GB Energy a year out – when reality bites

Just before the last election, GB Energy (“GBE”) was Labour’s darling. GBE was to be given £8bn and would spearhead decarbonisation as a partnership/investment vehicle, a ‘behind the scenes’ player that would oil (!) the wheels of change. It would fund local authorities and communities to build clean power, and also fund new technologies. However it has not turned out that way.

Steve Wardlaw, September 2025

We are approaching Labour’s conference in Liverpool, and the mood is febrile. Delivery has been an issue in all sectors – but perhaps none so more than in energy (and its overlap in planning).

I came across this old Guardian article this week. How long ago it feels and yet in reality it was little over a year ago.

However it has not turned out that way.

One section from that article sticks out as pertinent:

The sums are small compared with the cost of major offshore wind projects and nuclear power plants. But the Labour party believes that careful investments could reap major benefits. The Guardian understands that although GB Energy’s first steps into the industry are likely to be investments alongside established private sector companies, it has ambitions to finance and run its own projects in time. This may eventually include developing in-house expertise to deliver major energy projects, including nuclear reactors.

Reading this Guardian article makes me sad. There was so much hope that this would be a springboard to creating a national titan that would promote and encourage other national champions in new energy technology.

We have learned one thing since then - slogans, headlines and the same jokes parroted repeatedly, butter no parsnips. Compare the action promised in that Guardian article to GBE’s latest press release, 15 months after Labour came to power. I note pointedly that the GBE doesn’t have much of a website – and so its press release section just links directly to the Department of Energy website, usually accompanied by a pithy quote or two from Ed Miliband.

In this latest press release, Ed notes GBE’s investment of £200m in solar for schools, hospitals and public buildings. Admirable but not a game changer – this is for 200 schools and 200 hospitals. To give some perspective there are over 32,000 schools in the UK. And is this the cutting edge development that GB Energy promised? This could have been done at a local authority level as part of the promised devolution drive.

What about GBE’s other biggest strategic aim - to start making returns and be self-financing by 2030. From that same press release, here is how GBE will work towards that second aim:

“The government has today confirmed the 3 key areas that the company should focus on to meet these objectives:

Investment in and development of nascent and more established technologies and assets required for Clean Power 2030 and beyond
activity in domestic supply chains to build long-term domestic resilience and economic growth
supporting the growth of local and community energy, working alongside government to deliver a Local Power Plan that will help to ensure local people and communities benefit from the clean energy transition”

Wait a minute…

The government has had 15 months in power and a year before that talking about GBE and this is the level of detail we have achieved? The word you may be searching for is risible.

And GBE has been given a goal to produce a strategic plan based on these objectives “within the next 6 months” – ‘strategic’, not ‘detailed’ or ‘operational’. As a lawyer this is making me anxious, as it looks like the government may have nothing to announce in terms of finished, income producing projects this side of an election, giving the opposition an easy target that this time they may even hit.

It is – sadly – all too easy to criticise the Department and GBE, but looking forward is there still a good news story hidden there somewhere?

GBE was always going to be a ‘punt’ politically – but it had cut through and was achievable.

In general, the Government has – rightly – been accused of not being radical enough. GBE has the scope to be in the headlines for the correct reasons up until the next election and beyond. But we need to be honest about two points:

It will not achieve all that was promised before the election. The Energy Secretary has missed that boat.
It can only achieve something with a full-on U-turn that needs to be done soon. In politics everyone will accept an apology if the result is an improvement. The public and opposition will make hay if there’s an apology (“we got it wrong”) without having a successful plan to get it right (“how we can fix it”).

What can be salvaged?

I used the word ‘salvaged’ deliberately. The GB Energy idea still has legs. The public is keen on a national champion and there is scope for it to do something radical – and fast.

Again, from the Guardian piece:

The Guardian understands that GB Energy would focus on the “riskier” areas of the energy industry – such as the nascent market for floating offshore windfarms, green hydrogen and tidal power – which could help to spur Britain’s green energy progress but where profits are less certain.

GBE should be actively seeking out those ‘riskier’ areas and taking stakes in what might be gamechangers. GBE will still have to manage expectations though; some of these may fail, or not produce savings. As an example, see some of the work done in the early days of the ‘dash for gas’ in the UK power sector in the 1990s, where stakeholders took technological risk ie if a novel gas turbine did not run at expected capacity the main shareholder took that hit on its own income, so encouraging banks and third parties with a stable return. GBE and the Government should do this, crowding in third party funding with the promise that GBE/Government takes tech risk.

There should be an ongoing requirement for new projects to take a GBE ‘golden share’. This would be an evolution of the golden shares that the UK Government took in newly-privatised utilities. Instead of giving veto and control rights, it gives GBE a small (5%) in profits from a project, in exchange for GBE and the Government offering a package of advantages (see above re taking tech risk, but also expedited planning, tax breaks etc).

More directly, some things can be done that may give results before the next general election, and those ideas are already being looked at - See the announcement https://www.gov.uk/government/news/powering-britains-future - which notes the plan to cut Renewables Obligation, Feed in and Capacity Market for certain high power use industries – but only looking at implementation in 2027. This is a common sense move that should be done in the next six months, freeing up industry to lower prices and hire more staff. In addition, cut some of that for consumers as well, which would give a quick win for how consumers feel, and tied in with a reduction in VAT on energy, is a simple headline win, with businesses and voters seeing how the government has helped them.

It's often the small actions that get cut through, rather than mega-projects so beloved of politicians. Continuing on that vein, announce a staged national insulation program for everyone, funded by GBE borrowing against future income streams now. That might need Treasury consent, which needs a more robust leadership, but it is possible.

Conclusion

The Department of Energy is on the wrong track. This has resulted in GBE being a white elephant even before birth. A strong, directed, business-focussed department needs to change that and make GBE a national champion over the medium-term but there are some short term wins as well (good socially as well as politically).

And so, if I was giving the energy speech at conference, based on the above this is what I would announce:

A higher risk profile for part of the GBE investment fund, to encourage novel tech and future UK national champions
A directive to push for a GBE golden stake in new projects, in exchange for Government and GBE incentives
Heavy industry to be freed from green levies
Consumers being freed from some of those green levies, so instant savings
A new national insulation program for homes with immediate savings
All schools and public buildings to be given solar panels, based on a bond issue, financed by the Government over time through the annualised cost savings

But also (not the subject of this piece:

Creation of national champions in Small Modular Reactors, Hydrogen and Carbon Capture
A new planning regime where technology and designs approved in trusted countries (US, France, South Korea) are deemed already approved in this country
(with a magic wand!) A sale of 10% of GBE to Equinor or similar state green champion, in exchange for 5% in a portfolio of existing projects, giving an immediate income stream that could finance other energy savings (insulation in schools and hospitals).

To finish, there is still a way to save GBE, and therefore some of the Government’s reputation, but it involves a U-turn from the Government and Ed Miliband. It will be a failure if this year’s conference speech is more promises and platitudes – above are nine headline grabbing action items.

My major concern? Deals, transactions and dealing with business people are low down on Ed’s priorities when compares with more announcements on net zero. If Ed continues down that track, to paraphrase, therein lies madness – and defeat.

September 2025.

Cover: stock