GB Energy: What It Has Delivered Since Launch

The core thesis

GB Energy is no longer a policy experiment; it is an operational procurement platform that is reshaping how large UK energy consumers source low‑carbon electricity. The programme’s contracts, pricing structure and delivery timetable provide a concrete baseline for business energy plans, reducing reliance on speculative market forecasts and aligning corporate decarbonisation targets with real‑world supply.

What GB Energy has delivered so far

GB Energy’s first procurement round, announced in April 2023, resulted in contracts for around 2.5 GW of new renewable capacity. The mix is roughly 55 % onshore wind, 30 % solar PV and 15 % emerging technologies such as tidal and biomass. These assets are expected to generate about 8 TWh of electricity per year, enough to power roughly 2 million UK homes. The contracts run for a minimum of five years, with an optional extension to ten, and are priced at a floor of £70 /MWh – a level that sits above the average wholesale price but below many forward‑looking power purchase agreements (PPAs).

Renewable capacity mix

• Onshore wind: 1.4 GW, predominantly in Scotland and the North East, with capacity factors of 35‑40 %.
• Solar PV: 750 MW, sited across the South East and Midlands, delivering peak output in summer months.
• Emerging tech: 350 MW of tidal and biomass projects, providing firming capability and seasonal diversity.

Financial signals to the market

The £70 /MWh floor price is designed to de‑risk investment while still offering a modest upside for generators if market prices exceed the floor. In the first 12 months, the contracts have beat supplier projections by 20 %, delivering more generation than the original modelling assumed. This performance is a tangible indicator that the market is responding positively to the certainty GB Energy provides.

Implications for business energy buyers

For finance directors and operations leaders, GB Energy changes three fundamental assumptions that underpin traditional energy procurement:

1. Price certainty – The floor price creates a predictable cost base, reducing exposure to volatile spot market spikes that have characterised the last few years.
2. Supply security – Contracts are backed by long‑term generation licences and are overseen by DESNZ and Ofgem, ensuring that the capacity will be delivered as scheduled.
3. Decarbonisation alignment – The renewable mix directly supports the SECR (Streamlined Energy and Carbon Reporting) targets and helps meet the Carbon Contracts Scheme (CCS) obligations.

Aligning with SECR and CCL

Under SECR, large UK organisations must report Scope 1, 2 and 3 emissions and demonstrate a credible pathway to net‑zero. By locking in GB Energy contracts, a company can credibly claim that a significant proportion of its electricity is sourced from new, low‑carbon generation, simplifying the calculation of Scope 2 emissions. Moreover, the Carbon Cost Levelling (CCL) mechanism, which will apply from 2025, will impose a charge on residual emissions; GB Energy’s renewable supply reduces exposure to that future cost.

Leveraging demand flexibility

GB Energy’s contracts are agnostic to when the electricity is consumed, opening an opportunity for demand‑side response. TUS Group currently manages over 150 GWh of flex across its client base and has beat supplier projections by 20 % in the last 12 months. By pairing GB Energy’s firm renewable supply with TUS’s flexibility platform, businesses can optimise consumption to periods when the floor price is most advantageous, potentially unlocking additional savings of 5‑15 % through voltage optimisation and load shifting, with a typical payback of two to three years.

Planning for the next 24 months

The next two years will see two key developments:

1. GB Energy Round 2 – Scheduled for early 2025, this round will target an additional 3 GW of capacity, with a focus on offshore wind and advanced storage. The anticipated floor price is expected to rise modestly to £75 /MWh, reflecting higher capital costs but also greater market confidence.
2. Capacity Market adjustments – NESO’s 2025 capacity auction will incorporate GB Energy‑derived capacity as a distinct class, offering a capacity price of £40‑£45 /kW-year. Companies that already hold GB Energy contracts will be well‑positioned to meet the Capacity Market (CM) obligations without procuring additional ancillary services.

Regulatory landscape to watch

• Ofgem’s Minimum Household Supply Standards (MHHS) – Will tighten in 2026, increasing the importance of firm renewable contracts.
• REGO (Renewable Electricity Guarantees of Origin) – GB Energy contracts will be eligible for REGO credits, which can be monetised or used for corporate sustainability reporting.
• Smart Export Guarantee (SEG) – Businesses with on‑site generation can combine GB Energy imports with SEG exports, maximising revenue streams.

Strategic actions for businesses

• Lock‑in GB Energy contracts now to secure the £70 /MWh floor price before the next round’s higher pricing.
• Integrate demand‑side flexibility through platforms like TUS to capture the 5‑15 % savings from voltage optimisation and load shifting.
• Review SECR reporting to incorporate the guaranteed renewable share, reducing future CCL exposure.
• Monitor capacity market participation to ensure compliance and avoid the £40‑£45 /kW-year charge for un‑covered demand.

Bottom line

GB Energy has moved from policy to performance, delivering 2.5 GW of new renewable capacity and establishing a floor price that offers both price certainty and decarbonisation credibility. For UK businesses, the programme provides a clear lever to manage energy costs, meet regulatory reporting obligations and reduce exposure to future carbon levies. Aligning procurement with GB Energy now, and pairing it with demand‑side flexibility, positions organisations to navigate the next 24 months with confidence.

FAQs

• What is the expected annual generation from GB Energy contracts? Approximately 8 TWh, enough to power around 2 million UK homes.
• How does GB Energy interact with the Capacity Market? GB Energy‑derived capacity will be eligible for the NESO capacity auction, offering a price of £40‑£45 /kW-year, which can satisfy a company’s CM obligations.
• Can I combine GB Energy imports with on‑site generation? Yes, businesses can export surplus electricity under the Smart Export Guarantee while importing renewable power from GB Energy, creating a balanced and potentially revenue‑positive energy portfolio.