Labour’s ‘Great British Energy’ Plan Explained

The 2024 general election saw several key energy pledges from the victorious Labour Party. Arguably, the most significant was the creation of ‘Great British Energy’, a publicly owned green power company with investment plans of £8.3 billion.

In this short article, we’ll give you a straightforward breakdown of what small business owners need to know about this Government initiative.

How Will Great British Energy Work?

Great British Energy will be publicly owned but managed by an independent board. Although headquartered in Scotland, the company aims to benefit all corners of the UK, supporting local authorities in developing renewable energy initiatives.

GB Energy won't supply electricity directly to households or businesses. Instead, its primary role will be to invest, in collaboration with private companies, in emerging and established energy technologies.

These technologies include:

• Green Hydrogen: Produced from water using electrolysis.

• Floating Wind Farms: Offshore wind turbines on floating platforms.

• Tidal Power: Harnessing natural energy from tidal movements.

• Onshore Wind: Wind farms on solid ground.

• Solar Power: Conversion of sunlight into electricity.

• Nuclear Energy: Using the energy emitted by nuclear reactions to generate electricity.

How Will Small Businesses Benefit?

GB Energy aims to provide multiple benefits, including reducing reliance on imported fossil fuels. The Government estimates that energy bills could drop by an average of £300 annually for households, indirectly benefiting SMEs.

Reduced dependence on foreign energy sources like Russia and the Middle East is an appealing prospect for the Government. It should also benefit businesses by mitigating the impact of volatile global markets on their prosperity.

The Labour Party estimates 650,000 new jobs could be created across the UK, benefitting local economies and providing new opportunities for British SMEs.

What is the Local Power Plan?

The 'Local Power Plan' is an essential component of the GB Energy strategy, promoting local power generation to reduce strain on the national grid. The company will collaborate with local energy projects, aiming to generate up to eight gigawatts (GW) with £3.3 billion in funding over five years. To put that into perspective, a single gigawatt is enough energy to power an average-sized city.

Profits from local projects will be reinvested in the community, potentially through energy bill discounts. An example of this initiative is the Fintry Development Trust in Stirlingshire, where wind farm profits funded £1,000 grants for energy efficiency upgrades.

Where is the Money Coming From?

GB Energy is part of the ‘Green Prosperity Plan’, primarily funded by the increased windfall tax on oil and gas companies. This taxation is expected to raise £1.2 billion over the coming parliamentary term. The Government also aims to finance its plans by borrowing responsibly without excessive risk.

The Government plans to establish the company within a few months once new legislation has been passed by Parliament.

Key Takeaways

For small businesses in the UK, GB Energy represents a significant shift towards sustainable and locally beneficial energy production. This initiative promises to create a more stable environment for businesses and communities by lowering energy costs, increasing job opportunities and enhancing energy security.

Stay informed about Great British Energy's creation, as it could offer your business new opportunities and advantages.

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Sam White