Ed Miliband’s “pet project” raises more questions than answers (Image: Christopher Furlong/Getty Images)
For the Government, Great British Energy is a bold attempt to reimagine the country's energy landscape - at a cost of ￡8.3 billion to the taxpayer over the next five years.
But failure to deliver risks adding to the growing list of broken promises that Labour has accumulated since coming to power.
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The publicly owned energy company will own, manage and operate clean power projects, such as wind farms.
It will be headquartered in Scotland and paid for by a windfall tax on oil and gas giants.
Critics say it lacks clarity on key details like job creation, investment locations and how it will ultimately impact household energy bills - and by how much.
Before the election, Keir Starmer said that his green energy policies would “help families save up to ￡300 off their energy bills”. The claimed savings would kick in from 2030.
But this number was missing from the official announcement of the GB Energy plans on 25 July - and from Labour’s manifesto.
Shadow Secretary for Energy Security and Net Zero Claire Coutinho, who refers to GB Energy as her Government counterpart’s “pet project”, said: “The Prime Minister, the Chancellor, and over 50 Labour MPs promised bill savings of ￡300 a year by 2030.
“However, Ed’s handpicked Chair of GB Energy has already admitted that cutting bills 'is not the scope of Great British Energy'.
“And just last week, when we Conservatives tabled amendments to hold Labour accountable to the promises they made the British public, that GB Energy would cut energy bills by ￡300 and create 650,000 jobs, Ed Miliband ordered Labours MPs to vote against their own election pledges."
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Last month GB Energy chair Juergen Maier clarified that bill reductions are not within the current scope for the publicly owned company.
When asked by the SNP’s Stephen Flynn when he expected GB Energy to bring down bills, the boss said: “Every megawatt and gigawatt of renewable energy that we put on the grid will help to bring bills and prices down. The exact mechanism by which that happens is, of course, a matter of policy—how you decide to bring those bills to the consumer. That is not the scope of Great British Energy; it is not the scope of the Bill, either.”
Energy planners this week said Labour's 2030 electricity net zero target is "achievable" but a "huge challenge".
But Nigel Farage has predicted that Mr Miliband’s drive to decarbonise electricity production will cause Labour more electoral damage than the numbers crossing the Channel.
The Reform leader said: “Our electricity bills are already, for our manufacturers, the most expensive in the world.
“I completely understand there are a majority of the country who are worried about the environment. A vast majority of the under forties really think global warming is a dreadful problem, but what Miliband is trying to do, it can't be done, and it's doing too much damage.
“Looking at the strike prices that have been done for the new offshore and onshore wind projects, I think electricity prices will be a lot higher in a few years.
“Ed Miliband’s ambitions are not even net – a zero carbon electricity system.
“I think that this policy is going to do Labour more damage even than the numbers crossing the English channel. That promise of cutting bills by ￡300 when probably they are going to go up a lot is going to cause huge, huge harm.
“Why are the government putting no new reinvestment into gas plants? That is the question that Miliband needs to answer.”
Chancellor Rachel Reeves's Budget gave Britain’s new state-owned energy company just ￡100million in funding for renewables projects in the first two years of this parliament, despite the government’s pledge to invest ￡8 billion of taxpayer cash by mid-2029.
This was alongside ￡25million to establish the firm which the Government wants to use to tackle the climate crisis.
But Mr Miliband has conceded it would “take time” for GB Energy, which hopes to attract private investment into technologies, to start making money.
Experts in the field recognise the potential of the company to strengthen Britain’s renewable energy sector but some argue that the public’s expectations may be misaligned with what GB Energy can actually deliver.
Jess Ralston, head of energy at the Energy and Climate Intelligence Unit, said: “I think it’s fair to say there’s been some confusion so far. The industry now understand what GB Energy is but I think the public are still perhaps under the impression that it’s going to be an energy company like in the sense of EDF or Eon, where we would get the energy from the retailer.
“There’s probably a little bit of work to do around clearing up that communication to the public about what it’s actually going to be because if you carry on with the public thinking it’s going to be one thing and then it doesn’t do that, they’re going to feel like it hasn’t lived up to their expectations even though that was never actually what it was meant to do."
She added: “GB Energy has been really good for sending clear signals to the energy industry.
“I think that makes it really attractive for international companies when they’re considering where they’re putting their investment. It’s been really strong narratively.
“It’s been quite positive for the more innovative technologies. It’s becoming clearer that GB Energy is going to put some money into things like tidal energy and floating offshore wind."
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The location of GB Energy’s investments is another factor yet to be defined. The Government has already confirmed a partnership with The Crown Estate which owns the seabed around Britain.
Ms Ralston added: “I’m not aware of any detail that’s been set out about what they’re going to invest in and where yet.
“But it is certainly something that would be beneficial for them to say because that allows the industry to align their investment with that.”
Unite, one of the UK’s largest trade unions, expressed cautious support for the policy but raised concerns about the tangible benefits for British taxpayers and workers.
GB Energy's Aberdeen headquarters hopes to create hundreds of jobs and may even reach more than 1,000, its chairman revealed.
This is part of Labour's plans for GB Energy to generate around 650,000 jobs across Britain by 2030.
The SNP and Conservatives have claimed that up to 100,000 jobs could be at threat from Labour policy on oil and gas licences.
A Unite spokesman said: "Unite welcomes the concept of GB energy.
"However, the scope of what it means for job growth remains unclear. We need a jobs growth plan and clear numbers of jobs that will be delivered from the investment.
"It also has to work for the benefits of the British taxpayer as well as private business; the breakdown of that has yet to be finalised."
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A DESNZ spokeswoman said: “Great British Energy will help replace Britain’s dependency on volatile fossil fuel markets with clean, homegrown power controlled in Britain.
“Backed by ￡8.3 billion, it is at the heart of our mission to make Britain a clean energy superpower, boost our energy security and protect billpayers against future price shocks for good.
“Our initial investment will see Great British Energy begin investing in projects in 2025, kickstarting our work in bringing thousands of jobs across the country.”