Official Report: Minutes of Evidence

The Chairperson (Mr Brett): I am delighted to welcome back Anne-Maire McConn and Paul Skillen. I will hand over to you.

Ms Anne-Maire McConn (Department for the Economy): Thank you for the opportunity to brief the Committee on current work on the legislative consent memorandum for the Great British Energy Bill. As you may recall, the Minister wrote to the Committee on 16 September 2024 and shared a copy of the draft legislation. The Great British Energy Bill was announced as part of the King's Speech in July 2024 following the formation of the Labour Government.

The Bill would establish Great British Energy, a new government-owned clean energy company. The intention is for the company to support the creation of jobs by investing in clean energy. Also, by reducing the UK's dependence on fossil fuels, it will aim to defossilise energy, drive down the UK's energy costs and ensure long-term energy security. The company will operate on a UK-wide basis. As energy responsibility is devolved to Northern Ireland and is the responsibility of the Minister for the Economy, the UK Bill triggers the legislative consent process.

On the purpose of GB Energy, its founding statement states that it will focus on investing in energy projects alongside the private sector to help to get them off the ground; helping projects through the various development stages to speed up the time that it takes to get them to the point of delivery; supporting local energy generation projects by working with local communities and councils etc; and building supply chains to boost energy independence and create jobs. Although we recognise the opportunities that such companies can provide in supporting the Executive's energy strategy by giving Northern Ireland businesses and communities access to a share of the £8·3 billion that the Labour Government have promised for GB Energy, it is important to ensure that the new company will operate in Northern Ireland in a way that respects our devolved position and aligns with the Executive's current and future energy priorities.

In his letter, the Minister advised that, at that time, there was insufficient detail available to make an effective assessment of how the Bill would impact on the devolved sphere. Since then, the Minister has met on several occasions with the Secretary of State for Energy Security and Net Zero and various GB Ministers to discuss the assurances that are required in advance of the detailed work on how GB Energy will deliver on its purpose.

That engagement has led to a draft amendment to clause 5, which is in the written briefing. Clause 5 refers to a:

that the Secretary of State for Energy Security and Net Zero will lay before Parliament. The draft amendment means that those strategic priorities and any revisions will now require the consent of the Department for the Economy and the other devolved Administrations on any matters that fall within the devolved competence.

Given that amendment, the Minister is engaging with his Executive colleagues on a potential recommendation that Great British Energy extend to Northern Ireland. We expect that the Executive will consider that very soon, and we would very much welcome the Committee's views to inform a potential debate in the Assembly.

The Chairperson (Mr Brett): Thank you very much, Anne-Maire. That is useful. Obviously, in a personal capacity, I am very supportive of the Minister getting this done as soon as possible. Do we have a timetable for when it is likely to be on the Executive's agenda?

Ms McConn: It is out, and we hope that the Executive will accept it. Basically, it is there and ready for them to accept. We hope that that will be very shortly. At that point, if they are happy with it, it will go forward for an Assembly debate and vote. We want to get it through as quickly as possible, because the Bill that is going through on the GB side has just been through Committee and is heading towards Third Reading. GB would like to get the Bill through that stage and then to receive Royal Assent so that the company can become operational and start to develop the specific, detailed processes for how it can deliver on its purpose.

The Chairperson (Mr Brett): This is out with Executive Ministers for comment and will then be tabled for approval. It has not been tabled for an Executive meeting yet.

Ms McConn: It has been tabled, but it has not been taken.

The Chairperson (Mr Brett): It has not made the agenda yet. OK. Fair enough.

Mr Honeyford: I have a couple of questions. Our energy policy reflects the fact that we are on an island but interconnected with the British island, which is separate: I get that. The bit that I do not get is just how this interfaces with our policies separately. I understand how Scotland and Wales are devolved units on an island . Effectively, they are not as devolved as we are. That is the bit that I do not get, and there is not a lot of information on how that will function. "Concern" is the wrong word, but I have questions around how that would work. How would storage work in Northern Ireland? I understand how it would work in England, Scotland and Wales, which, as a unit, are connected. You would be able to have a storage facility there. How would that work here? My question is about the practice rather than the principle: how will this function?

