Great British Grid: competition not nationalisation

Andy Burnham used his first conference speech as Prime Minister to unveil Great British Grid (GBG), “a new branch of Great British Energy” (GBE) and “a publicly-owned company that will challenge the private sector operators”. The government’s announcement is more emollient: GBG is “designed to work alongside existing private sector investors, developers and network operators”, investing public capital alongside private investment and competing for transmission projects. GB Grid takes no existing asset into public ownership.

What has been announced

The Guardian had reported access to a £4bn pot within GBE. The announcement gives no figure: start-up costs come from GBE’s existing budgets, and “the long-term budget for this expanded remit will be considered as part of a future spending review”. Ofgem says over £70bn of transmission investment may be needed by 2031.

The regulatory architecture is unchanged. Ofgem remains the independent economic regulator, NESO “remains responsible for operating, planning and coordinating the electricity system”, and GBG is not expected to affect existing project commitments under “in-force and in-negotiation Ofgem licences”.

Does GBE already have the vires without new legislation? Probably. Its objects include participating in the “distribution” of clean energy, which the Great British Energy Act 2025 defines to include “its conveyance and transmission”. Wires carry all electricity, not only clean energy, so the point is arguable. The Secretary of State can steer GBE by revising the statement of strategic priorities (the current statement does not mention networks) or by direction; and GBE’s framework document contemplates subsidiaries. Primary legislation looks unnecessary, though GB Grid would need a transmission licence to own assets.

Will GBG use the CATO regime?

The announcement comes close to saying so. The government will “accelerate the competitive tendering of transmission projects, allowing a wider range of organisations, including Great British Grid, to compete to deliver new network infrastructure”. It does not name the Competitively Appointed Transmission Owner (CATO) regime, but onshore that is what this means.

Under the Electricity Act 1989, by Energy Act 2023 amendments, onshore Tender Regulations took effect in April 2025, with NESO as delivery body. A winning bidder designs, builds, finances, owns and operates the asset for a 35-year, availability-based Tender Revenue Stream, and NESO’s market sounding covered generation and demand connections as well as reinforcements. Offshore, Ofgem is developing an early competition “OFTO build” model on similar lines.

The government intends GB Grid to compete, and it could face the incumbents, including National Grid, which Ofgem decided in 2024 may bid subject to conflict mitigation and ring-fencing. Three caveats remain. First, timing and volume. Early competition targets assets commissioned in the mid to late 2030s. No CATO project has been identified yet: Ofgem expects NESO to request the first “later this year” and the first tender “during 2027”. The network plan from which projects will be drawn was published in June 2026, the draft CATO licence consultation closes on 16 October, and NESO then aims to add candidates roughly every six months. It is not clear how GB Grid will accelerate this process.

Second, competitive neutrality. Ofgem has gone to some lengths to stop incumbents cross-subsidising bids, requiring separate bidding units, financial ring-fencing and independent audit. A state-capitalised bidder raises the mirror-image question. Under the Subsidy Control Act 2022, assistance confers an “economic advantage” only if its terms are more favourable than the market would offer, so GBG’s funding terms will matter. Cheaper public capital could cut consumer costs; handled badly, it could deter the private bidders the regime needs.

Third, NESO identifies CATO projects from its network plans and Ofgem confirms them; they must be new, separable, needed with reasonable certainty and likely to benefit consumers. A business wanting a connection soon cannot simply invite GBG to bid.

Self-build may matter sooner

The announcement also promises reforms letting developers and businesses “build their own connections where appropriate”, although, unlike the pre-speech briefing, it does not say GB Grid will co-invest in them. Ofgem reported in June “strong demand” for self-build and ownership of high-voltage assets and aims to consult this autumn on an independent transmission owner (iTO) licence and on easier self-build and transfer. Its archetypes include third-party ownership of connection assets, and it is considering how an iTO licence would interact with CATO. Some developers want to self-build without keeping the assets. Ofgem’s answer is transfer to the network company; with an iTO licence, GB Grid could offer another, as co-investor or owner.

The announcement cites Irish reforms “reducing connection times by up to 11 months”, consistent with the case studies Ofgem cites, though Ofgem cautions that results here depend on the project and on transmission owners relieving existing network constraints.

What to watch

The Energy Networks Association says operators are “keen to work with government” on cutting costs, provided infrastructure delivery is maintained; TRIG’s Minesh Shah warns that “the binding constraint isn’t capital” but “the skilled workforce to build the grid capacity required”. Four questions matter: what “accelerate” means against Ofgem’s 2027 timetable; how the tender rules accommodate a state-backed bidder; GB Grid’s budget at the spending review; and how quickly the iTO and self-build reforms land. The National Audit Office warned this month that “delivering all the grid upgrades by 2030 will be very challenging”. If GB Grid adds capital and competitive tension without chilling private investment, it opens a new route through the bottleneck.