UK prime minister Andy Burnham is set to announce plans for a new public finance body aimed at attracting greater private investment into the grid.
Under the new proposals, set to be announced at Labour Party Conference, Burnham is set to reveal the introduction of a £4bn government body to invest in the electricity grid.
Funding for the new public finance institution, colloquially referred to as Puffins, is set to be forked out of existing budgets for Great British Energy, a new public finance body announced by the government last year, which had been allocated an 8.3bn funding pot including a £2.5bn carve out for nuclear energy.
Burnham’s announcement sets a key signal to private companies who are running the grid, amid a push to speed up the rollout of grid capacity and renewable energy. The new body will work alongside private companies, rather than replacing them.
UK electricity demand is set to more than double by 2050, with a lack of grid infrastructure representing a key bottleneck for the rollout of renewable energy. The National Audit Office estimates that some £70bn of additional investment in grid infrastructure is required over the coming four years if the UK is to meet its Clean Power 2030 targets.
Burnham’s announcement was welcomed by James Alexander, CEO of the UK Sustainable Investment and Finance Association (UKSIF), who said that the government was right to take the scale of underinvestment seriously.
“Delays in connecting renewable infrastructure to electricity networks can make the difference between investment staying in the UK and flowing overseas. Lengthy planning timelines can also derail major projects before they even get off the ground.
“Capturing this finance is essential for securing the future of our energy system while delivering growth and jobs across the country. GB Grid's success should be judged on whether it makes the country a more attractive destination for this global capital."
