Ed Miliband's £8bn pet project is sliding into irrelevance

Telegraph

7 days ago

The chairman of Great British Energy appeared exasperated.
Under tough questioning, Juergen Maier was desperately trying to explain the mission of the new taxpayer-owned company he had been hired to oversee.
When would it actually start to bring people's bills down, the interviewer from Sky News asked. And how exactly would it do this?
Maier, the former boss of Siemens UK, could only offer that 'more renewable energy is bringing people's energy bills down. It's a great thing for British people'.
'I know you're asking me for a date,' he added. '[But] Great British Energy has only just been brought into creation.'
'Can you see why people think this is a bit vague?' the journalist responded.
Fast forward four months – almost a year after Labour's election victory – and the question of what Great British Energy (GBE) is for still troubles the energy industry.
'It's what we're all waiting to find out,' says one executive at a top wind farm developer. 'They've got £8bn. But what are they going to actually use it for?'
The quango, which it set to be headquartered in Aberdeen, was promised a dowry of £8.3bn to 'drive forward investment in clean, home-grown energy production' in the Labour manifesto.
Ed Miliband, the Energy Secretary, has since described it as Britain's answer to the European state-owned energy companies such as Orsted (Denmark), EnBW (Germany), Equinor (Norway) and EDF (France) – the likes of which currently own nearly half of the country's offshore wind farms.
'We have a simple proposition: if it is right for the Danes, the French, the Norwegians and the Swedes to own British energy assets, it is right for the British people to do so as well,' he told MPs in September.
Great British Energy.
Owned by the British people. For the British people. pic.twitter.com/913kfCiyja
— Ed Miliband (@Ed_Miliband) May 15, 2025
It's an argument that more than two thirds of the public agrees with, according to polling by More in Common.
'The concept resonates with people,' says Luke Tryl, the group's executive director.
Yet critics say that for all the soaring rhetoric, GBE is sorely lacking a clear purpose. Even the quango's own staff have appeared unsure about what it should be doing, some claim.
One industry source recounts going to a GBE 'engagement' event last month at a French restaurant in central London, hosted by Paul Addison, the head of policy.
'I got the strong impression that they still haven't actually settled on what it should look like,' the source adds.
Another person who attended a roundtable in Scotland described a similar experience. However, a person close to GBE disputed this characterisation.
'What we've been saying to people is, if you're unsure about what we're up to, reach out, because there is a team of us now,' the person adds.
Ahead of the election, senior Labour figures stressed that the taxpayer-funded entity would not 'crowd out' the private sector and instead only focus on where its cash could help to unlock or 'de-risk' investment by others.
This would rule out vast swathes of the conventional energy sector – including investment in solar and wind.
Instead, it would focus on potentially more nascent and expensive technologies such as floating offshore wind farms, carbon capture and storage, hydrogen production and long-duration energy storage schemes – all of which experts say will be phenomenally hard to crack.
Miliband has said GBE will also invest in community energy schemes. But he has also contradicted Labour's other statements at times, suggesting that GBE will indeed get involved in owning wind farms, for example.
'I often cite the fact that the mayor of Munich owns more of our offshore wind than the British state,' he told the New Statesman. 'We want GB Energy to show that public ownership can work.'
The Energy Secretary is expected to set out GBE's strategic objectives formally in a letter in the coming months.
This tension became clear last summer when the Government announced a partnership between GBE and the Crown Estate, which owns and leases seabed for wind farms, and appeared to suggest GBE would take stakes in developments.
Behind the scenes, wind farm owners 'massively kicked off', says one person involved in talks between industry and the Government.
Yet so far, the only projects GBE has committed to are a £180m investment to install solar panels on around 400 schools and hospitals and a £300m pot to invest in factories that will make parts for the country's offshore wind turbines.
It's a far cry from the soaring ambitions previously described by Miliband. And hardly the type of work requiring an entirely new quango.
Slow progress
Dan McGrail, another Siemens veteran who was recently appointed GBE's interim chief executive, has also told trade publication Utility Week that he did not anticipate spending 'significant' sums until next year at the earliest.
This slow progress is partly due to the slow grind of Parliament. A bill to formally establish GBE only became law a few weeks ago, with McGrail admitting last month that it did not even have a bank account yet.
GBE is also still hunting for a permanent office in Aberdeen, where it expects to house up to 200 staff.
Yet eyebrows were raised last week when, after months of speculation, the Treasury appeared to clip the quango's wings by stealth.
About £2.5bn of the organisation's £8.3bn budget was handed to Great British Nuclear (GBN), a separate quango running the Government's mini nuclear reactor programme, documents published for the spending review showed.
GBN has been renamed to 'Great British Energy – Nuclear', allowing ministers to claim that its budget remains unchanged.
But while the organisations will be 'allied', they remain operationally independent – meaning Maier and McGrail have 30pc less money to play with.
'It was a sleight of hand,' one Whitehall insider says.
Much of the rest of GBE's cash has also been allocated via loans and guarantees that will require tight oversight by the Treasury.
'Now the dust has settled on the spending review, it's clear the GBE budget has been slashed by Rachel Reeves with billions diverted into nuclear energy – a far cry from the £28bn green pledge that was once promised by the Labour Party,' says Graham Leadbitter, a Scottish National Party MP.
Meaningful or 'vanity project'?
Still, there remain high hopes for GBE in some quarters.
Andy Willis, founder of battery developer Kobo Energy, says he believes the company can make a meaningful contribution to net zero if it successfully breaks down barriers across the green energy sector.
'The big missing link at the moment in the UK is long-duration energy storage,' he says, which is the technology needed to protect the country against 'dunkelflaute' periods of low wind in the winter.
Willis also suggests GBE could help to ease bottlenecks such as waiting times for power transformers, which currently take two to three years to arrive due to stretched manufacturing capacity in Europe.
He says they could do so by encouraging companies to co-invest in UK factories.
It is understood that GBE's bosses are currently focused on three areas: commercial investments, which will see the company take minority stakes in clean power projects; community energy schemes, likely to involve partnering with cooperatives; and supply chains, for example, helping to develop manufacturing of key parts for wind farms.
The quango is understood to have around 100 potential projects in its pipeline already, most of them potential investments in floating offshore wind schemes. It is hoped that it will generate its own income in the long run, although there is no timescale for achieving break-even.
But Daniel Slater, an analyst at Zeus Capital, says GBE is partly hamstrung by being forced to invest only in renewables.
'Historically, similar companies have been established on traditional energy sources, often using cash flows from oil and gas or power generation to pivot into renewables,' he says.
'GB Energy has to operate with no existing revenues and potentially in markets that are often already subject to government support. It means reaching an independent financial position will be very difficult.
'The option for GB Energy is probably to act as an alternative form of government subsidy programme, while maintaining stakes in projects which could then establish cash flows longer term.'
He believes another area that could be worthy of GBE's attention is geothermal heat, potentially for public buildings such as hospitals and universities.
But Ashley Kelty, an energy analyst at Panmure Liberum, dismisses GBE as a 'vanity project' that risks duplicating work already being done by other publicly-funded investment agencies.
'It's a waste of time and money – little more than a virtue-signalling gesture,' he says, pointing out that the sums involved are tiny.
Its location is, he says, also a mistake. 'Being in Aberdeen is symbolic only. It would be better to be based in London where it is closer to the City and financial institutions. The jobs impact will be negligible.'
For now, Miliband's pet project appears to have survived to fight another day after emerging from the spending review with a remaining budget of almost £6bn.
But as scrutiny of the quango grows, the question of exactly how he will spend that money will only become more urgent.