Last Wednesday, the National Wealth Fund (NWF) priorities were stated by Government, together with its link with GB Energy, which has now kicked off announcing its first big project investment.
NWF will put £5.8bn into green hydrogen and other projects in the next 4 years, with an increase in capital limit to £7bn to get bigger risk projects.
NWF has four investment principles
Investment that supports the government’s growth and clean energy missions.
Investments in capital-intensive projects, businesses or assets.
Investments intended to deliver a positive financial return for the Exchequer
Investments are expected to crowd in significant private capital over time.
where capital intensive projects are:
Prioritising investment in the modern Industrial Strategy sectors of clean energy, digital and technologies, and advanced manufacturing, alongside transport.
Committing at least £5.8 billion into green hydrogen, carbon capture, ports, gigafactories and green steel.
Considering investments in “dual-use technologies” across these priority sectors which better support the UK’s defence and security.
Flexibility to invest in support of emerging government priorities and in response to changing market conditions.
DESNZ wrote that
“The NWF remains the UK’s principal investor and policy bank, and GBE will play a new and distinct role of a developer.” This role will be more active than previously indicated, with GB Energy expected to:
Lead the development of clean energy assets from inception and own these assets for the taxpayer over the long term.
Co-develop projects with partners, through equity stakes and joint ventures.
Invest in more developed projects that are entering construction or are already in operation, to help build GBE’s development expertise as it scales up.
“If a project is looking for development and capability support, it should go to GBE.”
“The NWF remains the place for clean energy projects to go if they want a policy bank to help plug a financing gap.”
The key announcement on Friday was that GB Energy has claimed its first big project, investing in solar for schools/hospitals costing £200M to cover 200 schools and 200 hospitals, beginning this summer. Ed Milliband said,
“This will provide a return for public service straight away… this will cut these school and hospital energy bills by an average of £25,000 for schools and £45,000 for hospitals, and that money will start flowing straight away.”
Also “The net zero economy grew three times faster than the rest of the economy last year… this is the growth opportunity of the 21st century. Turn your back on net zero and you turn your back on business investment, good jobs, innovation, investment for the future.”
The fact is that GB Energy finalises its bill in Parliament next Tuesday 25 March 2025. We all hope it gets through. But we must apply hydrogen with solar and wind to make this profitable by filling the gaps that plague renewable energy generation, especially in UK winters.