Great British Energy will receive £125m to establish the new public body and kick-start project development, as announced by Chancellor Rachel Reeves in today’s Autumn Budget.
The UK government has allocated £100m capital funding in 2025/26 for clean energy project development and a further £25m to help set-up the company, headquartered Aberdeen.
Great British Energy is in line to receive a total of £8.3bn from the National Wealth Fund over the next five years.
Today’s Budget also provided £134m to support the delivery of port infrastructure to facilitate floating wind.
£3.9bn has been earmarked in 2025/26 for the first carbon capture and storage clusters in the UK.
The Chancellor confirmed £2bn of funding for 11 projects going through Hydrogen Allocation Round 1.
To help make the UK a clean energy superpower, oil and gas companies will contribute more to support the energy transition. The government is increasing the rate of the Energy Profits Levy (EPL) from 35% to 38%, removing the 29% investment allowance, and extending the levy until 31 March 2030.
To provide certainty and to support a stable energy transition, 100% first-year allowances in the EPL will remain and the government will consult in early 2025 on how the oil and gas tax regime should respond to price shocks once the EPL ends in 2030.
The UK government said the Budget built on steps it has already taken to unblock and drive investment into clean energy technologies. They include reversing a de facto ban on onshore wind in England, approving major solar projects of nearly 2GW, increasing the budget for this year’s CfD Allocation Round 6 and securing £34.8bn private investment around this month’s International Investment Summit.
It also pointed to work being done by the National Energy System Operator and Ofgem to develop a “robust” grid connection process.
In response to the measures contained in the budget,
Dan McGrail, chief executive of RenewableUK, said: “We welcome the Chancellor’s commitment to use the National Wealth Fund to transform ports around the UK into new industrial hubs for offshore wind manufacturing and assembly.
“We know that, with the right grants and incentives from the National Wealth Fund, the UK has the potential to secure hundreds of millions of pounds of investment in offshore wind alone, building the supply chain and creating jobs.
“Given the fierce international competition, the sooner that process starts the better.”
Claire Mack, chief executive of Scottish Renewables, said: “With its Autumn Budget, the UK government has once again recognised that the renewable energy industry will play a vital role in help to grow the UK economy and a sizeable pipeline of projects here in Scotland will be key to this growth plan.
“By setting aside £134m for port investment, we are particularly pleased to see the Budget highlight how important the UK’s ports will be for deploying floating offshore wind at scale, and by committing £125m to GB Energy we are please the UK government is ready to kickstart much needed investment in our clean power projects.”
Vicky Parker, power and utilities leader at PwC UK, said: “This is welcome but reflects a continuation of previously announced policy identified in the hydrogen allocation round one process in 2023.
“Overall, the Budget was light on specific funding announcements for the energy sector. Given the stated clean power ambitions for 2030, a large proportion of that success will be dependent on the role that GB Energy and the National Wealth Fund ultimately play in attracting capital to help mobilise investment.
“It cannot be emphasised enough that the large-scale programmes required to fundamentally change the UK’s energy system are acutely reliant on private capital being adequately incentivised and assured to deploy investment and in parallel, the public sector being able to move at the required pace.”
Chief executive and founder of Low Carbon Roy Bedlow, said: “The main thing that the government had to do today for the renewables sector was to encourage new investment and provide policy certainty that there is an investable pipeline of clean energy projects that will help power the future.
“It is therefore welcome that the fiscal rules have been changed to help free up the billions of pounds needed for spending on green infrastructure, which can help contribute to increased electrification and price stability, reducing the UK’s exposure to fossil fuels.
“We are also pleased to see the government note the importance of accelerating grid connections and building new network infrastructure as ‘central to unblocking private investment’.
“One of the biggest obstacles to the deployment of more renewable power continues to be the issue of grid delays and the need to remove slow moving projects from the connections queue.”