Commentary on provisions of Act
Section 1: Great British Energy
- Subsection (1) allows the Secretary of State by notice to designate a company as Great British Energy, and subsection (2) that such a company can only be designated if it is limited by shares and wholly owned by the Crown.
- Subsection (3) sets out the requirements for a notice designating the company. Those requirements are that it must specify the time from which the designation has effect and that it must be published by the Secretary of State.
- Subsection (4) sets out the circumstances in which a designation is terminated. These are, if the company ceases to be wholly owned by the Crown or the Secretary of State withdraws the designation.
Section 2: Crown status
- Subsection (1) provides that Great British Energy does not have any Crown status, and subsection (2) that Great British Energy’s property is not to be regarded as owned by, or on behalf of, the Crown. The effect of this section (subject to other sections of the Act) is to put Great British Energy in the same position as other corporate entities in the sense that it will have no special immunities or privileges.
Section 3: Objects
- Subsection (1) provides that Great British Energy’s articles of association must contain a statement of its objects.
- Subsection (2) restricts the objects of Great British Energy to: facilitating, encouraging and participating in the production, distribution and storage of clean energy; the reduction of greenhouse gas emissions from energy produced from fossil fuels; improvements in energy efficiency; measures for ensuring the security of the supply of energy; and measures for ensuring that slavery and human trafficking is not taking place in its business or supply chain. And any projects fulfilling the objects set out in this subsection could involve or benefit local communities.
- These subsections change the standard position under section 31(1) of the Companies Act 2006 which provides that, unless specifically restricted, a company’s objects are unlimited.
- Subsection (3) contains definitions of "clean energy", "distribution", "fossil fuel" and "greenhouse gas" which are relevant to the terms used in subsection (2).
Section 4: Financial assistance
- Subsection (1) enables the Secretary of State to provide financial assistance to Great British Energy. This will be done in line with its agreed financial framework and HMT delegations.
- Subsection (2) sets out that financial assistance under section 4(1) can be provided in any form, including grants, loans, guarantees, indemnities, and through acquisitions and contracts.
Section 5: Strategic priorities and plans
- Subsection (1) requires the Secretary of State to prepare a statement of strategic priorities for Great British Energy. This statement will provide Great British Energy with a steer on where, in the Government’s view, the company should prioritise and focus its activities
- Subsection (2) requires the first statement to be prepared within six months of Royal Assent, granted on 15 May 2025. Subsection (3) provides for a statement to be revised or replaced by the Secretary of State.
- Subsections (5), (6) and (7) provide that the Secretary of State must not, without the consent of the Scottish Ministers, Welsh Ministers, and Department for the Economy in Northern Ireland, include in a statement of strategic priorities anything which concerns a matter about which would be within the legislative competence of the Scottish Parliament or Senedd Cymru or concerns a matter about which meets the conditions related to Northern Ireland.
- Subsection (8) also requires Great British Energy to secure that its articles of association provide for the company to publish and act in accordance with strategic plans, which must reflect the Secretary of State’s strategic statement; and for Great British Energy to update those plans whenever the Secretary of State’s strategic statement is revised or replaced. The policy intention is that Great British Energy will do so within a reasonable timeframe, taking into consideration the scale of the changes required in response to any updates.
Section 6: Directions
- Subsection (1) allows the Secretary of State to give directions to Great British Energy and subsection (2) requires Great British Energy to comply with those directions.
- Subsection (3) requires the Secretary of State to consult Great British Energy, and such other persons as the Secretary of State considers appropriate, before giving a direction.
- Subsection (4) requires any directions given to be published and laid before Parliament by the Secretary of State.
- This section ensures the Secretary of State’s direction-giving power is of a reserve nature, exercisable in cases where a more precise, tailored, and expeditious form of intervention may be needed than general company law could afford.
- In line with the Government’s policy, this influence should be used sparingly in practice, and the default position is that Great British Energy is independent in regard to its operations and investment decisions. The Government is constrained by public law and public policy considerations to act rationally and proportionately in any use of its influence over the company.
- This power is consistent with the power that the Government has to direct comparable institutions, for example: the Department for Energy Security and Net Zero has a statutory power to direct Great British Nuclear, although this has never been used to date.
Section 7: Independent Review
- Subsection (1) requires the Secretary of State to appoint an independent person to carry out reviews of the effectiveness of Great British Energy.
- Subsection (2) requires the independent person to have regard to the statement of strategic priorities prepared by the Secretary of State under section 5.
- Subsections (3) and (4) require the report to be submitted to the Secretary of State who, in turn, must share it with the Devolved Governments and then publish it and lay it before Parliament.
- Subsection (5) requires the first of these reviews to be published within 5 years of Royal Assent and subsequent reviews at intervals of not more than 5 years.
Section 8: Annual accounts and report
- Subsection (1) requires Great British Energy to provide the Secretary of State with a copy of the annual reports and accounts that they will be required to produce by section 441 of the Companies Act 2006. Subsection (2) also requires the Secretary of State to lay a copy of these documents before Parliament.
Section 9: Sustainable Development
- This section requires Great British Energy to keep under review the impact of its activities on the achievement of sustainable development in the United Kingdom. Sustainable development means having regard for the impact of activities on the environment, society and the economy. Great British Energy will include – in its annual report – a report of its activities in relation to sustainable development.
Section 10: Extent, Commencement and Short Title
- Subsection (1) sets out the territorial extent of the Act which extends to the whole of the UK.
- Subsection (2) provides that the whole Act comes into force on Royal Assent.
- The title is the Great British Energy Act 2025.
