The short version
- A new public company called Great British Grid will be established to invest in and compete for electricity transmission connections alongside existing private operators.
- The initiative aims to address significant delays in grid hook-ups that are hindering renewable energy projects and contributing to high business costs.
- Funding for the new body will be drawn from the existing budget of GB Energy, while broader fiscal challenges loom ahead of next month's Budget.
Prime Minister Andy Burnham is preparing to introduce a major structural change to Britain’s energy infrastructure during his first party conference address as Labour leader. The announcement centers on the creation of a new publicly owned entity, branded Great British Grid, which will be tasked with investing in and competing for electricity grid connection projects. This move marks a significant shift toward greater public control over utilities, a central theme of Burnham’s campaign for power earlier this year.
The primary objective of the new body is to accelerate the speed at which businesses and energy generators can connect to the national grid. Current delays in these connections have been identified as a critical bottleneck, particularly for renewable energy projects such as offshore windfarms that require extensive rewiring of the aging transmission network. By introducing a public competitor into the market, the government hopes to drive down costs and improve delivery times, thereby alleviating what Burnham has described as a crippling cost crisis for businesses.
Under the proposed framework, Great British Grid will operate alongside the three private companies that currently own and manage Britain’s grid infrastructure. Rather than replacing these entities entirely, the new public company will compete for transmission connection projects. Additionally, the plan includes measures to make it easier for firms waiting for connections to finance their own infrastructure, with GB Grid offering support and potential co-investment in these projects. This hybrid approach seeks to leverage private sector efficiency while ensuring public oversight and investment.
Funding for Great British Grid will not require new expenditure but will instead be sourced from the existing budget of GB Energy. This public green investment company, established by Labour last year and headquartered in Aberdeen, has been designated as the financial vehicle for this expansion. The decision to utilize existing resources reflects the constrained fiscal environment facing the government, particularly with a Budget scheduled for the end of next month that will be complicated by rising borrowing costs.
The urgency of grid investment is underscored by recent estimates from the energy regulator Ofgem, which projects that £70 billion in investment will be needed between 2025 and 2031. This figure represents a quadrupling of the current investment rate. However, the National Audit Office has warned that the backlog of projects waiting to connect to the grid has grown significantly, with delays increasing rather than decreasing. The transition from large fossil fuel stations to remote renewable sources necessitates this extensive modernization, making the speed of connection a critical factor in meeting climate and energy security goals.
Burnham’s speech is expected to frame these infrastructure changes as part of a broader strategy to bring UK energy costs in line with other European nations within ten years. He has promised an honest conversation with voters about difficult economic subjects, moving away from traditional conference rhetoric toward a message of hope and practical solutions. The prime minister has indicated that the usual celebratory tone is less appropriate given the current economic challenges, emphasizing instead the need for pragmatic policy adjustments.
Beyond energy policy, the address will also touch on funding mechanisms for a new NHS-style social care system for England, which Burnham announced over the weekend. Details on how this ambitious plan will be financed are expected to be revealed, adding another layer of complexity to the government’s fiscal outlook. The next general election must be held by August 2029 at the latest, and the government aims to roll out the new social care system from 2030, requiring careful long-term financial planning.
Speculation has also emerged regarding the future of the triple lock pension pledge, which guarantees annual increases in state pensions based on the highest of inflation, average wage growth, or a 2.5% floor. With an aging population driving up costs, Chancellor John Healey has declined to guarantee that this policy will remain in the next election manifesto. This potential review signals a willingness to reconsider long-standing commitments to free up funding for other priorities, including social care and energy infrastructure.
Sources behind this briefing
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- BBC News↗Burnham to unveil public body to invest in electricity grid
