LONDON — Labour swept to power with a big, expensive promise: to create a government-owned energy company, hand it billions to invest in British renewables, and watch it grow, eventually, to rival other state-owned energy giants. Two years on from the foundation of Great British Energy, that isn’t what has happened. Analysis from POLITICO shows billions of pounds from its budget have been redirected to schemes not included in GBE’s initial remit, stripping away some of the cash earmarked for costly, large-scale renewable energy projects like wind and solar.
Those funds are being used instead for very different purposes, like planning new nuclear schemes and reviving Britain’s creaking electricity grid. Set up by then Energy Secretary Ed Miliband, the government backed GBE with £8.3 billion of fresh funding. Its purpose at the time seemed clear.
Yet now experts can’t agree on what, exactly, GBE is for. Miliband’s GBE pitch to the public was ambitious. The company would allow Britain to become a bigger player in its own clean energy market in Labour’s dash to hit green goals, he said.
Referencing huge state-owned companies in Denmark and France, he told Channel 4 News weeks after the election that GBE was “not going to become Ørsted or the generation arm of EDF overnight. But that is the long-term vision.” Soon after GBE passed into law, though, former Chancellor Rachel Reeves reassigned £2.5 billion of its budget to help developers design small-scale nuclear power plants and prep sites where those mini-nukes will eventually go. The government also scaled back its funding for those local, smaller-scale projects, which include getting solar panels onto school and hospital roofs.
The mooted £3 billion for GBE’s Local Power Plan became just £1 billion when more details were announced this February. GBE has set aside another £1 billion to build up clean energy supply chains. And that’s all before Prime Minister Andy Burnham used Labour’s annual conference to pledge another whack of GBE’s budget to a totally new venture: Great British Grid.
In a bid to put his own stamp on Miliband's pet project, Burnham announced that the new unit would sit within GBE, using some of its budget to speed the build out of Britain’s creaking grid network. GB Grid will invest alongside existing grid operators in a bid to cut costs, Energy Secretary Miatta Fahnbulleh said last week, at a time when the grid regularly struggles to handle the levels of power being generated by developers. Energy experts are torn over whether GB Grid, in particular, is a smart pivot for the government — but acknowledge it is not the same thing Miliband promised to deliver.
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