate impact is most likely to see the continuation of growing interest in energy sources and investments (renewables in particular) – and carbon offsetting schemes as businesses look to deliver on their ESG commitments. 

The (slow) path to Net Zero

In principle, we think the introduction of a new energy provider – and specifically one focused on green/renewable energy – can only be a good thing for the UK energy sector (and in turn, energy brokers and UK businesses).

Although it would not (initially at least) mean that there was a new energy supplier on the market, the introduction of GB Energy should help, overtime, to ease some of the challenges of an over-reliance on overseas energy providers that have been so evident over the past few years.

Everyone will have their own preferences and opinions on what the best route towards Net Zero is. But cleaner energy sources and more sustainable energy usage are certainly things that we should all be striving towards.

Got other questions about GB Energy that you’d like answering? Let us know.