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Where in Scotland will Labour base GB Energy?: Front runners

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Where in Scotland will Labour base GB Energy?: Front runners

Speculation is mounting on where the UK Government will establish GB Energy following Labour’s landslide victory in the General Election.

Energy Voice has analysed where Prime Minister Sir Keir Starmer’s much talked about – but little understood – energy company will be based.

On the campaign trail Starmer, along with net zero secretary Ed Miliband and Scottish Labour leader Anas Sarwar, dangled the plans to establish the £8.7billion energy company somewhere in Scotland but repeatedly declined to confirm where it would be based.

Several areas including the north-east of Scotland put forward strong arguments for why they should be chosen. Insiders have suggested four areas will be shortlisted – but there will likely only be one chosen.

Grangemouth

Grangemouth has come out as the front runner to be the location of GB Energy.

This comes on the back of increasingly warm words by Labour figures north and south of the border after the decision by PetroIneos to shut down the oil refinery at Grangemouth, putting hundreds of jobs at risk.

Sir Keir and First Minister John Swinney held “constructive” talks on Grangemouth when they met at Bute House during the Labour leader’s first trip north of the border as Prime Minister.

The new PM said: “The point of this meeting was to reset the relationship in a respectful way, in a constructive way, and to recognise that on the economy, energy and very pressingly on Grangemouth, there is room for us to have a constructive way of delivering for very many people across Scotland.”

The facility at Grangemouth – a joint venture between state-controlled PetroChina and billionaire Sir Jim Ratcliffe’s Ineos – is one of Scotland’s most important industrial sites but also its biggest polluter.

Glasgow

The city is a strong contender due to its proximity to Holyrood in Edinburgh; its central, urban location as well as its past, current and future strengths as an low carbon energy capital.

Glasgow was where the UK’s first national oil company – the British National Oil Corporation – was based when the North Sea first started producing. And while BNOC was eventually sold to BP, Glasgow is now home to the headquarters of Iberdrola-owned Scottish Power while SSE employs 600 in the city in addition to the 1,700 working out of its Perth HQ.

Anas Sarwar MSP, Leader of the Scottish Labour Party (L) and Rutherglen MP and newly appointed junior energy minister Michael Shanks (R © Supplied by Colin D Fisher
Anas Sarwar MSP, Leader of the Scottish Labour Party (L) and Rutherglen MP and newly appointed junior energy minister Michael Shanks (R).

Meanwhile Michael Shanks, MP for the contiguous Rutherglen constituency south and east of Glasgow, has been appointed as a junior energy minister.

Mr Shanks said the appointment would help “work on our commitment to create GB Energy” and would be handy nearby if it was in Glasgow.

… Or Edinburgh

Some have suggested the UK government’s Scotland Office in Edinburgh will be home to the energy firm although this would likely lower expectations significantly.

Inverclyde

Clydeside with Port of Glasgow at its heart has long been a Labour regeneration project. The area scored higher than Aberdeen and Peterhead in the fierce competition to attract green freeport status, which went to consortiums in Inverness and Cromarty Firth and sites on the Forth at Burntisland, Grangemouth, Leith and Rosyth.

Previously the area was the beneficiary of millions of public sector investment through the regeneration agency Riverside Inverclyde which had been set up in 2006 but whose ambitious plans foundered in the wake of the banking crisis.

If the aim of GB Energy is, as Sir Keir has said, to deliver  “jobs and investment in Scottish communities that for far too long have been let down” then reviving the region’s fortunes with a new HQ may be a good start.

Aberdeen

Sarwar has said there is a “very strong case” for the Granite city to be the home of GB Energy.

A spirited campaign led by the Aberdeen and Grampian Chambers of Commerce (AGCC), advisory firm True North and industrialist Sir Ian Wood set out why the former oil and gas capital of Europe should become the net zero capital, with GB Energy adding to its efforts to build on its offshore and subsea expertise.

They argued its history as a global energy hub hosting 40% of Scotland’s energy workforce would provide the best place for it to succeed.

A Scotland-wide poll found that a third of Scots (33%) consider Aberdeen as the right location for the new body. Glasgow ranked second, with just over 21% of the vote, with Edinburgh coming in third on 19%. Dundee ranked fourth, receiving a little less than 7% of the vote.

Sarwar previously said that there were “lots of people making pitches where it should be”. He said: “When they are in Glasgow, they say Glasgow. When I am in Inverclyde people say it should be in Inverclyde; in Fife, the same; Edinburgh the same, in Aberdeen obviously the same as well.”

What is GB Energy?

Great British Energy has become one of the new Labour Government’s key energy pledges since it was launched at its party conference in Liverpool in 2022.

Labour says its plans for a publicly-owned energy generation company will create 53,000 new clean energy jobs by harnessing investment from the private sector.

It will focus investment on wind and solar projects across the UK, as well as floating offshore wind, hydrogen and CCS.

It’s initial £8.3billion budget will be funded in part by the windfall tax on oil and gas firms, a sore point for many North Sea firms.

With the aim of creating a clean power system by 2030, it is envisaged the new company will save Scottish households £8.4bn in that time.

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