The Times They Are a-Changin' for the UK’s Energy Sector

Private Sector Companies active in Britain’s Energy Sector must lean into a new paradigm that will change how the country develops and delivers energy

Sixty years have passed since Bob Dylan first sang The Times They Are a-Changin' on his 1964 album of the same name. In that year, the UK’s energy system was a monolith based almost solely on 'King Coal' with a smattering of hydro, gas and nuclear in the mix.

Fast-forward to this autumn, which has seen the closure of the UK’s last coal-fired power station and change is once again blowing in the wind. The new publicly owned company established to accelerate the energy transition and ‘turbo-charge’ Britain's energy security - Great British Energy or GBE - took form this week with the third reading of the bill going through the Commons to all but confirm its creation.

With £8.3 billion of new money committed over the next five years to invest in and develop clean energy, GBE sets out to winnow the UK's carbon emissions with echoes if not the substance of the US's epoch-making Inflation Reduction Act (IRA).

What does GBE set out to achieve?

The body reflects the Secretary of State Ed Miliband's drive to re-establish the UK's Net Zero leadership credentials following mixed signals from the previous Government about tackling climate change. Its new chair Jurgen Maier has stated that the success of the body should be judged on the jobs and ‘prosperity’ it creates.

It seeks to align the industry into one common goal – decarbonisation – buttressed by a new 'Mission Control' headed by Chris Stark, formerly of the Climate Change Committee, which aims to deliver the Clean Power 2030 Action Plan expected later this year.

If successful, GBE will fundamentally alter how the UK brings new energy technologies to market with the aim of a fully decarbonised power system by 2030.

Encouragingly, there is a commitment to partner with the private sector in both ‘mature’ low-carbon technologies such as wind, solar and nuclear energy and in 'less mature' technologies such as floating offshore wind, carbon capture, tidal power and hydrogen with the aim of ‘derisking’ these tricky technologies.

This smorgasbord of different energy sources provides broad incentives for organisations in the space and their backers to look again at the UK energy system.

Any leader of an energy company with a renewables, climate tech or nuclear portfolio already present in the UK or planning investment must be encouraged by an open invitation to invest and grow with a vehicle to support them.
Dig into the detail, though, and much remains opaque even after last week’s Bill and Budget, which confirmed £25m for GBE’s creation over 2025-2026 and another £100m capital funding.

Moreover, £8.3 billion sounds like a lot of money but in terms of recasting the UK's energy system it is small change.

It is not even clear how this investment will be raised.

How can businesses engage with GBE and what should they be thinking about?

A strategic approach to communications with GBE, bodies like the Crown Estate, key government departments (No10, Energy Security and Net Zero, HM Treasury, Department for Business and Trade) and a new cadre of MPs (335) must be prioritised.

Many of the new cohort of MPs have grown up with direct experience of the impacts of climate change and they want to do something about it. MPs understand that recasting the UK economy to Net Zero will create jobs in their constituencies over many decades.

Early Government statements about GBE argued that the British people should 'own and benefit' from the country's resources. Clearly, this will have to be matched by delivering renewable developers and their investors stable returns.

Investors should be highly encouraged by the partnership with The Crown Estate to open up the seafloor for offshore wind. The Crown Estate has a £16 billion portfolio of land and seabed, and returns its profits to the government thereby bringing long-term expertise, stability and financial clout to the equation.

But how do you incentivise communities to accept solar stations in the fields around their towns and villages, or onshore wind turbines in the countryside?

Organisations in the energy sector need to connect directly with local communities where plans for renewables brush up against local opposition.

Battlelines are being drawn. Grid infrastructure (pylons), onshore wind turbines and solar already face opposition. This situation will become more acute given the sharp reflexes of some sections of the UK media to anything badged 'Net Zero'.

Therefore, the energy sector must work hand-in-glove with GBE and Mission Control to tell a positive and proactive narrative about renewable energy and why inaction is so costly. The previous decade's relatively surreptitious communications on energy must end.

Nuclear – a silent partner?

Nuclear industry stakeholders are concerned about GBE's focus on renewables at the expense of their sector. Last week’s Budget neither allayed fears nor confirmed nuclear’s status as a favoured solution. £2.7 billion of funding was committed to Sizewell C’s development to 2025-26 and a Final Investment Decision (FID) on whether to proceed with the project will be taken at Phase 2 of the Spending Review in Spring 2025.

Clarity on the status of the SMR (small modular reactor) programme will not be provided until early 2025 despite Rolls-Royce recently receiving orders for their technology in a partnership with the ĈEZ Group of Czechia.

Industry stakeholders must reinforce the message to Government that renewables and GBE needs nuclear as only a new fleet of nuclear reactors can provide the baseload to balance the system. With approximately 15 GW of existing nuclear set to go offline within the next decade, the UK simply cannot sit on the fence.

Accordingly, one of GBE's first challenges will be to establish clear lines of responsibility with the Government’s existing nuclear body, Great British Nuclear (GBN), to avoid overlap. GBE must work with GBN to cut through bureaucratic hurdles to get the new nuclear the country needs to balance the impact of intermittent renewables coming onto the system.

Renewables and nuclear will need different structures, pathways and funding routes if the UK is to ensure that the energy system works in harmony with different technologies creating synergies rather than bottlenecks.

How this will be done has been left unanswered but the Times They Are a Changin’ with eery parallels to the reconfiguring of the energy sector of the mid-1960s in the UK.

Yet, these are still early days.

Those organisations in the energy sector committed to growth must lean into GBE now and engage with those departments, ministers and politicians that are actively shaping the contours of the new body.

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This article was written by Dr Michael Zdanowski, who has spent nearly 20 years working as a Communications and Government Relations Consultant in the UK energy sector. The views expressed in this article are his own.