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View from the Street: GB Energy’s style is confirmed, but what of the substance?

Tom Gillingham

Partner

In the political equivalent of the battle royale videogame format, many of Labour’s policies have been knocked out by an encroaching circle of financial constraints, one by one, month after month.

Some peaked too early. Some were strong behind closed doors but failed the audience test. Others were just too expensive. Most are forgotten by the voting public.

One that endures is GB Energy and its much trailed but yet-to-be located Scottish HQ. It survived the wider cull of green commitments and the still smouldering bonfire of some of the party’s more traditionally left-leaning positions.

Today’s announcement of GB Energy’s logo and website by Keir Starmer and Anas Sarwar does set out a bit more about this entity, but questions, many of which we hear directly from clients, remain.

GB Energy will be directed from Westminster, but the Scottish Government holds the key planning and consenting levers that will impact its activities in Scotland. To add to the complexity of successful delivery it’s not yet entirely clear which specific shovel-ready projects will be in the crosshairs of the new venture, which has cutting bills quickly at its heart

There is also the chance that GB Energy could simply become the latest organisation to encounter the same painful complexity that other projects in Scotland have come up against, and a lingering concern it could duplicate the work of existing funders or advocacy bodies.

Staffing a whole new company will present a challenge in a constrained skills environment too. It will need a leader who is available, can bring people together and who understands commercial partnerships. I wonder if anyone in Labour would be bold enough to give Andy Street a call?

So, with these still unanswered considerations in mind, what solutions can the industry in Scotland and the wider UK bring to the GB Energy table?

Beyond broad-brush plans to hand out grants to small-scale projects and supporting mature technologies, there are plenty of novel, high UK content technologies that GB Energy could embrace to make a clear difference to our energy landscape. With a need to deliver quick results with a different profile, tidal stream, smaller scale domestic hydrogen projects – or even supporting the circular economy potential of blade recycling – could be differential and deliverable focuses within the coming parliamentary term.

Selecting less heralded projects would show government willingness to take on new risk, underpinning wider investment cases. There is a feeling industry has taken the majority of the calculated risks to-date in the energy transition and now there is space for this to be matched via GB Energy. It’s a fine line to tread, though, to avoid displacing existing investment, or the work of entities like the UK Infrastructure Bank or the Scottish National Investment Bank.

For this reason, there should be confirmation about how GB Energy intends to interact with well-established enterprise agencies and energy industry bodies. If a clear route for industry engagement is one must-have for GB Energy, another should be a ‘red phone’ equivalent between the UK and Scottish governments.

Speaking at the Prosper Forum yesterday, Anas Sarwar talked about the need for more co-operation between Scotland and the UK, and nowhere is this more important than the Holyrood and Westminster fankle of responsibility for the green transition and associated community benefit guidelines.

Co-operation must – somehow – avoid the culture war traps associated with climate change. Counterintuitively, focusing more on jobs and prosperity, than the environment, may be the most effective route. But this means being frank about what can be achieved in the next parliament by GB Energy in what is a notoriously long-term sector. It also must manage expectations around what can realistically be achieved in terms of bill cuts.

Finally, foreign direct investment is undoubtedly a success story for Scotland, and must continue to be supported, but a focus on domestic players by GB Energy could help salve frustration felt amongst some home-grown companies around the perceived government focus overseas.

After the announcement today, GB Energy has a defined visual identity, but the challenges it faces are not as clearly set. There is an opportunity for Labour to use GB Energy to stand shoulder-to-shoulder with the industry, find the projects that it can accelerate and to confound the doubters. However, the clock is against this initiative and doubts are already swirling. If its fundamental constraints are not acknowledged or thought through now, there may not be enough time in the next parliamentary term for it to prove its worth.