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UK investors and wealth managers increasing their allocation to renewables

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Research from Downing LLP (Downing) has revealed a dramatic increase in focus on renewables from UK pension funds, other institutional investors and wealth managers.

Downing offers both institutional and retail investors the opportunity to invest in renewable energy and other infrastructure in the UK and northern Europe.

Its survey of 100 UK professional investors, who collectively manage around £118 billion in assets under management, reveals 80% increased their allocation to renewables over the past 12 months with 26% making a dramatic increase while 54% made a slight increase.

Nearly all (97%) of the respondents say they will increase their allocation to renewable energy in the next year.

Henrik Dahlstrom, Investment Director at Downing Renewables & Infrastructure Trust, said: “As the renewables sector develops, it increasingly illustrates several features that investors find very attractive, especially in the current environment of low yields and rising inflation – both issues renewables can help investors to address.”

Downing’s research found all renewable energy sectors are expected to attract more investment, and when asked to select their top five reasons for this, three-quarters (74%) of professional investors surveyed cite the asset class’s recent strong performance, and the de-risking potential in volatile markets (69%).

Other attractions of investing in renewable energy included the diversification potential (67%); improved regulatory environment for investing in renewables (67%); a growing focus on decarbonisation from pension funds and wealth managers (62%); improved liquidity (60%); a good hedge against inflation (55%); and a greater pressure to invest in renewables (46%).

The sectors most likely to attract increased investment are as follows:

  Increase dramatically Increase slightly Stay the same Decrease
Wind 39% 40% 21% 0%
Solar 38% 18% 41% 3%
Hydro 41% 44% 13% 2%
Biomass 38% 46% 9% 7%
Tidal and wave 29% 47% 23% 1%

Dahlstrom added: “Renewable energy is central to UK institutional investors and wealth managers as they set responsible and ESG investment strategies. We have long capitalised on the diversification benefits of investing in renewable energy and as inflation bites and market volatility continues, allocating to the asset class will become even more important.

“It is important that investors can find genuine investment opportunities that help them meet their ESG credentials. Our investment trust DORE, for example, is one of the few funds classified as an Article 9 fund under the EU’s Sustainable Finance Disclosure Requirement (SFDR), which means we make impactful investments and have specific Sustainable Investment Objectives.”

Over the last 12 years, Downing has invested in more than 175 core renewables projects across Europe.

These renewable energy investing projects have stable, predictable, long-term cashflows and are often wholly or partly linked to inflation.

UK biomass sector receives government funding worth £26 million

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Innovative biomass projects across the UK can now bid for a share of £26 million as the government ramps up plans to boost the use of materials such as grasses, hemp and seaweed to help the UK reach net zero.

Biomass refers to sustainably derived plant material that could be used as fuel to produce energy for heating and powering homes and businesses. Biomass, which is also backed by the independent Climate Change Committee, will be an important part of the renewable energy mix, vital for the UK to reach net zero emissions by 2050.

The chosen projects will drive biomass productivity in the UK through the breeding, planting, cultivating and harvesting of organic matter; from water-based materials such as algae, to whole trees through sustainable forestry operations.

The funding, available through Phase 2 of the government’s Biomass Feedstocks Innovation Programme, will see projects previously supported under Phase 1 with government funding to design new ways of boosting biomass production in the first round of the scheme, able to apply for further support to bring their projects to life.

Each project will be able to bid for up to £4 million in funding, or up to £5 million for bids from the multi-site demonstrator projects that will showcase new biomass feedstock production projects in multiple locations across the UK.

25 projects located across the country, from start-ups and family-run businesses to research institutes and universities, have already received a share of £4 million under Phase 1 of the programme. Under Phase 2, the projects will be developed from the design stage into full demonstration projects, showcasing new methods to grow biomass materials, which can be used to produce low-carbon energy.

The Biomass Feedstocks Innovation programme, part of the government’s £1 billion Net Zero Innovation Portfolio, is designed to increase the production of sustainable UK biomass feedstocks, and accelerate the commercialisation of the innovative biomass production technologies supported through the programme.

The projects supported under Phase 1 included a range of biomass production ideas, such as producing algae using wastewater from breweries and dairy industries, farming seaweed off the North Yorkshire coast, and increasing the planting and harvesting capacity for willow.

With this new £26 million government funding announced today, the Biomass Feedstocks Innovation Programme will lead to a greater supply of organic materials from domestic sources rather than using imported matter, with the successful projects supporting rural economies across the UK, providing jobs and encouraging private investment, while helping the UK on the path to net zero.

