The Granite City (Special) Edition: GB Energy in Aberdeen

GB Energy in Aberdeen: a catalyst for Scotland’s green growth and industrial transformation. A look at the recent confirmation that GB Energy will be based in Aberdeen and while looking ahead to Floating Offshore Wind 2024 9-10 October in Aberdeen.

The timing is of course never accidental. Prime Minister Keir Starmer’s announcement that GB Energy, the UK government’s new clean energy company, will be based in Aberdeen has been hailed as a significant win for both Scotland and the future of renewable energy in the UK. Aberdeen, long known as the centre of the North Sea oil and gas industry, now according to these plans, stands at the forefront of a green revolution. But beyond the symbolism, what does this mean for Scotland’s role in the UK’s energy transition, and what should GB Energy focus on to make the most of this opportunity?

Of the course the other coincidence, on purpose or otherwise, is that it comes just 2 weeks before RenewableUK’s and Scottish Renewables’ annual Floating Offshore wind 2024…in Aberdeen.

Why Aberdeen?

Starmer’s announcement at the Labour Party conference on Tuesday this week makes clear that the future of British energy will, as it has for decades, be driven by the talent and expertise of the people in Aberdeen, the "Granite City." This decision has been well-received, especially in light of Aberdeen’s challenges in recent years, as the North Sea oil and gas basin has been in decline.

However, this decision is not just about geography or giving a boost to a city that has fallen on harder times, though it would be naive to say Scottish Politics and Labour’s fight for dominance with the SNP who governs in Edinburgh, has nothing to do with it. It does however reflect Aberdeen’s continuing central role in the UK’s energy landscape. The expertise developed over decades in offshore oil and gas can now be harnessed to drive the renewable energy transition. The North East of Scotland has the infrastructure, skills, and innovation potential to become a global hub for clean energy technologies, from offshore wind to hydrogen and beyond.

Recovering lost green ground

While the announcement is certainly a boost, it is also a chance for the Labour govt to recover some of the ground it lost in the run-up to the general election. Labour’s ￡28 billion Green Prosperity Plan, initially aimed at driving the UK’s transition to a low-carbon economy, was drastically scaled back due to concerns about fiscal responsibility. At the time, Chancellor Rachel Reeves reduced the plan to just ￡4.7 billion, in response to Conservative criticism of excessive borrowing and spending.

However, at this week’s conference, Reeves suggested a shift in fiscal thinking that could breathe new life into Labour’s green ambitions. She hinted at changing how national debt is measured to recognise the benefits of investment in infrastructure, rather than simply counting the costs. This change in fiscal policy could unlock more borrowing for long-term projects like GB Energy, allowing Labour to make good on its promise to drive growth through clean energy investment. Energy Secretary Ed Miliband stated that the Chancellor’s comment was “one of the most significant things a chancellor has said in 29 years I’ve been coming to conference.”

So here is hoping.

The opportunity: floating wind and ScotWind

So with the Floating Wind Conference in sight, I am pretty sure a question in the corridors will be, so what will GB Energy focus on? And BTW, I still hate the name. It’s too, well ‘Boris-ish’.

It of course looks like a large sum. It is but it is also not a lot depending on what you want to achieve. They – at the moment – have ￡8.3 billion to deploy over 5 years, the company has a mandate to co-invest in low-carbon technologies, accelerate renewable energy projects like wind and solar, and scale up local energy initiatives. However, to make the biggest impact, GB Energy needs to ensure that it leverages its capital not just for the energy transition, but also for real industrial growth.

One of the most promising areas for this is ScotWind and floating wind technology and it’s value chain. Floating wind offers massive potential. This is a key advantage for Scotland, which has a wealth of offshore wind resources in its deeper waters. GB Energy, with its base in Aberdeen, is perfectly positioned to support the development of floating wind technology and the supply chain required to make it a global leader in the sector.

While we know that floating wind deployment globally will not be as fast as it looked 12-18months ago, some markets are poised. And Scotland is one of them. We already have Vargronn and Flotation’s 400MW GreenVolt project with a CfD secured.

And this is the opportunity.

ScotWind, with its vast offshore wind projects, represents a once-in-a-generation opportunity to create thousands of high-quality jobs and establish a strong renewable energy supply chain. However, this will not happen by clicking our red shoes together, closing our eyes and wishing. GB Energy needs to focus on building and enabling the infrastructure and supply chain needed to support these projects, ensuring that the economic benefits are felt across Scotland, not just in the energy sector but throughout manufacturing, engineering, and technology.

