The government must fully commit to the £8.3bn funding promised for GB Energy or risk failing to deliver on its promise of lower energy bills, a leading think tank has warned.
The Institute for Public Policy Research (IPPR) found that the publicly owned energy company, set up to boost renewable energy and reduce household costs, will struggle to meet its targets if funding is reduced. The aim is for GB Energy to provide 5% of the UK’s electricity needs by the 2030s, but this will only be possible with full investment.
Challenges in Meeting Energy Targets
The IPPR’s analysis highlights that for GB Energy to have a significant impact, it must amass a renewable energy portfolio more than double the size of the world’s largest offshore wind farm. This makes achieving its targets before 2030 unlikely, which could be a setback for the government’s ambition to cut annual energy bills by £300.
However, the think tank suggests that GB Energy could still provide benefits by developing projects for local communities or by offering direct energy supply contracts to specific groups.
Calls for Continued Investment
The warning comes after reports that the Treasury may reduce the £8.3bn allocated for GB Energy in its upcoming spending review. Simone Gasperin, co-author of the IPPR report, urged the government to maintain its original investment plan.
“To succeed, GB Energy must focus on direct investment in fully owned clean energy projects that deliver real benefits to both industrial and domestic consumers. Cutting funding could weaken its impact before it even gets started,” Gasperin said.
GB Energy, which held its first board meeting in Aberdeen this week, is chaired by energy expert Juergen Maier. The company has already begun engaging with industry partners to explore investment opportunities.
Uncertain Future for Lower Energy Bills
Labour has maintained that GB Energy is central to its pledge to reduce household energy bills by £300 a year by 2030. However, industry experts, including trade body Energy UK, have warned that while the plan could result in lower bills in the future, significant savings are unlikely to be seen by 2030.
A government spokesperson reaffirmed their commitment, stating: “Backed by £8.3bn, Great British Energy will own, manage, and operate new projects, helping the UK move away from volatile fossil fuel markets towards clean, homegrown power.”
How This Affects You
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