It was announced in the King’s speech on 17 July, that the new Labour government has introduced various bills that will affect the energy sector if they become law.
In this guide we introduce the Great British Energy Bill, the Crown Estate Bill and the Sustainable Aviation Fuel (Revenue Support Mechanism) Bill and provide insight on how these bills might impact international businesses.
The Great British Energy Bill will create a publicly-owned energy production company, Great British Energy (GBE). This company will own, manage and operate clean power projects, with a capitalisation of £8.3 billion of new money over the next parliament.
GBE presents particular opportunities for international businesses in the clean energy supply chain, including production, distribution, storage and supply of equipment, technology and capital, as GBE will need all of these in order to progress with its stated objectives.
The ban on onshore windfarms has been scrapped already, and discussions have begun with the devolved nations, with GBE looking over the next few months to recruit the key roles holder and undertake a programme of stakeholder engagement to develop its overall strategy. With this in mind, we expect that the Great British Energy Bill is high on the government’s agenda. It will be important for international investors to stay up-to-date with the relevant information over the coming months.
The Crown Estate Bill removes restrictions on the Crown Estate's activities, widening its investment powers and allows it the power to borrow from the exchequer in order to invest at a faster pace.
As the owner of the seabed of England and Wales and with significant landholdings on ‘dry land’, the Crown Estate will be able to offer more opportunities for those seeking to deliver wind projects or carbon capture infrastructure and international businesses looking to invest into such projects.
As with any proposed bill, there is no firm suggestion of when this shall become law, but once passed it would allow the Crown Estate to invest or borrow from the exchequer at a faster pace to accelerate project developments.
The Sustainable Aviation Fuel (Revenue Support Mechanism) Bill will support sustainable aviation fuel (SAF) production in the UK by:
Providers of SAF-generating technology and investors will be particularly pleased because of the increased demand for SAF accompanied by revenue certainty. The SAF obligation can be met by importing SAF, so non-UK based SAF producers, particularly those in close geographical proximity to the UK, will be able to access the growing market.
International producers and traders in the raw materials that are processed into SAF will see opportunities for exporting materials to the UK, or see an uptick in local requirements as SAF producers seek to satisfy demand.
There hasn’t been an indication of when we can expect this bill to become law, however it’s important that businesses are aware of any relevant updates.
The increase in renewable generative capacity that may follow the Great British Energy Bill and the Crown Estate Bill has not been matched with similar legislative dynamism. The ongoing and well-known constraints in the transmission and distribution networks - and potentially significant reinforcement costs - will continue to be a bottleneck for the growth of renewable energy generation in some parts of the UK, in spite of the proposed legislative agenda outlined in this note.
For further information, please contact the energy and resource management team.