We need an industrial policy that is meaningful and not just a series of govt papers and press releases.

Scotland’s role

Basing GB Energy in Scotland is more than just a symbolic nod to Aberdeen’s past—it’s a recognition of Scotland’s pivotal role in the UK’s clean energy future. Scotland already generates the majority of its electricity from renewable sources, and it has the potential to go even further, especially with the development of offshore wind and green hydrogen.

For the UK to meet its climate targets, Scotland will have to play a leading role. The location of GB Energy in Aberdeen is an acknowledgment that the country’s energy transition will be powered by Scottish expertise, infrastructure, and resources. The oil and gas industry may be in decline, but the skills developed over decades in the North Sea can now be redeployed to build the next generation of energy solutions.

In ABL Group, we already live this. For many years our Aberdeen team supported only oil and gas clients with MWS for its projects, rig inspections, asset integrity management (AIM), vessel inspections and surveys for the many support vessels. While this is still something we support North Sea oil and gas client’s with and will continue to do, the same office also has delivered the MWS for Ocean Wind’s Moray projects, our vessel surveys and inspections are now on SOVs and other construction support vessels. Even our AIM team are supporting renewables in optimising operational assets. So this is a real opportunity, we just need to grasp it.

The challenge: strategic focus and fiscal ‘flexibility’

For GB Energy to succeed, it needs more than just a good location and talented workforce. It requires a clear strategy to use its capital effectively. Will it prioritise wind, solar, and – gulp - nuclear projects, or focus on emerging technologies like green hydrogen and energy storage? How will it balance short-term projects that deliver quick wins with long-term investments that will shape the future of the UK’s energy system?

There is also little point in taking small minority share positions in fixed offshore wind farms. That would tell me it’s a failure. We are not short of minority shareholders for vanilla fixed offshore wind projects. It would allow Labour to say ‘we publicly own XX GW of offshore wind’, but that would be a meaninglessly empty claim.

Crucially, GB Energy must also work out how to leverage its capital to drive not just the energy transition but real industrial growth. The energy transition represents a huge economic opportunity, but only if the necessary supply chains and grids are in place to support it. This is where Scotland, and Aberdeen in particular, have a critical role to play. By focusing on supply chain development, from manufacturing to technology and logistics, or grid investments, GB Energy can ensure that Scotland becomes a leader in the green industrial revolution.

However, none of this will be possible without the right fiscal environment. Reeves’s comments at the Labour conference suggest that Labour is considering loosening the UK’s strict fiscal rules to allow more investment in infrastructure. This shift could be critical in ensuring that GB Energy has the capital it needs to drive both the energy transition and broader industrial growth. The UK, which currently counts public corporation debt as part of govt debt, is an outlier in Europe. A more flexible fiscal framework, similar to what is used in the EU, could unlock the resources necessary to support projects like ScotWind and GB Energy without jeopardising fiscal stability.

So, a new industrial era for Scotland

The decision to base GB Energy in Aberdeen is not just a boost for the city—it’s a recognition of Scotland’s crucial role in the UK’s energy transition. The challenge now is to ensure that GB Energy focuses on the right areas, using its capital to drive both clean energy projects and real industrial growth. By ideally prioritising the supply chain development needed for ScotWind and floating wind, GB Energy can position Scotland as a global leader in renewable energy.

At the same time, Labour’s shift in fiscal thinking offers hope that the UK can move beyond short-term fiscal constraints and embrace the long-term benefits of green investment. GB Energy represents a once-in-a-generation opportunity to reshape the UK’s energy landscape, and its success will depend on whether it can make the strategic decisions necessary to turn capital into lasting growth.

ABL Group companies, OWC , ABL, and Longitude Engineering all have offshore wind focused teams in Scotland:

• OWC and ABL in Glasgow providing technical advisory and engineering for offshore wind developers and financial players, and T&I and MWS for developers respectively.
• ABL in Aberdeen providing expert T&I through marine consultancy and MWS, vessel inspections and surveys and AIM for offshore wind developers and service companies.
• Longitude in Dundee providing vessel design and consultancy, specialising in clean fuels/netzero propulsion and C/SOV and Cable Lay vessel design and consultancy.

If you are attending Floating Offshore Wind in October in Aberdeen, reach ????out for a catch up. I will be attending with

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