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The first investment for the UK’s new state-owned energy company will be £110mn in grants to fund solar panels and other clean energy production at schools, hospitals and community projects, with no return for the company.
The backing from Great British Energy, based in Aberdeen, will be matched by other UK government funding, amounting to total taxpayer investment of about £200mn for the projects, almost all of which are in England.
Chair Juergen Maier said it was the “first step” in “work with local communities to help them generate their own energy”.
The move comes after the company’s first board meeting, in Aberdeen on Monday, where Maier said it was “engaging with industry on exciting investment opportunities”.
Setting up GB Energy was part of Labour’s pitch to voters in last year’s general election to help cut Britain’s reliance on fossil fuels and reduce electricity bills.
In its manifesto, the party said the company would be: “co-investing in leading technologies; will help support capital-intensive projects; and will deploy local energy production to benefit communities across the country”.
GB Energy’s founding statement added it would provide a “route” to building clean energy assets which would “generate profit that is returned to invest in new projects and for the wider benefit of UK taxpayers, bill payers and communities”.
However, it has been slow to define exactly what role it will play. Technologies such as offshore wind are already well supported by the private sector.
Dan McGrail, the interim chief executive, said on Wednesday it was looking at investing in floating offshore wind, currently riskier and more expensive than the workhorse fixed-bottom technology.
The total £200mn in government and GB Energy spending being announced on Friday includes £80mn for around 200 schools in England and a further £100mn for nearly 200 National Health Service sites in England.
Almost £12mn more will go to local authorities and community energy groups in England for clean energy projects, and £9.3mn to similar schemes in Scotland, Wales and Northern Ireland.
The government said the NHS spends about £1.4bn a year on energy, adding that estimates showed an average NHS site could save “up to £45,000 per year” if it installed solar panels as well as other technology such as batteries.
Trusts in line for funding include the Chesterfield Royal Hospital NHS Foundation Trust, set to receive £6.6mn, and Lewisham and Greenwich NHS Trust, set to receive £2.7mn.
Labour’s manifesto said GB Energy would be funded with £8.3bn across the parliament.
Its funding is coming under pressure ahead of a tight spending review that will conclude this June.
The FT reported earlier this month that ministers are weighing whether they can afford the full amount.
Meanwhile, the remit of the National Wealth Fund, Britain’s state-owned investment vehicle launched last November, has been widened to include advanced manufacturing and other sectors alongside clean energy. Chancellor Rachel Reeves says she wants the NWF to consider dual-use technologies.
So far, GB Energy has been allocated £175mn to the end of the 2025/26 financial year — £125mn at last year’s October budget and a further £50mn as part of today’s announcement. It now has £65mn left for the period.
Ed Miliband, energy secretary, said of today’s funding: “GB Energy’s first major project will be to help our vital public institutions save hundreds of millions on bills to reinvest on the frontline. This is our clean energy superpower mission in action.”
