What does it mean for Scotland and Aberdeen?

The UK government has confirmed that Aberdeen will be the home of a new state energy company.

Prime Minister Sir Keir Starmer told a Labor conference in Liverpool that Great British Energy will operate outside the city.

It won’t power homes, but it will help finance new and existing clean technologies, as well as small and medium-sized renewable energy projects.

The Government has been criticized for its delay in announcing the company will be headquartered in Aberdeen but Sir Keir said it would be led by “the talent and skills of the workers in the Granite City”.

Great British Energy is one of Labour’s key election promises and is always planned to be based in Scotland.

BBC News Scotland revealed earlier this month that the decision has been taken to base the company in the oil and gas capital of England.

The company’s chairman, Juergen Maier, has now confirmed it will also operate sites in Glasgow and Edinburgh.

But there was some confusion over what it was designed to do, forcing Labor to clarify its role during the election campaign.

Tuesday’s announcement means industry and consumers are a step closer to understanding what the creation means for Britain’s energy future.

Ed Miliband, Britain’s energy security secretary and net zero secretary, said the company would help “become a clean energy superpower, with a fully decarbonised power system by 2030.”

He described GB Energy as “a new national champion allowing us to reap the benefits of Britain’s abundant natural resources, with clean energy projects in communities throughout our country, to create the next generation of good jobs, reindustrialising Britain.”

The government has published five main functions for companies:

• Project development – leading projects through development stages to accelerate delivery, while achieving greater value for the UK public
• Project investment – investing in energy projects together with the private sector, helping them to come out
• Local Power Plan – supports local energy generation projects through cooperation with local authorities, joint authorities and communities
• Supply chain – building supply chains across the UK, promoting energy independence and creating jobs
• Great British Nuclear – exploring how Great British Energy and Great British Nuclear will work together, including considering how Great British Nuclear functions will fit in with Great British Energy.

One founding statement said: “Great British Energy will own, manage and operate clean power projects. It will be a company that will generate energy in its own right, working in partnership with the private sector for the good of the country.”

GB Energy has launched a partnership with The Crown Estate, the statutory company that runs the £16bn land and seabed portfolio owned by the monarch.

The government believes this will reduce the time scale currently experienced when trying to build large infrastructure projects such as wind farms and transmission lines.

The Crown Estate estimates this partnership will result in up to 20-30GW of new offshore wind development reaching the seabed lease stage by 2030, which it says is enough to power nearly 20 million homes.

Ministers also claimed the deal “has the potential to leverage up to £60bn of private investment into the UK’s drive for energy independence.”

The government has pledged to invest £8.3bn of new money into companies during this parliament.

That is expected to be raised through a windfall tax on oil and gas companies.

The party had previously said it would not issue new oil and gas licenses but also said it would not revoke existing permits.

The company will be operated independently and all profits will be reinvested, meaning it will be self-financing as soon as possible.

Confirmation that Aberdeen will be the home of GB Energy was met with praise from the prime minister during a speech in Liverpool.

“We said, GB Energy, the publicly owned national champion, the vehicle that will take forward our mission of clean energy, we said it should be in Scotland, and rightly so,” he said.

“But the truth is, it can only be based in one place in Scotland.

“So today, I can confirm that the future of UK energy will be powered as it has been for decades, with the talent and skills of workers in the Granite City with GB Energy based in Aberdeen.”

That has fueled speculation for the past month even as the current debate will be about what it means for projects and infrastructure in the city, which faces a difficult transition from oil and gas to renewable energy.

The SNP and Conservatives claim that up to 100,000 jobs could be under threat from Labour’s policy on oil and gas licences.

However, the industry estimates that the total number of Scottish jobs dependent on the sector is 60,000.

Tuesday’s announcement did not include further details on the number of jobs to be created by GB Energy.

Responding to the news, Russell Borthwick, chief executive of the Aberdeen and Grampian Chamber of Commerce, said it would secure the north-east’s status as the “global energy capital” for decades to come.

“We are home to more than a thousand energy supply chain companies and the largest part of the workforce ready to deliver the UK’s transition to net zero,” he said.

“With our people, skills, strategic infrastructure and pipeline of projects in place, the north east of Scotland is poised to lead the way.

“However, we don’t need to kill one industry to grow another – in fact, quite the opposite, because one cannot exist without the other.

“We therefore call on the UK government to use next month’s budget to restore confidence in the North Sea to protect the jobs, supply chains and energy production needed to ensure a just transition,” he said.

GB Energy will not immediately cut bills for consumers, as the global energy market continues to deal with problems caused by the war in Ukraine.

The decision to limit winter fuel allowances makes this area difficult for Labour.

But ministers are keen to stress that this is the first part of changing the way the UK sources, manages and modernises the energy sector.

To do so, GB Energy must transition the oil and gas sector to renewables, redesign how the grid operates, deliver green energy directly to homes and end the UK’s dependence on foreign energy.

Ed Miliband said: “In an unstable world, the only way to ensure energy security and protect bill payers permanently is to accelerate the transition away from fossil fuels and towards clean energy homes.”

Gas and electricity prices will rise by 10% in England, Scotland and Wales from October.

Under the new energy price cap, a typical annual dual-fuel bill paid by direct debit is £1,717 a year.

At the same time, more than 10 million pensioners will no longer get their winter fuel payment to help with their bills at the coldest time of the year.