Chancellor Rachel Reeves announced that Great British Energy, a new public body, will receive an initial £125 million to drive forward project development and establish headquarters in Aberdeen. This includes £100 million allocated in 2025/26 for clean energy project development, supplemented by £25 million for the company's setup. Over the next five years, Great British Energy is anticipated to receive £8.3 billion from the National Wealth Fund to facilitate the UK's clean energy transition.
The budget also dedicates £134 million to port infrastructure for floating wind and sets aside £3.9 billion for the UK's first carbon capture and storage clusters. In a boost to hydrogen initiatives, £2 billion will be directed towards 11 projects from the initial Hydrogen Allocation Round.
Additional fiscal measures include a rise in the Energy Profits Levy (EPL) on oil and gas companies from 35% to 38%, alongside the removal of the 29% investment allowance, with the levy extended until March 2030. First-year allowances under the EPL will remain, with a consultation in early 2025 on future tax responses to price volatility once the EPL concludes.
Dan McGrail, CEO of RenewableUK, welcomed the government's plan for transforming UK ports into offshore wind industrial hubs. He emphasized the need to expedite grants and incentives from the National Wealth Fund, pointing out the competitive environment in offshore wind investments.
Scottish Renewables CEO Claire Mack commended the £134 million port investment, highlighting its role in supporting floating offshore wind. She expressed approval of the £125 million for Great British Energy as a catalyst for clean energy project investment.
PwC UK's Vicky Parker noted the budget's limited new funding for energy but reiterated the importance of GB Energy and the National Wealth Fund in attracting private capital. Parker emphasized that large-scale clean energy programs rely on both private capital incentives and swift public sector action.
Roy Bedlow, CEO of Low Carbon, endorsed the policy shift to facilitate green infrastructure spending, underscoring the importance of grid connection acceleration to unlock private investments and address ongoing grid delays that hinder renewable power deployment.
These budget measures continue to build on the UK government's strategy to boost private investment in clean energy. Recent initiatives include reversing restrictions on onshore wind, approving significant solar projects, enhancing the Contract for Difference allocation round, and attracting £34.8 billion in private investment from the International Investment Summit.
