The UK government unveiled a £960 million funding package last week (17 November) to be allocated to sectors including offshore wind, electric vehicles (EVs) and batteries.
In what will likely be a very welcome package to British manufacturers, HM Treasury will allocate the funds to a Green Industries Growth Accelerator that will support clean energy manufacturing.
Technologies that are set to be supported via this Accelerator include EVs, electricity networks, carbon capture, utilisation and storage, hydrogen, nuclear and offshore wind.
The government believes this will “enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and strong deployment offer”.
It is worth noting that this is the second show of support the government has provided the offshore wind sector in just a matter of days. On 16 November, a day before the £4.5 billion funding was announced, the UK government said it would raise the Administrative Strike Prices (ASPs) for a number of renewable technologies in the next Contracts for Difference (CfD) round.
Of the technologies, offshore wind saw the largest increase as its strike price rose by 66% from £44/MWh to £73/MWh for the upcoming Auction Round 6 (AR6). Unsurprisingly, the industry was very pleased with this increase with many believing it could attract significant investment in the sector after a disappointing AR5.
The government has also unveiled the Industrial Energy Transformation Fund which aims to support energy intensive sectors transition to low carbon technologies. This could help reduce emissions and create initial demand for technologies such as hydrogen.
Jeremy Hunt, the chancellor of the exchequer, said: “Britain is now the eighth largest manufacturer in the world, recently overtaking France. To build on this success, we are targeting funding to support the sectors where the UK is or could be world-leading.
“Our £4.5 billion of funding will leverage many times that from the private sector, and in turn will grow our economy, creating more skilled, higher-paid jobs in new industries that will be built to last.”
Alongside the funding announcement, the UK government has also accepted 14 recommendations that will enable advanced manufacturing processes to better utilise low-carbon technologies and better drive net zero into the heart of the nation.
One of these recommendations includes accelerating the deployment of digital twins, which enables companies to create accurate digital replicas of the full manufacturing process.
Digital twins can be utilised across a range of sectors however, and the energy industry has been exploring this via numerous partnerships. In fact, a report released by Energy Systems Catapult earlier this year stated that both government and regulators could use the technology for future policies.
New commitment will help ‘compete with international competition’
Many organisations are delighted with the news of the funding package with this expected to support domestic manufacturing capabilities and bolster the UK’s presence on the global energy transition.
The Offshore Wind Industry Council (OWIC) stated that this will “scale up the UK’s offshore wind supply chain faster in the face of unprecedented international competition for investment in new manufacturing facilities”.
Richard Sandford, co-chair of the Offshore Wind Industry Council, said: “The measures announced by the government today will help us to scale up the UK’s offshore wind supply chain faster in the face of unprecedented international competition for investment in new manufacturing facilities. This will not only enable us to supply projects in UK waters but also to export our world-class offshore wind products and services globally, where they are already in great demand.
“The UK already has many strengths in areas such as designing and manufacturing turbine blades and cables for offshore wind farms, as well as providing services such as planning and designing new projects, assembling turbines and providing crew transfer vessels. Overall, the offshore wind supply chain could be worth over £92 billion to the UK’s economy by 2040.
“OWIC is already working with RenewableUK and the wider sector to develop an Industrial Growth Plan to identify which parts of the supply chain we should focus on, with an emphasis on areas where we already have a strong competitive advantage. The government’s commitment to a Green Industries Growth Accelerator can help us to ensure that the UK retains its position as a global leader in cutting-edge offshore wind technology.”
Sandford concluded: “Growing Britain’s offshore wind industry will enable us to create tens of thousands of new jobs and strengthen our energy security, as this technology becomes the backbone of our future clean energy system.”
UK’s Battery Strategy to be published this week
Another key development is confirmation that the government intends to release its highly anticipated Battery Strategy this week. This will outline the government’s activity to achieve a “globally competitive battery supply chain” in the UK by 2030 that “supports economic prosperity and the net zero transition”.
The Strategy is expected to include a range of different case uses for batteries such as in energy storage and as part of the EV supply chain. In doing so, this could bolster the UK’s efforts to become a greater opportunity for foreign investment.