How much the King can make from Labour's GB Energy deal and how he could spend it

The King is likely to make millions after the Crown Estate signed a deal to partner with Labour’s new state-owned energy company.

The Government announced on Thursday that the newly launched GB Energy would be using the seabed owned by the Royal Family to build offshore wind farms.

King Charles has already enjoyed a significant income boost thanks to profits the Crown Estate makes from renewable energy.

Here’s how he is expected to benefit from the deal:

How does King Charles make money from renewable energy?

The majority of the King’s income comes from profits made by the Crown Estate, an independently run business that is responsible for managing the land owned by the British Royal Family.

The profits from the Crown Estate go to The Treasury, with a percentage being passed on to the King. This is called the sovereign grant.

EMBARGOED TO 0001 WEDNESDAY JULY 24 File photo dated 01/08/13 of an aerial view showing the new Centrica Energy Lincs offshore wind farm off the Lincolnshire coast. Profit from the royal family's land and property holdings more than doubled to a record ?1.1 billion last year, driven by a short-term boost from offshore wind farms. Issue date: Wednesday July 24, 2024. PA Photo. The Crown Estate said earnings surged by more than ?658 million during the year ending March 31, from ?443 million the previous year. See PA story ROYAL CrownEstate. Photo credit should read: Anna Gowthorpe/PA Wire — An offshore wind farm off the Lincolnshire coast (Photo: Anna Gowthorpe/PA)

The Crown Estate owns the majority of the seabed around Britain and has significantly boosted its profits in recent years by leasing the land to developers of offshore windfarms.

As a result of soaring revenues, last year the Government adjusted the share of the Crown Estate profits that would be sent to the King. The King now receives 12 per cent of the profits, compared to 25 per cent previously.

The reduction was requested by the King who said the profits from offshore wind should be used for the “wider public good”.

How much will the King make by partnering with GB Energy?

Despite the reduction in the percentage of Crown Estate profits being sent to the King, he is still likely to benefit greatly from the partnership with GB Energy.

Annual accounts released by the Crown Estate on Wednesday show the estate made £1.1bn in profits last year, with offshore wind playing a huge role. This means the sovereign grant will increase by over 50 per cent from £86m in 2024-25 to £132m in 2025-26.

It’s unclear exactly how much will be made from the partnership with GB Energy, but it is expected to contribute to increasing profits for the Crown Estate for the rest of the decade.

The partnership plans to deliver enough offshore wind to power 20 million homes by 2030. The Crown Estate had already set this target for the seabed it owns, but the Government said the partnership with GB Energy will “unleash billions of investment in clean power”.

EMBARGOED TO 0001 THURSDAY JULY 25 File photo dated 24/03/23 of Labour leader Sir Keir Starmer during a visit to the Beatrice wind farm off the Caithness coast. Britain's newly created state-owned energy company, Great British Energy, is to partner with the monarchy's property firm to help speed up the building of offshore wind farms. Issue date: Thursday July 25, 2024. PA Photo. The Government said on Thursday that GB Energy will help develop future offshore wind projects, as part of its push to hasten the UK's transition to renewable energy. See PA story POLITICS GBEnergy. Photo credit should read: Paul Campbell/PA Wire — Sir Keir Starmer during a visit to the Beatrice wind farm off the Caithness coast (Photo: Paul Campbell/PA)

What will the money be spent on?

Broadly, the sovereign grant is used to pay for the running of the royal households and any expenses related to the Royal Family’s official duties, such as travel and accommodation. The most recent royal accounts revealed the household would get two new helicopters over the coming year.

Some of the increased profits from the Crown Estate is currently being used to fund a 10-year, £369m renovation of Buckingham Palace, which is expected to complete in 2027.

LONDON, UNITED KINGDOM - 2022/05/09: General view of Buckingham Palace and Victoria Memorial, which is currently under renovation. Preparations are under way around Buckingham Palace for the Queen's Platinum Jubilee, marking the 70th anniversary of the Queen's accession to the throne. A special extended Platinum Jubilee Weekend will take place 2-5 June. (Photo by Vuk Valcic/SOPA Images/LightRocket via Getty Images) — Buckingham Palace is currently undergoing a 10-year renovation (Photo: Vuk Valcic/Sopa Images/LightRocket via Getty)

One the refurbishment of Buckingham Palace is complete, the King intends to request a reduction in the amount he receives from the Crown Estate during the next review of the sovereign grant, which will take place in 2026/27.