King’s Speech: GB Energy 'will help secure UK energy independence’

The UK government said, in the King’s Speech announcing its legislative programme, that a new publicly owned energy company, GB Energy, will “own, manage and operate clean power projects” across the UK.

Gareth Phillips, renewable energy expert at Pinsent Masons, said: “From an energy perspective, there is much in the King’s speech to get excited about. The bold and proactive approach of the new government seen in the last week or so is a relief for the sector.”

Labour first announced plans for GB Energy at its 2022 party conference, with an initial commitment to have it set up within a year of taking office. It forms the main plank of Labour’s mission to “make Britain a clean energy superpower”.

GB Energy, established by the GB Energy Bill, will be owned by the state with aims of reducing energy bills, creating new jobs and reducing emissions. The Bill will apply UK-wide. Scotland is set to be the home of the clean energy mission with GB Energy headquartered there.

GB Energy will have a capitalisation of £8.3 billion of new money during this parliament. The company will develop assets in partnership with the private sector, with the government expecting significant private sector investment to be required.

The government has also set out plans to facilitate, encourage and participate in the production, distribution and supply of clean energy through the Bill and introduction of GB Energy. This will help to reduce greenhouse gas emissions from fossil fuel production as well as movement towards improving energy efficiency across the UK.

The government is aiming to reduce the UK’s dependence on imported oil and gas through the decarbonisation of the power system, in turn increasing energy security. It is hoped that this will lead to a reduction in energy bills after a spike in gas prices following Russia’s invasion of Ukraine. Bills this summer are £400 more on average than they were before the crisis in 2021.

The current cost of electricity mirrors the cost of gas due to gas generation being responsible for the marginal wholesale price. Decarbonising the system will help break this link.

The GB Energy Bill will also see the ban on onshore windfarms scrapped. The government recently confirmed that two planning policy tests that served as a barrier to onshore wind development in England, applicable since 2015, will no longer apply. It comes amid plans to scale up renewable energy generation across the UK, including aims of doubling onshore wind capacity by 2030.

Further planning reforms noted in the King’s speech, relating to the new Planning and Infrastructure Bill, will support the environment in line with infrastructure development. This includes upgrading the national grid and boosting renewable energy.

Phillips said: “The resurrection of onshore wind in England and Wales, prompt determination of 1.3GW of solar consent applications, promise of reform to speed up the deployment of renewable energy infrastructure, and a new government agency in the form of GB Energy to facilitate this, is refreshing and welcome.”