(Bloomberg) -- The Crown Estate of King Charles III will partner with a new state-backed company to accelerate the building of offshore wind farms that are vital to the UK’s energy and climate goals.
Thursday’s announcement marks the first concrete step by the government to use Great British Energy in its quest for a zero-carbon electric grid by 2030. The collaboration with the Crown Estate, owners of the UK’s seabed, means the public sector will get involved in projects earlier and may attract more private funding.
“I don’t just want to be in the race for clean energy; I want us to win the race for clean energy,” Prime Minister Keir Starmer said Thursday in a speech in Runcorn, northwest England. “We’ve got the potential, we’ve got the ports, we’ve got the people, the skills.”
Juergen Maier, a British-Austrian national who led Siemens UK from 2014 to 2019 and is Vice-Chair of the Northern Powerhouse Partnership, has been appointed to chair Great British Energy.
The agreement could leverage as much as £60 billion ($77 billion) of investment into the UK’s renewables business, the government said. Energy security and the need for the state to play a bigger role in guaranteeing that was a major campaign issue for recently-elected Starmer.
Though the company will be free to make its own decisions, the Secretary of State for Energy Security and Net Zero, Ed Miliband, will prepare and lay before Parliament a statement of strategic priorities for the company. He could also give directions to the firm following a similar parliamentary procedure.
“The first test of GB Energy and its partnership with the Crown Estate will be in this year’s CfD auction,” said Sam Hollister, head of energy economics, policy and investment at consultants LCP Delta. “With zero offshore wind procured last year, the industry and the UK’s decarbonization ambitions are playing catch-up.”
LCP Delta estimates that the UK must procure 15 gigawatts of capacity in the next two auctions to reach a 55 gigawatt target. Earlier this year, LCP Delta estimated that the current budget would only lead to 4-6 gigawatts of capacity at the next auction.
Great British Energy is receiving £8.3 billion of taxpayer money to own and operate assets in collaboration with the private sector. By allowing borrowing, the government believes 20-30 gigawatts of new offshore wind seabed leases can be secured by 2030.
--With assistance from Alex Morales.
(Updates with minister’s strategic role in sixth paragraph.)
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