Great British Energy will be an energy production company, the UK Government has said.
There had been some confusion during the election campaign when Sir Keir Starmer told BBC Scotland the state-owned firm would “be an investment vehicle, so not an energy company.”
However, the background briefing published by No 10 to accompany the King’s Speech commits the government to creating a “publicly-owned energy production company which will own, manage and operate clean power projects up and down the country.”
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Great British Energy - which will have its headquarters in Scotland - is one of the key drivers of Labour’s clean energy mission, to effectively “decarbonise” the UK’s electricity production by 2030.
The paper admits removing fossil fuels from the power system is highly ambitious and will require at least a doubling of current onshore wind capacity and a three to fourfold increase in current offshore wind and solar capacity.
Ministers will invest £8.3 million of “new money” to help with the upfront costs and “take a stake for the British people in projects and supply chains which accelerate technologies of the future.”
The company will “facilitate, encourage and participate in the production, distribution, storage and supply of clean energy” as well as “measures for furthering the transition to clean energy and improving energy efficiency.”
The government will also bring forward “additional electricity market reforms” which “could help mitigate existing market failures, and therefore increase the speed and reduce the cost of deploying renewable generation capacity.”
One of the other Bills in the King’s speech is the Planning and Infrastructure Bill, which mostly applies to England and Wales, but will have some measures which will apply in Scotland.
It aims to make it easier for the UK Government to get infrastructure projects approved - the pylons, cables and substations needed to transmit electricity - even when there is strong local opposition.
The document does not spell out where exactly GB Energy will be based or how that decision will be made. Businesses in both Aberdeen and Inverness have made bids for the HQ.
An advertising van driving hired out by Aberdeen and Grampian Chamber of Commerce drove around Westminster on the morning of the King’s Speech with the line “It’s coming home, locate Great British Energy in Aberdeen.”
Russell Borthwick, chief executive at the Chamber, said: “This is welcome further detail around the role which the UK Government sees Great British Energy playing in delivering the energy transition.
“The scale of the ambition set out today is hugely exciting, and the intention to develop, operate and own assets alongside the private sector is going to help unlock the investment we need to become a global clean energy superpower.
“Encouragingly, the Bill also refers to supporting the further reduction of emissions from our oil and gas sector, rather than seeking to accelerate its decline.
"This is important but must now be matched with a fiscal regime which supports continuing investment and production from the North Sea for as long as we need it.”
He added: “To achieve the ambition set-out today, this new state-owned company must be co-created with the energy sector– and that industry is largely based here in the North-east of Scotland.
“If we can only bring one thing home this summer, let it be Great British Energy to Aberdeen.”
Offshore Energy UK Chief Executive David Whitehouse called on ministers to work with the sector.
“The proposals to set up GB Energy, a National Wealth Fund, improvements to planning, and a Budget Responsibility Bill are all important developments for the UK economy and our sector’s people," he said.
“Their design and funding will require close consultation with industry which we look forward to contributing to.
“It is significant that the independent Office for Budgetary Responsibility will play a major role in projecting and assessing the economic impact of these policies. This same scrutiny must be applied to the impact of any tax and policy changes on our own sector so jobs, energy security and economic value are protected.
“By working in partnership with the sector, the new government can create the conditions to unlock investment, support our supply chain companies, underpin jobs and grow the economy. The best path to this growth is backing our companies and people here in the UK.”
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