Climate change danger justifies biggest ever taxpayer investment in renewables, says Government
The current danger from climate change justifies the biggest taxpayer investment in wind and solar farms in British history, the Government will say on Thursday.
Sir Keir Starmer is to unveil the first investment by the £8.3 billion taxpayer-funded Great British Energy, which will back renewable energy projects to help meet the Government’s net zero goals.
The Prime Minister will say the Government is “rolling up our sleeves to deliver for Britain” as he announces a partnership with the Crown Estate to help develop the seabed for offshore wind power.
Ed Miliband, the Energy Secretary, said the £8.3 billion investment in GB Energy was vital to meet the “huge challenges” the country faced, including the climate crisis, which was “not a future threat but a present reality”.
“In an unstable world, the only way to guarantee our energy security and protect billpayers permanently is to speed up the transition away from fossil fuels and towards home-grown clean energy,” he said.
“That is why making Britain a clean energy superpower by 2030 is one of the Prime Minister’s five missions, with the biggest investment in home-grown clean energy in British history.”
A Great British Energy Bill will be introduced in Parliament on Thursday to formally establish the company, which will have its headquarters in Scotland.
The company is expected to take a stake in renewables energy projects alongside the private sector.
It will also provide funding to local authorities to set up small renewables projects, and back emerging technologies such as tidal power.
It is expected to play a limited role in helping toward the Government’s target for a green electricity grid by 2030, although officials believe it will help improve certainty around investments.
In its first major project, GB Energy will provide spatial planning, surveying and grid design assistance to the Crown Estate to help speed up the development of offshore wind projects.
The Government said the partnership would lead to up to 20-30GW of new offshore wind developments reaching seabed lease stage by 2030 – enough power for the equivalent of almost 20 million homes.
The 2030 target for offshore wind development was already announced by the Crown Estate last year, leading to questions over how much additional value the taxpayer investment via GB Energy would provide.
Ministers and the Crown Estate believe backing from GB Energy will make it more likely that the original target date will be reached.
It is not yet clear how much of the £8.3 billion will be divided between projects such as the Crown Estate deal and other types of investment.
It is also yet to be decided what level of stake GB Energy will take in renewables projects, and therefore what return it can expect on investments.
Energy experts have also raised questions over how the Government will ensure the company provides value for money for taxpayers.
‘Lack of clarity’ over GB Energy
Josh Buckland, a former civil servant in the energy department and senior fellow at Policy Exchange, said there was a lack of clarity about how GB Energy will operate.
“This includes how any public ownership will be designed in such a way not to distort the market for private investment,” he said.
“Until that is understood, it’s hard to assess how much value GB Energy will deliver in practice to the taxpayer or billpayer.”
A report from charity Nesta suggested that GB Energy could save households £350 billion by 2050 by speeding up the delivery of renewables.
“Renewables investment today is held back by red tape. From buying seabed leases and conducting environmental surveys, to waiting for planning and consenting decisions and for grid connections, developers have been made to take on big risks outside their control,” said Ravi Gurumurthy, chief executive of Nesta and the report co-author.
“By taking on these tasks, Great British Energy will speed up delivery and reduce the risks faced by the private sector.”
Adam Bell, from consultancy Stonehaven, said: “The success of GBE will depend on how well it is able to leverage its unique position in the market, to build capacity for UK low-carbon supply chains and recycle its initial taxpayers’ investment across multiple projects.
“If it can do this – which is not a given – it will put itself in a place to be the UK’s answer to EDF.”