Glasgow hydrogen storage project gets green light

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A ‘first-of-a-kind’ hydrogen storage project near Glasgow has been backed by nearly £10 million in UK government funding, which it says will help create high-skilled jobs and drive progress towards decarbonising the UK transport sector.

The £9.4 million cash boost will see the Whitelee green hydrogen project develop the UK’s largest electrolyser, a system which converts water into hydrogen gas as a way to store energy. It will be located alongside ScottishPower’s Whitelee Windfarm, the largest of its kind in the UK, and will produce and store hydrogen to supply local transport providers with zero-carbon fuel.

Developed by ITM Power and BOC, in conjunction with ScottishPower’s Hydrogen division, the state-of-the-art facility will be able to produce enough green hydrogen per day – 2.5 to 4 tonnes – that, once stored, could provide the equivalent of enough zero-carbon fuel for 225 buses travelling to and from Glasgow and Edinburgh each day.

The announcement follows COP26, the global climate change summit held in Glasgow earlier this month, and supports the city’s ambition to become net zero by 2030. The Whitelee project will be the UK’s largest power-to hydrogen energy storage project, using an electrolyser powered by the renewable energy from the Whitelee Windfarm. This will create green hydrogen, a zero-carbon gas that is produced via electrolysis (splitting) of water, using renewable power.

Energy and Climate Change Minister Greg Hands said: “This first-of-a-kind hydrogen facility will put Scotland at the forefront of plans to make the UK a world-leading hydrogen economy, bringing green jobs to Glasgow, while also helping to decarbonise local transport – all immediately following the historic COP26 talks. Projects like these will be vital as we shift to a green electricity grid, helping us get the full benefit from our world-class renewables, supporting the UK as we work to eliminate the UK’s contribution to climate change.”

Secretary of State for Scotland Alister Jack said: “This tremendous investment at Whitelee Windfarm illustrates how serious the UK government is about supporting projects that will see us achieve net zero by 2050. In the weeks following COP26 in Glasgow, it has never been more important to champion projects like this one, which embraces new hydrogen technology while creating highly-skilled jobs. We can, and will, achieve a greener, cleaner future.”

Graham Cooley, CEO of ITM Power Ltd, said: ‘We are very pleased to be a partner in Green Hydrogen for Scotland and this first project, Green Hydrogen for Glasgow, will see the deployment of the largest electrolyser to date in the UK.”

Jim Mercer, Business President, BOC UK & Ireland said: “The Green Hydrogen for Glasgow project is both innovative and exciting. It will help to shape the future of energy storage and demonstrate the value of hydrogen to Scotland’s growing low-carbon economy. This project will accelerate development across multiple disciplines – from production and storage, to transportation and end use.”

Barry Carruthers, ScottishPower Hydrogen Director, said: “This blend of renewable electricity generation and green hydrogen production promises to highlight the multiple ways in which society can decarbonise by using these technologies here and now. Building on the government’s plans to make the UK a world-leading hydrogen economy and ensure the sector has the skilled workforce it needs, an additional £2.25 million in new government funding will support the development of hydrogen skills and standards in the UK.

“This funding, under the Net Zero Innovation Portfolio, will see the British Standards Institution (BSI) develop technical standards for hydrogen products, and a consortium comprising Energy and Utility Skills and the Institution of Gas Engineers and Managers, will establish new standards and training specifications to facilitate the training of hydrogen gas installers.”

£60m Swansea Bay City Region low carbon initiative approved

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The UK and Welsh Governments have approved the £58.7 million Swansea Bay City Deal’s Supporting Innovation and Low Carbon Growth programme.

The programme’s aim is to help establish the Swansea Bay City Region as a leader in low carbon growth and the green economy.

Close collaboration with industry, government and academia is key to its success by delivering low carbon, sustainable and inclusive economic growth through creating the right environment to develop new technologies from the research stage, through to production, to support job creation in the region.

Led by Neath Port Talbot Council with Swansea University and University of South Wales as delivery partners, the programme aims to support the creation and safeguarding of 1,320 jobs in the green economy through seven interlinked projects that will enhance infrastructure, research and development and commercialisation:

  • Bay Technology Centre – energy positive building providing high quality, flexible office and laboratory space
  • South Wales Industrial Transition from Carbon Hub – purpose-built facility and specialist equipment to decarbonise the steel and metal industry and supply chain
  • Advanced manufacturing production facility – providing production units with open access to shared specialist equipment to support start-up companies and local business growth in the innovation and manufacturing sectors linked to energy and renewables
  • Property development fund – gap funding for bespoke and speculative commercial buildings in the Port Talbot Waterfront Enterprise Zone area
  • Hydrogen stimulus project – enabling a demonstrator to prove commercial viability of carbon-free hydrogen supply to fuel hydrogen vehicles
  • Air quality monitoring project – test bed for new technology to establish a greater understanding of air quality and levels of pollution to inform local action planning
  • Low emission vehicle charging infrastructure – developing a strategy to decarbonise journeys in the Swansea Bay City Region and develop a pilot in the Valleys area of Neath Port Talbot

