Decoding Labour's Renewable Energy Roadmap

In Labour’s renewable energy roadmap, the most significant piece is the proposed Great British (GB) Energy, Labour’s flagship £8.3 billion public energy company that is to focus on renewable energy technologies and accelerate the commercialization of the sector.
GB Energy will be established using state funds. Rather than directly supplying electricity to households, its primary function will be to collaborate with private sector entities in co-investing in emerging clean energy technologies, and partner with local authorities and energy communities to expand smaller-scale renewable energy projects. Profits will be reinvested in the company.

For established developers, GB Energy presents opportunities for public-private partnerships, and to compete in areas traditionally dominated by the private sector. The government’s targets – quadrupling offshore wind, tripling solar, and doubling onshore wind capacity by 2030 are aggressive, even by global standards. To help, Labour proposes regulatory reforms that include the designation of large wind farms as nationally significant infrastructure projects. This change, reverting to pre-2015 approval mechanisms, may streamline consent processes and accelerate project timelines. Two other proposals also signal Labour’s commitment to clean energy:

• The proposed National Wealth Fund, a £7 billion strategic investment vehicle is set for immediate establishment with a five-year spending timeline to invest funds across key sectors: £1.8 billion for port infrastructure, £1.5 billion for gigafactories, £2.5 billion for clean steel production, £1 billion for carbon capture, and £500 million for green hydrogen.
• The Contracts for Difference (CfD) scheme has increased the budget for renewable energy auctions to £1.5 billion, a £500 million boost from the previous year.

Along with the overturning of the onshore wind ban in England, these initiatives open up significant development opportunities even whilst they raise questions about grid capacity and the pace of necessary infrastructure upgrades. Crucially, Labour does acknowledge grid connection issues. The proposed Future Systems Operator (now known as the National Energy System Operator, NESO) addresses some long-standing industry needs for expedited decision-making on renewable proposals. It streamlines the approval process for renewable projects, aiming to reduce decision-making timeframes from years to months. NESO is meant to coordinate regional and national infrastructure planning, reform the planning system, and shift to a ‘first-ready, first served’ model for grid capacity allocation that could reduce project timelines and costs and provide a coordinated approach to grid development.

Also an opportunity is the government’s emphasis on sustainability and biodiversity in new developments, which aligns with growing investor expectations. For renewable energy development companies, the key will be taking advantage of these policy changes to secure faster and more committed capital for greenfield projects.