Great British Energy Bill (First sitting)

Debate between Catherine Fookes and Perran Moon

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[Catherine Fookes]

Q It is good to see you both. You were not here for the earlier sessions, but there were a lot of questions about whether there is enough detail in the Bill. Before I was an MP, I used to be the CEO of a charity; if the objects of that charity had gone into an incredible amount of detail telling me exactly what to do, it would have been very difficult 10 years down the line, when I joined the charity, to pivot and do what we did. I think you are absolutely right: we are hearing from every single witness that the Bill needs to be general enough to allow the business plan to be developed by the experts running the company. You are chiming with everyone else, which is interesting and good.

My question is about tidal power. I represent a Welsh constituency, Monmouthshire. We have the River Severn in the south of the constituency, which is a tidal river, and we have the Celtic sea. What opportunities will the Bill give to generate more tidal power?

Dan McGrail: The Bill allows space for GB Energy to take quite an activist role in the sector. I am aware of tidal power companies that are already very keen to engage with GB Energy on specific proposals. One thing about tidal power is that we have seen the success of many projects through the CfD auctions. We need to see them come to investment decisions. The more we can see a state actor enabling companies to take decisions, the more it will help to scale up the industry and then the technologies. From the technologies, we can hopefully deliver the kind of supply chain growth and jobs in local communities to which we all aspire.

[Perran Moon]

Q Clause 5(1) requires the Secretary of State to

“prepare a statement of strategic priorities”.

I have been listening carefully to the priorities on skills and innovation from your perspective. Let me ask you both: if you were Secretary of State, what would be your key strategic priorities be for the Bill?

Adam Berman: The first is public value, which goes beyond the ability of GB Energy to create profits and return them to energy bills or whatever mechanism it might come up with. That is not to say that that is not important, but if this is new money—a significant amount of new capital—being made available by the Treasury, it is about how we, as a society and as an economy, can get the most out of those investments. So I would say public value, which is about not just financial returns but broader public benefits.

Secondly, it is about spreading economic activity and about how that links into the industrial strategy. That might be for the supply chain and also for GB Energy, but we should think not just about particular technologies but about particular regions.

A third priority would be the delivery of the UK’s legal objectives—its legally binding climate commitments.

A fourth priority would be the delivery of the National Energy System Operator’s priorities, which links to the strategic spatial energy plan that we have already been talking about, and ensuring that it helps to foster a workable decarbonised power sector. For example, we could see solutions such as GB Energy putting investment into wind or solar in areas with higher constraint costs or lower population centres with higher land use costs, which are not as attractive to private investors at the moment, but which with GB Energy’s lower cost of capital may well still be a profitable enterprise. It is about how we can have a win-win with NESO’s objectives.

Finally, impact on investment cannot be ignored. I recognise that it is not the Government’s intention at all that there be an impact on private sector investment, but we need to ensure, as a founding principle, that there is not a risk that any GB Energy investment could deter or crowd out private sector investment.

Dan McGrail: I would add one thing to that very good summary. There are a number of new institutions being set up at the same time—NESO, mission control, GB Energy. There are also a number of big initiatives such as strategic spatial energy plans and centralised network planning. It would be very helpful for the sector and for industry to understand the interaction of those with the national wealth fund. I almost see an organogram in my mind of how things flow. In my conversations with the sector, there have been questions about where the limit of GB Energy ends and where the National Wealth Fund begins, and so on and so forth. It would be enormously helpful for the sector and for other institutions such as the Scottish National Investment Bank and UKIB to understand how they fit within that matrix.