The programme can commence drawing down on a £47.7 million City Deal investment from both governments to complement the £5.5 million already committed from the European Regional Development Fund through the Welsh Government and Neath Port Talbot Council and a further £5.5 million of private sector funding. The programme also aims to attract a further estimated £40 million of additional funds from the private and public sectors over the next 5 years.

The funding will provide solutions to decarbonise commercial and industrial buildings, transport and industrial processes that will support the policies and strategies laid out by the Welsh and UK governments.

Cllr Edward Latham, Neath Port Talbot Council Leader, said: “The programme will focus on the Harbourside and Baglan Energy Park area of Port Talbot which complements Neath Port Talbot Council’s Decarbonisation and Renewable Energy Strategy (DARE), with wider regional and national impact through the development of products, services and a skilled workforce”.

James Davies, Industry Wales, said: “The programme of projects aims to transform industry and support the green industrial revolution. The focus on Research, Development and Innovation into energy and advanced materials fits well with the government’s agenda to decarbonise and with other initiatives such as the South Wales Industrial Cluster (SWIC). Industry Wales strongly advocates this ambitious and progressive programme of work that can help bring back and sustain green manufacturing in South West Wales through support for Start-ups, Small to Medium Enterprises and attract inward investment from outside the region.”

Welsh Government Economy Minister, Vaughan Gething said: “As we emerge from the Covid crisis, we are determined to move Wales forward with an economic recovery designed to tackle the climate emergency head on. We will help businesses transition to a low carbon future that will deliver with a stronger, fairer and greener economy.”

The Swansea Bay City Deal is an investment of up to £1.3 billion in a portfolio of nine major programmes and projects across the Swansea Bay City Region, which are together worth over £1.8 billion and 9,000 jobs to the region’s economy in coming years.

Funded by the UK Government, the Welsh Government, the public sector and the private sector, the City Deal is being led by Carmarthenshire Council, Neath Port Talbot Council, Pembrokeshire Council and Swansea Council, in partnership with Swansea University, the University of Wales Trinity Saint David, Swansea Bay University Health Board and Hywel Dda University Health Board.

The £8.5m Bay Technology Centre has been awarded £3.69m of EU funds from the European Regional Development Fund (ERDF) through the Welsh Government.

The project involves creating a 2,500m2 hybrid building. This will provide a range of flexible office space to support both start up and business growth companies, with a focus on the innovation and R&D sectors.

This is one of a number of projects within the Swansea Bay City Deal supported by the European Regional Development Fund including £14.9m EU funds awarded to four projects assisting the further development of the marine energy industry in Wales through the Pembroke Dock Marine programme:

o             The Marine Energy Engineering Centre of Excellence (MEECE)

o             Pembrokeshire Demonstration Zone – Consent and Development

o             Pembroke Dock Building Adaptations

o             Pembroke Dock Marine Access Infrastructure.

UK Government white paper sets out plans for clean energy system

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The UK government has set out what it calls an ‘ambitious plan’ to clean up the country’s energy system, support up to 220,000 jobs, and keep bills affordable as the transition to net zero by 2050 continues.

The Energy White Paper sets out specific steps the government will take over the next decade to cut emissions from industry, transport, and buildings by 230 million metric tonnes – equivalent to taking 7.5 million petrol cars off the road permanently – while supporting hundreds of thousands of new green jobs.

The government says it will put affordability at the heart of the UK’s decisive shift away from fossil fuels by boosting competition in the energy retail market to tackle the ‘loyalty penalty’ – longstanding customers who pay more than new ones – and by providing at least £6.7 billion in support to the fuel poor and most vulnerable over the next 6 years.

Alongside the Energy White Paper, the government has also confirmed that it is to enter negotiations with EDF in relation to the Sizewell C project in Suffolk as it considers options to enable investment in at least one nuclear power station by the end of this Parliament. If the project proceeds, it could create thousands of new jobs during construction and operation.

This is the next step in considering the Sizewell C project, and negotiations will be subject to reaching a value for money deal and all other relevant approvals, before any final decision is taken on whether to proceed. The government says the successful conclusion of these negotiations will be subject to thorough scrutiny and needs to satisfy the its legal, regulatory and national security requirements.