Ms McConn: Yes, I agree. That is exactly the question that was asked. The Bill is to establish the company, so it does not give much information on how it will do its work. Given that the GB system is separate and different in lots of ways from our system, that concern was raised, and that is why we and the Minister felt strongly that we needed that consent to the strategic direction given to the company. In that way, if there were something that impinged on our system differently, we would be able to make that case and say, "The direction that you are giving the company does not work for Northern Ireland". We would be able to have that conversation, and it would not happen without us.

We are having regular meetings with the Department for Energy Security and Net Zero (DESNZ) team that is setting up the company. It has been reassuring about the fact that the company is to be an operational company and will not step into the policy space at all. There is no intention that the company will come in and start changing the way that we do things or changing our priorities. It will work with our priorities. Our concern is to make sure that, whatever money is available, our local businesses and communities will get access to it, be able to apply for it and benefit from support for further projects.

The draft amendment is what reassures us that our special needs, as part of an island that is separate from the GB island, will be taken into account.

Mr Honeyford: It is about the operation, not the principle. I absolutely get the principle of trying to get involved and get it moving; totally. It is just about how, operationally, we do not get left out, if you like, because Scotland, England and Wales are taken as a unit. Will there be a ratio of that £8·5 billion, or whatever it was, or will it be, "We have £8·5 billion over here, and there is a token amount for Northern Ireland"?

Ms McConn: The way in which it will be set up will be through supporting projects. It will be direct support to projects that are able to apply for the funding. As policymakers, we are trying to ensure that the criteria that are set for support for those projects will enable our people in our system to, basically, have a fair opportunity to bid for it. That is what we are doing in our interaction: ensuring that the UK Government are aware of any differences that we have and any differences that there might be in our contracts. For example, a lot of them will probably be quite a bit smaller and that sort of thing. We are trying to ensure that those are built into the operational aspect, but we do not know how it will operate.

We do not know how it will deliver the money. We continue to ask those questions. They have not worked that through yet, which is part of the problem. That is why we felt that we had to have that consent aspect in the legislation. Had the legislation contained all those details, we would have been a lot more confident about saying that it is fine as it is. We just need to have the ability to say, "This does not work for us. Can we look at doing it in some way that does?". I absolutely take your point on board. That is the issue. It is the one that we have sought to address with the draft amendment: when the company is operational, how will it operate to the benefit of our people as well?

Mr Honeyford: Yes. It must be to the benefit of Northern Ireland and ensure that we are at an advantage in the operational piece.

Mr Delargy: I know that it is difficult to get clarity because, by nature, there is no clarity around it. I have a few questions. I appreciate that you will be able to answer some of them and, for some, there is probably no detail on them yet. Obviously, we need that detail in order to be across the issue.

The first question builds on David's point about devolution. If the company has rights over the seabed along the Irish Sea and that is being used for offshore energy, how does that respect devolution? Where is the input from the devolved Government on that? I do not know whether any broader conversations have been had on that.

Mr Paul Skillen (Department for the Economy): I think that the way in which the legislation works is that part of the seabed, five miles out or something like that — I cannot remember the exact distance; we can come back and confirm that — is within the land mass of Northern Ireland. That is my understanding. Beyond that, it would be outside our jurisdiction. I do not have the details, but we can certainly come back and provide detail on that.

Mr Delargy: It would be great if you could come back on that in writing. The specific point on which I would like clarity is how GB Energy will respect devolution if it has the rights over the seabed along the Irish Sea for offshore energy.

Obviously, there is an established all-Ireland electricity market; you know that better than I do. There is a role for EirGrid and SONI. Has either body even been consulted on the proposal?

