Last week the government announced ambitious plans to scale up affordable, clean, homegrown power and build thriving green industries in Britain that will boost the country’s energy security and independence and reduce household bills for the long term and maintain a world-leading position in achieving net zero. These include:
Generating clean energy
1. World leading commitment to carbon capture, usage and storage: the first projects will be announced to progress to the next stage of the negotiations to rollout the first carbon capture clusters in our industrial heartlands. The Prime Minister and Energy Security Secretary have also launched the round for areas to apply for 2 additional future clusters and confirmed there will be an opportunity for further projects to be added to the first 2 clusters. These announcements build on the £20 billion CCUS funding package announced in the Spring Budget - all of which demonstrates the government’s commitment to making the UK a world leader in this sector.
2. Delivering Great British Nuclear: Great British Nuclear will initially be led by Simon Bowen as interim Chair and Gwen Parry-Jones as interim Chief Executive Officer. Gwen will commence the role in May to allow her to hand over her responsibilities at Magnox in an orderly way. Based in or around the Greater Manchester area, this organisation will be responsible for driving the delivery of new nuclear projects, with the aim that up to 25% of the UK’s electricity could be from nuclear sources by 2050 – up from 15% today. The first job for Great British Nuclear will be launching a competition to select the best small modular reactor technologies for development – smaller nuclear plants based on the latest technology – by Autumn.
3. Delivering a hydrogen economy: announcing funding awards to new hydrogen projects across the across the country, from the £240 million Net Zero Hydrogen Fund, to kickstart this sector in the UK. Announcing a shortlist of 20 projects to take to the next stage in the first electrolytic hydrogen allocation round. The government’s ambition is for the UK to be generating enough to power all of London for a year by 2030.
4. Accelerating deployment of renewables: the government today opens the bidding for the fifth round of funding through the world-leading Contracts for Difference scheme, for an initial budget of £205 million, to support new renewable energy projects across the country alongside private investment. On top of this, Grant Shapps is launching the Floating Offshore Wind Manufacturing Scheme, providing up to £160 million to kick start the investment in port infrastructure projects needed to deliver our floating offshore wind ambitions, and a new taskforce will be established to support more solar power coming onto the grid.
Reducing demand by increasing household and business energy efficiency
5. Reducing energy bills by increasing energy efficiency: up to 80% of people across the country in council tax bands A-D will qualify for support to make their homes more energy-efficient under a new ECO+ scheme, to be called the ‘Great British Insulation Scheme’. This will mean around 300,000 more of the country’s least efficient homes could benefit from improvements saving households on average around £300-400 a year on energy bills, and forms part of a £1 billion energy efficiency programme running from Spring until March 2026 – contributing towards the government’s target to reduce energy demand by 15% by 2030.
6. Reducing our reliance on fossil fuels to heat our buildings: a new £30 million Heat Pump Investment Accelerator is designed to leverage £270 million private investment to boost manufacturing and supply of heat pumps in the UK. The government announces an extension of the Boiler Upgrade Scheme, until 2028, which offers a grant of up to £5,000 to anyone buying a heat pump, helping to make it cheaper to buy and run a heat pump than a gas boiler.
7. Driving household electricity bills down: confirmation that the government will set out plans during 2023-2024 to rebalance gas and electricity costs in household bills with the aim of making electricity bills cheaper and speeding up electrification for households and businesses.
Speeding up the planning process, greening the economy and attracting finance
8. Speeding up planning: a new set of revised Energy National Policy Statements for consultation which will speed up planning approvals for the energy infrastructure needed to power homes and businesses with the latest low carbon technologies, such as solar power and offshore wind. An investigation by the Electricity Networks Commissioner will examine what else can be done to speed up network infrastructure, with recommendations delivered to Ministers by June. A consultation has also been launched today to ensure local communities can benefit from the development of new network infrastructure in their area.
9. Decarbonising transport: reducing carbon emissions in the transport network will be key to reaching net zero, and so the government is investing a further £381 million through today’s launch of the Local Electric Vehicle Infrastructure fund, along with £15 million for the On-Street Residential Chargepoint Scheme, to help install tens of thousands of new chargers across the country – alongside private sector investment. This supports the world-leading zero emission vehicle mandate which the government is consulting on from today, helping to provide certainty to the sector and boosting the market of second-hand electric vehicles. In addition, we are driving domestic production and use of sustainable aviation fuels (SAF) by opening the second round of the £165 million Advanced Fuels Fund and launching the second SAF mandate consultation.
10. Mobilising private investment: the Chancellor of the Exchequer Jeremy Hunt will today unveil an update to the Green Finance Strategy that will mobilise the billions of private investment needed for net zero and nature recovery. It includes the next steps to becoming the world’s first Net Zero-aligned Financial Centre, by consulting on requirements for the UK’s largest firms to publish net zero transition plans mirroring requirements for financial firms; consulting on regulating ESG rating providers; and announcing a series of new investment roadmaps sign posting opportunities in the offshore wind, hydrogen, CCUS and heat pump sectors. The government is also launching a review, led by Lord Harrington of Watford, into how the UK can better attract foreign direct investment across five growth areas, including green industries.
11. Boosting exports and regulation: UK Export Finance has also been given an extra £10 billion capacity to boost exports, including from the UK’s world leading clean growth sectors. The government will also publish Patrick Vallance’s Pro-Innovation Regulation of Technologies Review to support growth and innovation in green industries, and its response, which accepts all 9 recommendations including on grid capacity, heat pumps and electric vehicle charging infrastructure.
12. Addressing future carbon leakage: alongside this, the government is also publishing a consultation on measures to address future carbon leakage risk - where businesses move production and associated emissions from one country to another due to differences in climate regulation or carbon pricing. This will give industry confidence to invest in the UK in the knowledge their decarbonisation efforts won’t be undermined.