Core parts of the Energy White Paper include:

  1. Supporting up to 220,000 jobs in the next 10 years. This includes long-term jobs in major infrastructure projects for power generation, carbon capture storage and hydrogen, as well as a major programme of retrofitting homes for improved energy efficiency and clean heat.
  2. Transforming the UK’s energy system from one that was historically based on fossil fuels to one that is fit for a net zero economy, changing how we heat our homes and travel, doubling our electricity use, and harnessing renewable energy supplies.
  3. Keeping bills affordable for consumers by making the energy retail market truly competitive. This will include offering people a simple method of switching to a cheaper energy tariff, and testing automatically switching consumers to fairer deals to tackle “loyalty penalties”.
  4. Generating emission-free electricity by 2050 with a trajectory that will see us have overwhelmingly decarbonised power in the 2030s. Low carbon electricity will be a key enabler of our transition to a net zero economy with demand expected to double due to transport and low carbon heat.
  5. Establishing a UK Emissions Trading Scheme (UK ETS) from 1 January 2021 to replace the current EU ETS at the end of the Transition Period. It increases ambition on reducing emissions, and provides continuation of emissions trading for UK businesses and certainty on how they operate.
  6. Continuing to explore a range of financing options for new nuclear with developers including the Regulated Asset Base (RAB) funding model, which could help secure private investment and cost consumers less in the long run. Given the scale of the financing challenge, we will also consider the potential role of government finance during construction, provided there is clear value for money for consumers and taxpayers.
  7. Delivering ambitious electricity commitments through our world-beating commitment to deliver 40GW of offshore wind by 2030, including 1GW of floating wind, enough to power every home in the country – while attracting new offshore wind manufacturers to the UK.
  8. Investing £1 billion in state-of-the-art carbon capture storage in four industrial clusters by 2030 – sucking carbon out of industrial processes to stop emissions escaping to the air. Four low carbon clusters will be set up by 2030, and at least one fully net zero cluster by 2040, stimulating the market to attract new investors and manufacturers to reinvigorate our industrial heartlands.
  9. Kick-starting the hydrogen economy by working with industry to aim for 5GW of production by 2030, backed up by a new £240m net zero Hydrogen Fund for low carbon hydrogen production.
  10. Investing £1.3 billion to accelerate the rollout of charge points for electric vehicles in homes, streets and on motorways as well as up to £1 billion to support the electrification of cars, including for the mass-production of the batteries needed for electric vehicles. The rollout has levelling up at its heart, and will support economic growth across the UK – including in our strong manufacturing bases in the Midlands and the North East – while supporting the 169,000 jobs in our world-leading automotive sector.
  11. Supporting the lowest paid with their bills through a £6.7 billion package of measures that could save families in old inefficient homes up to £400. This includes extending the Warm Home Discount Scheme to 2026 to cover an extra three quarters of a million households and giving eligible households £150 off their electricity bills each winter. The £2 billion Green Homes Grant announced by the Chancellor has been extended for a further year in the Ten Point Plan.
  12. Moving away from fossil fuel boilers, helping to make people’s homes warmer, whilst keeping bills low. By the mid-2030s we expect all newly installed heating systems to be low carbon or to be appliances that we are confident can be converted to a clean fuel supply.
  13. Supporting North Sea oil and gas transition for the people and communities most affected by the move away from oil and gas production, ensuring that the expertise of the oil and gas sector be drawn on in developing carbon capture and storage and hydrogen production to provide new green jobs.

Plans to create jobs through the Energy White Paper build on the £280 billion support package that has been provided as part of the government’s Plan for Jobs to safeguard jobs in every region and nation of the UK, with support now extended until March 2021.

Kick-starting the process of ensuring fairness and affordability for bill-payers will be a series of consultations in spring 2021 to create the framework to introduce opt-in switching, consider reforms to the current roll-over tariff arrangements, and a call for evidence to begin a strategic dialogue between government, consumers and industry on affordability and fairness.

The UK ETS will promote cost-effective decarbonisation, allowing businesses to cut carbon where it is cheapest to do so, promoting innovation and growth for UK businesses. It will be the world’s first net zero carbon cap and trade market, and a step towards achieving the UK’s target for net zero carbon emissions by 2050.

The government says the scheme is more ambitious than the EU system it replaces – from day one the cap on emissions allowed within the system will be reduced by 5%, and the government says it will consult in due course on how to align with net zero. This, it says, gives industry the certainty it needs to invest in low carbon technologies.

EDF doubles down on energy storage with PowerUp investment

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Cleantech sector startup PowerUp has completed a new round of funding worth €5m from Supernova Invest, business angels, and the EDF Group.

