The UK government plans to increase its clean energy investment by more than £30bn/yr over the next 10 years as part of its broader industrial strategy, it announced today.
The new Clean Energy Industries Sector Plan sets out a framework to boost the UK' economy to 2035 by investing in low-carbon technologies. It focuses on key sectors including offshore and onshore wind, nuclear fission and fusion, hydrogen, carbon capture, usage and storage (CCUS) and heat pumps.
State-owned entity Great British Energy will invest more than £8.3bn during this parliament, including £1bn for a Clean Energy Supply Chain Fund to support domestic manufacturing. The National Wealth Fund, with £27.8bn in capital, will channel at least £5.8bn into CCUS, hydrogen, ports and green steel projects. And state-owned development bank the British Business Bank will allocate £4bn under its Industrial Strategy Growth Capital package to attract £12bn in private investment for climate technology firms, the government said.
The contracts for difference scheme's newly launched "clean industry bonus" has committed £544bn to offshore wind supply chains, potentially leveraging £9bn in private funds, with discussions under way to extend this to hydrogen and onshore wind. The offshore wind sector is projected to contribute £2bn-3bn of gross value added per gigawatt installed and could support 100,000 jobs by 2030, the government said.
Nuclear fission initiatives include £300mn for the high-assay low-enriched uranium fuel programme, while the projected 3.2GW Hinkley Point C and 3.2GW Sizewell C nuclear plants aim to pass on 64pc and 70pc, respectively, of the construction value to UK businesses. Fusion energy will receive £2.5bn over five years to advance research, including the Spherical Tokamak for Energy Production prototype by 2040.
Hydrogen projects, backed by the hydrogen allocation rounds, are expected to secure £400mn in private investment by 2026, with a regional hydrogen network planned for 2031. CCUS will benefit from £9.4bn to support the East Coast and HyNet clusters, with further funding for the Acorn and Viking clusters under review. And a £13.2bn Warm Homes Plan aims to boost heat pump demand, supported by an investment accelerator competition to expand manufacturing.
Starting in 2027, the British Industrial Competitiveness Scheme is intended to reduce electricity costs by up to £40/MWh for more than 7,000 electricity-intensive businesses in manufacturing sectors such as automotive, aerospace and chemicals. Industrials will be exempt from levies used to fund renewables obligation schemes, feed-in tariffs and the capacity market. And the government plans to increase support for about 500 energy-intensive firms such as steel and glass manufacturers by raising their electricity network charge discount from 2026 to 90pc from 60pc.
The plan projects significant job growth by 2035, with a forthcoming Clean Energy Workforce Strategy to address skill shortages in engineering and manufacturing, the government said.
