UK outlines plans for state-run energy firm, with engineer picked to run it

THE UK government has unveiled plans for its state energy firm Great British Energy, putting engineer Juergen Maier at the helm, as it pushes to invest in, own and run clean energy projects across the country.

Backed with £8.3bn (US$10.7bn) of public money, GB Energy will be central to meeting the government’s target of decarbonising the electricity system by 2030. Today, it announced a partnership has been formed with the Crown Estate, the firm managing the monarchy’s land holdings including stretches of the seabed around the country. It estimates that the partnership could lease out enough seabed by 2030 for an extra 20-30 GW of offshore wind, enough to power almost 20m homes.

State influence

The government will use GB Energy to play a more active role in shaping the energy sector. Beyond stumping up funding, it will undertake early development work for offshore wind projects in a bid to reduce risks for investors, attract private investment and speed up construction. Profits from its investments could then be reinvested into new energy projects.

Ed Miliband, the secretary of state for energy security and net zero, said: "Great British Energy will own, manage and operate clean power projects. It will be a company that will generate energy in its own right, working in partnership with the private sector for the good of the country."

He added that he wants GB Energy to help reindustrialise Britain and make more of skilled workers who have experience in offshore industries and cutting-edge technologies. Its goals include bolstering UK manufacturing and supply chains and supporting local authorities and communities to roll out small and medium-scale renewable energy projects, using established technologies, to develop up to 8 GW of clean energy.

Overhanging these ambitions are concerns whether the government has or can attract people with the necessary skills and experience to effectively manage a state-run energy company.

Engineer at the helm

News that it has selected Juergen Maier, former CEO of Siemens UK, to chair GB Energy has been welcomed by the Royal Academy of Engineering.

Its CEO Hayaatun Sillem told TCE: "This is an inspired appointment. Juergen has an outstanding track record as an engineering and business leader. This job requires a strategic overview of the entire clean power project from energy creation to connection and storage. Juergen will be well placed to bring the systems thinking that will be so vital to achieving the targets for clean power in the next decade."

While GB Energy will initially focus on wind it has a remit to push a wider range of technologies.

Maier said: "Great British Energy can help clear a path for those emerging technologies which could revolutionise the entire sector, for example this may include technologies such as floating offshore wind, tidal, hydrogen generation and storage, and carbon capture."

He added: "I’m excited to lead this company and work with the private sector and communities to rapidly expand skilled jobs and investment across the country."

The government introduced a bill into parliament today to create GB Energy. It will be an operationally independent company, led by its own CEO and overseen by a board of industry experts with input from unions. It will be headquartered in Scotland, with the exact location and key appointments expected in the coming months.

During a debate in parliament earlier this week, Jeremy Hunt, the shadow chancellor warned the government should be wary of publicly owned utilities, saying he is concerned that they would empower unions to increase pay and demand bail-outs, increasing prices for taxpayers.

Tom Baxter, a chemical engineering consultant and founder of the Hydrogen Science Coalition, said: "As someone who once worked for the state-owned British National Oil Corporation, this is fantastic news. Energy is key to a nation’s prosperity and a public hand on the tiller can only benefit GB’s taxpayers."

Enough funding and the right goals?

There are concerns that £8.3bn will not be enough to bring about the scale of change the government is pushing for. Though the government has estimated that it’s funding could catalyse private investment worth £30-60bn.

The Carbon Capture and Storage Association (CCSA) welcomed GB Energy’s partnership with the Crown Estate but called for clarity on the industrial CCS clusters that previous administrations have funded. In 2021, the government selected HyNet along with the East Coast cluster as priority Track-1 CCS projects to receive £1bn of taxpayer support. Acorn cluster in northeast Scotland and Viking in the Humber were later selected as track-2 clusters.

CCSA said: "With final investment decisions due to be taken in September for Track-1 clusters, and further clarity required on project selection and next steps for Track-1 Expansion and Track-2 clusters, any additional investment from GB Energy should be used to accelerate infrastructure investment beyond current plans."

Craig Jones, vice president of energy transition at energy equipment firm GE Vernova, said GB Energy will be an important partner as government and the private sector work together to decarbonise energy.

"To be a success, GB Energy needs to focus on a few key areas. It could make a real impact in cutting the time it takes to develop projects; speeding up delivery by being a co-investor in areas where the country needs to go faster, such as on offshore wind; and supporting close-to-market technologies like small modular nuclear reactors and carbon capture and storage," Jones said.

Energy storage and nuclear

David Simmonds, an IChemE Fellow and former energy industry senior manager, said GB Energy must do more to focus on energy storage.   

"We know renewables suffer intermittency and we will struggle to meet high winter demand once we install more heat pumps. Great British Energy should focus its efforts on providing long term sustainable energy storage solutions. I recommend our community look at the Royal Society’s report into energy storage, and look to supporting policy makers to deliver a hybrid energy system. Primary energy should be delivered through private enterprise, with energy balancing supported by some state investment to ensure reliable 24/7 supplies to consumers at lowest cost."

Jess Ralston, head of energy at the think tank Energy & Climate Intelligence Unit (ECIU), said: "GB Energy certainly has the potential to deliver on making us more energy independent and moves to help with community engagement and planning, which has been holding back growth, are sure to be welcome. Get this right, and alongside electric heat pumps that can replace gas boilers running off British renewable power instead, the UK will be looking much more energy secure, detaching itself from the volatile gas markets that have driven energy bills skywards over the past few years."

What remains to be seen is how Great British Energy will work with Great British Nuclear which was set up last year by the previous government to deliver new nuclear projects. The new Labour government said it will explore how the two work together and is “determined to advance the work of Great British Nuclear.”

This week, the National Engineering Policy Centre, led by the Royal Academy of Engineering, published a report outlining six big steps the government would need to take to achieve its goal of decarbonising the grid by 2030. These include installing a chief engineer to oversee the programme transforming the system to be digital-first, and dealing with the delays in planning, consent and connections that are hampering the roll out of clean energy projects.