Great British Energy will be fully operational from October, releasing capital into the market, and will launch a campaign based on “proof and progress” to counter its critics.
Dan McGrail, the interim chief executive of the state-backed investment vehicle, told an audience in Aberdeen that the organisation will move from policy to delivery.
Addressing the event organised by Prosper, he said GB Energy will have the explicit role of an “activist investor”, identifying opportunities and accelerating them where private markets are too slow or risk-averse.
It will focus on floating offshore wind, hydrogen, carbon capture and storage (CCS), local energy solutions. Mr McGrail recently said floating offshore wind farms offered a “huge opportunity” for British technology, and the supply chain already exists in the oil and gas industry, along with the potential to export energy.
GB Energy will be keen to ensure projects do not stall due to financing or market hesitancy. Mr McGrail emphasised that “proof and progress” are the best responses to GB Energy’s critics who have questioned how much it will contribute to the energy transition.
Starting in October, the organisation intends to deliver real world outcomes that shift public and industry perceptions, said Mr McGrail.
He is tasked with quickly scaling up GB Energy which is coming under pressure to deliver on Labour’s pledges.
There has been criticism that since it was announced last summer there has been little action and no jobs created. However, the legislation required to set it up only achieved royal assent last week. Until now it has been restricted on what it can do.
Mr McGrail was appointed to the position in March from his post as CEO of RenewableUK. He is a former employee of GB Energy’s chair Juergen Maier, who was the CEO of Siemens UK from 1986 to 2019.
His initial six-months period in office will expire in October and so either he or a new CEO should be in place to take it to its next stage.
Mr Maier recently said he was “puzzled” by reports that GB Energy would employ a thousand staff at its headquarters. On the contrary, he said it was important for the HQ to be “lean” and to focus on creating thousands of jobs in the field.
In a podcast, Mr McGrail said it expects to employ “between 300 and 400 people by 2030” and is starting to build the team. It is looking for property in Aberdeen.
But he said he wanted to be judged the impact it makes through its support for projects whicjh will be “measured in the thousands of jobs”.
He added that there had been other misconceptions about GB Energy, including expectations that it would sell electricity. “We are going to be focused on the generation of electricity,” he said.
“We will develop, invest and own energy generation projects and we will invest in the supply chain.”
He said he understood that the public was frustrated by not seeing falls in prices, but said that the UK is reliant on a lot of gas which dictates the price of electricity.
He said savings on the cost of energy would come as projects were rolled out. He gave examples of how a network of schools and hospitals which had invested in solar were saving huge sums of money.
On the prospects for renewables and GB Energy’s role, he said: “The UK is brilliant at innovation but we often fail when we go through the commercialisation process.
“We have a really world class framework in which investment is possible.”
Asked if GB Energy was “friend or foe” to the oil and gas industry, he said: “This is a transition. The emphasis should be on transition. We have an opportunity here that we learn the lessons of poorly managed transition in the past. I want to make sure we do it better this time.
“Orsted, today a fully offshore wind company, was the Danish natural oil and gas company. RWE, one of biggest generators of renewable electricity, was a major contributor of coal-fired generation.”
“We want to go faster, but there are limitations on capital. Big infrastructure is challenging. Bringing that public sector support is an important part of the equation to speed it up.
“We have the stability to encourage investment.”
Podcast here:
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