GB Grid launched as new public arm of GB Energy

Prime Minister Andy Burnham has officially confirmed the creation of Great British Grid, a new division of the state-backed energy firm GB Energy. The announcement, made at the Labour Party conference in Liverpool, marks the second new wing added to the organisation since its inception. The new entity is designed to focus specifically on transmission infrastructure, aiming to accelerate grid connections and increase competition within the UK energy sector. Burnham stated that the move is intended to challenge private sector operators, drive down costs, and speed up the process for businesses seeking to connect to the national grid.

The prime minister argued that Britain’s electricity network requires significant improvement to support economic growth. He noted that many businesses have complained about difficulties in securing grid connections, a problem he described as pushing up costs and dragging down growth. Burnham emphasised that without fixing these infrastructure bottlenecks, the UK would struggle to attract the inward investment and growth it needs. To address this, the government plans to grant a stronger role to mayors and local leaders, a measure set to be included in the upcoming national energy strategy. This approach is intended to back local democratic control over energy decisions.

Dan McGrail, chief executive of GB Energy, welcomed the launch of the new division. He stated that the initiative builds directly on the company’s existing work, which includes investing in renewable projects across the UK, supporting community energy, and creating jobs in the supply chain. McGrail described the mission of accelerating grid infrastructure delivery as central to creating a more secure energy system for the future. The new body will collaborate with existing network operators to deliver grid infrastructure projects more quickly, ensuring that the necessary upgrades are implemented to meet the country’s demands.

Burnham also addressed the issue of energy affordability, noting that British businesses and consumers pay some of the highest energy costs in Europe. He set a target for these costs to be in line with those of neighbouring countries within ten years. To achieve this, he said the government must reform the energy market to better serve the public interest. In a direct address to the public, Burnham stated that the value added tax on electricity bills would be removed starting on the following Thursday, providing immediate relief to households and businesses.

The announcement received support from industry bodies such as Offshore Energies UK. Enrique Cornejo, the policy director of the trade body, described faster grid connections as critical to delivering the UK’s energy transition and security. He highlighted that projects in offshore wind, carbon capture, and hydrogen are currently held back by long waits to connect to the network. Cornejo stressed that without the infrastructure to move power from generation sites to demand centres, these projects cannot deliver the lower bills, growth, and jobs that households and businesses require. He called for clear long-term signals and effective coordination to provide industry with the certainty needed to plan and invest.

However, the move was not universally praised. Russell Borthwick, boss of the Aberdeen and Grampian Chamber of Commerce, criticised the decision as a poor use of scarce public money. He argued that the government should focus on fixing the slow pace of project approvals rather than creating a state-backed competitor. Borthwick expressed concern that diverting a large share of GB Energy’s finite budget into grid infrastructure could starve nascent sectors, such as floating offshore wind, of the support needed to build UK supply chains and manufacturing capacity.

Political opposition to the new division was also voiced. Andrew Bowie, the shadow energy secretary, stated that his party would scrap GB Energy if it were to take power at the next general election. He described the firm, which recently opened its headquarters in Aberdeen, as a white elephant and a vanity project. This criticism comes as GB Energy’s chief executive has indicated that the firm is on track to employ 200 people by the end of the year.