Ms McConn: At this point, the legislation is just to set up the company. I absolutely accept your point that those bodies will have concerns and questions. Because there are no answers on how those things will operate, my understanding is that they have not been consulted at this point. Our role as policymakers is to ensure that, when it gets to that stage, those concerns are being fed in and that we are doing that. I am told that consultation and a big stakeholder engagement programme will be carried out. Obviously, we will be interested in that, as will all those other companies.

The thing to remember is that this company is an operational one to help get projects off the ground; it is not supposed to change the basis on which those projects work or how energy is used. It is basically to get in there and provide support, helping the projects to happen quickly.

Mr Delargy: Absolutely. It is about getting clarity. That is essential. We cannot have a retrospective process whereby we try to undo something that is in legislation. Is there any local oversight by the Utility Regulator?

Ms McConn: No. There is no oversight, because it is a stand-alone company that will operate in accordance with companies regulations and all that. Strategic direction from the Secretary of State will be its steer and the basis on which it will develop its plans. We will be interested to see those plans, but, from our perspective, it is the strategic steer that is important, because that will set the course. We want to make sure that we are fully represented and that we feed issues in. If there were a situation in which Ofgem was involved, we would make sure that the Utility Regulator got involved. That is our role, and we are aware of it. We are linked in through regular meetings with the team.

The company itself will be established in Scotland. A chair, Jürgen Maier, has been appointed, and he will, when the company is established, be the person whom we can ask questions of: "What are your plans for doing this? How will you ensure that all these things are taken account of?". I agree that there are lots of questions. At this point, we cannot answer them, because DESNZ cannot answer them yet. We will have to see how it goes, but the Minister is more comfortable that, with "consent" rather than "consult" built in, we are better protected.

Mr Delargy: That is essential. It is about how that forms part of the legislative basis rather than the policy basis. It is easy for anybody to change policy, but, unless it is enshrined in legislation, it will be difficult to compel the company to do any of it.

My final point is about nuclear power. Would the Executive have any rights over the installation of nuclear power, if that were proposed? Obviously, that is hypothetical, but, if that were to be proposed by GB Energy, a publicly owned company, would the Executive have any say in it?

Ms McConn: One of GB Energy's purposes relates to nuclear energy. The reason why I did not mention that is that nuclear is already a reserved matter: we, as a region, do not have that devolved to us. We have not been told of any plans for that to come to Northern Ireland, and, as things stand, because it is a reserved matter, this does not change that for us.

Mr Delargy: Thanks. There is not a lot of clarity, which must make your job extremely difficult, but it is about the concerns raised in looking at an overview, so I really appreciate your answers.

Ms McConn: Absolutely. As we get more information, we will be more than happy to share that.

Mr Delargy: That is brilliant. Thanks very much.

Ms McLaughlin: I will ask a question that you will probably not be able to answer. This all feels and sounds a bit like the levelling up initiative of the Conservative Government, which did not serve us well. It became a competitive business, even for community and voluntary organisations in Northern Ireland. It just did not work out at all. I am afraid that this organisation will open a competitive part that will disadvantage businesses and organisations here. That is one of my concerns, because that is what it feels like.

Is there any suggestion that we will be able to exercise agency over where the funding is allocated, even on a competitive basis, if that is the model that DESNZ is working towards having?

Ms McConn: That is a very interesting question. We will definitely take it on board when we are working with DESNZ. We do not quite know how the funding will be allocated. We do not know whether there will be direct funding to projects through a scheme or whether there will be a role for the Executive in steering some of it. That is where we will potentially be able to feed into the strategic priorities. We do not know the detail, however, because the Secretary of State has not yet drafted the statement on the strategic priorities. We have not seen such a statement. All that we know is that, when it is drafted, we will be consulted on it and be allowed to consent to it. When we are talking about how the money might be allocated and how things might be prioritised, we can definitely feed that in to try to get more information.

Ms McLaughlin: OK.

The Chairperson (Mr Brett): Thank you for the information that you have been able to provide at this stage, and thank you for your time.