The UK government has released its Industrial Strategy, which states its commitment to doubling investment in clean energy industries.
The government’s strategy is broken into eight sectors which the government said are already strong and therefore should have the potential for faster growth.
One of these is clean energy industries, within which the government has most focus on what it calls ‘frontier’ industries: onshore, offshore and floating wind, nuclear fission, fusion energy, carbon capture utilisation and storage (CCUS) including greenhouse gas removals (GGRs), hydrogen and heat pumps.
It does add that solar, bioenergy, storage including Long Duration Energy Storage, heat networks, and smart technologies are “also vital” for the clean energy mission but are not among the frontier industries.
Notably, another of the identified ‘growth-driving’ sectors Advanced Manufacturing includes batteries alongside areas such as aerospace and automotive.
The government will spend £2.5 billion over five years to lead the global race for fusion energy as part of its move to double investment in clean energy industries.
State-owned energy company Great British Energy has been allotted a further £700 million to help build manufacturing facilities here at home for key components for the clean power revolution, like floating offshore platforms, electric cables and hydrogen infrastructure.
Energy secretary Ed Miliband said: “For too long high electricity costs have held back British businesses, as a result of our reliance on gas sold on volatile international markets.”
Electricity networks ‘foundational’
The government has acknowledged that electricity networks will be foundational in achieving its clean power ambitions.
CEO of UK electrical equipment manufacturer Fundamentals Jon Hiscock said: “The UK’s ageing electricity network was never designed to handle the kind of power flows that come from decarbonisation. Turning ambition into delivery will be the real test.”
The government has further committed to developing an Industrial Growth Plan for electricity networks.
Green levies cut for big business
The Industrial Strategy includes a scheme to reduce electricity costs for big businesses by up to £40 per megawatt-hour.
The British Industrial Competitiveness Scheme will offer up to 7,000 electricity-intensive businesses in manufacturing sectors by exempting them from levies including the Renewables Obligation, Feed-in Tariffs and the Capacity Market.
Eligibility and more detail on the exemptions will come after a two-year consultation, which the government will launch soon.
The British Industry Supercharger will increase the discount that energy-intensive firms like steel, chemicals, and glass get on electricity network charges from 60% to 90% from 2026.
Energy secretary Ed Miliband said: “For too long high electricity costs have held back British businesses, as a result of our reliance on gas sold on volatile international markets.”
Phil Thompson, CEO of Balance Power, a renewable energy developer focused on behind-the-meter systems and power purchase agreements (PPAs) for businesses, said the levy exemptions “don’t tackle the root of the energy cost problem”.
He suggested that encouraging the adoption of behind-the-meter onsite renewable energy generation for businesses offers long-term price stability. The strategy does state an intention to launch a call for evidence on how the market for corporate PPAs can be developed and improved for industry, including where the UK can draw from international best practice.
The Industrial Plan also includes a plan to streamline grid connections for major investment projects, called the Connections Accelerator Service, that would prioritise connections for projects that create high-quality jobs and deliver significant economic benefits.
It is unclear how this ties in with plans from the National Energy System Operator (NESO) to reform the connections process.
New powers in the Planning and Infrastructure Bill, which is currently before parliament, could also allow the government to reserve grid capacity for strategically important projects.
The government described slow grid connections as one of the biggest barriers facing UK industry.
Addressing skills shortages
The Industrial Strategy states that the government will spend an additional £1.2 billion annually on skills by 2028-29 and deliver more learning opportunities in high-growth sectors through the Growth and Skills Levy.
This will include recruitment of 300 new planning officers to improve the responsiveness of planning departments—the training given to local planning authorities was highlighted by Solar Media Market Research analyst Josh Cornes in a recent article on Solar Power Portal.
Responding to the Industrial Strategy, Gemma Grimes, director of policy and delivery for solar trade association Solar Energy UK, said: “Planning departments have been chronically under-resourced, which has led to both delays and inconsistent decision-making, contributing to legal challenges. So bolstering the number of officers, as promised when the National Planning Policy Framework was launched late last year, is most welcome.”
The government’s strategy also states the Office for Clean Energy Jobs will publish a Workforce Strategy later this year.
To give greater confidence on what the government calls “high priority developments”, giving solar farms and data centres as examples, there will be a new 13-week target for planning decisions on applications called in by ministers.
UK prime minister Keir Starmer said the strategy marks “a turning point” for the economy, delivering “long term certainty and direction” for British businesses to invest and create jobs.
Energy minister Michael Shanks will give the keynote at Solar Media’s Clean Power 2030 Summits, held in London on 1-2 July. Bringing together the UK Solar Summit, the Wind Power Finance & Investment Summit and the Green Hydrogen Summit, the CP2030 Summits cover all the key technologies outlined in the government’s Clean Power 2030 Action Plan.
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