Founded in 2017, France-based PowerUp has developed a breakthrough technology based on more than ten years of research by CEA-LITEN (innovation laboratory for new energy technologies), as well as on a total of 7 patents.

Its solutions aim to optimise the performance and lifetime of lithium- ion batteries in order to enhance the reliability and competitiveness of future energy storage systems.

EDF Pulse Croissance’s investment in PowerUp is part of the EDF Group’s Electricity Storage Plan, which targets the installation of 10 GW of new storage capacity by 2035.

The investment in PowerUp reaffirms EDF’s desire to be a major player in the energy transition and in low-carbon generation.

This new display of confidence is aimed at enabling it to continue its growth in France and Europe. It also marks the start of a new era: PowerUp says it’s is now ready to tackle the energy storage systems sector, a new international market for the firm.

Carmen Munoz, Director of downstream activities, EDF R&D, said: “EDF R&D’s expertise in batteries, which spans more than 20 years, coupled with PowerUp’s innovative technology and market understanding, will ensure further progress towards the development of a more effective solution, while also boosting competitiveness.”

Josselin Priour, CEO and Co-founder of PowerUp, added: “With this fundraising round, PowerUp is entering a new era. In 2021, we will be embarking on a phase of increased production, and this capital will support our growth. In addition to securing our leadership position in France, we aim to grow our business in Europe and North America. Behind this growth lies a real need: more than ever before, we need to increase the lifetime of our batteries to ensure greener energy production.”

UK businesses pledge £3bn to back British hydrogen

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The UK could see more than £3 billion invested in the emerging hydrogen sector as more businesses step forward to pledge funding – but only if PM Boris Johnson backs the low-carbon fuel.

Earlier this year, cross-industry group Hydrogen Strategy Now said its members were ready to pump £1.5bn into the UK hydrogen economy. The group revealed that figure has now doubled to £3bn as more businesses line up plans for hydrogen projects across the UK.

Now bosses from leading businesses have come together to call on Mr Johnson to pave the way for a British hydrogen economy in his long-awaited energy strategy as they vowed to heavily invest in hydrogen technologies.

Members of Hydrogen Strategy Now, which combined employs around 100,000 people and has a value of £100bn in the UK, said their shovel-ready projects would create thousands of jobs across the country, helping to kick start a post-Covid green recovery.

The group has welcomed the recent appointment of Andrew Griffith, MP for Arundel and the South Downs, as the Government’s Net Zero Business Tsar, as a positive step in the right direction from Parliament.

But its members have warned that unless the sector receives load and clear backing from the Government, the UK risks being left behind the rest of the globe.

Attracting cross-party support, the Hydrogen Strategy Now collective wants to see a clear, strategic plan to help unlock significant private funding in hydrogen technologies and manufacturing across the country, driving growth and generating hundreds of thousands of green jobs.

They believe a UK-wide hydrogen economy will:

●      Create and sustain hundreds of thousands of high-skilled, green jobs, in all parts of the country and in alignment with the Government’s ‘levelling-up’ agenda

●      Drive progress to Net Zero and improve air quality in towns and cities

●      Secure private investment into the UK, and unlock export opportunities for our products and skills

●      Increase our energy security by making fuller use of the UK’s natural resources

A letter from the group to Chancellor Rishi Sunak earlier this year stated: “As you look to design a post-COVID recovery, we encourage you to focus on creating high-skilled, green jobs, in sectors that will be critical to the future economy, such as low-carbon energy, transport and heavy industry.

“These measures would be wholly complimentary to the Government’s levelling-up agenda and long-term decarbonisation goals. For example, the Committee for Climate Change has made it clear that the UK will not meet its Net Zero targets without significant investment in the hydrogen economy.

“The global hydrogen economy is estimated to be worth $2.5 trillion by 2050, supporting 30 million jobs. Other nations, such as Australia, Japan, South Korea, Canada, and China have already set ambitious strategies for growing their hydrogen economies. Just last week, Germany joined this list with their own €9 billion hydrogen strategy. The European Commission is also creating an EU hydrogen strategy, which includes plans for multi-billion euro investment in hydrogen projects, and schemes to boost sales of hydrogen electric vehicles.

“It is now clear that hydrogen is going to play an essential role in the world’s future, low-carbon economy. The increasingly bold steps being taken by other nations underlines the need for the UK to bring forward urgent measures to establish a hydrogen strategy and unlock investment and innovation. We should not risk falling behind other nations in developing our hydrogen industry.”

UK government pumps £350 million into ‘green recovery’

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UK industry will receive around £350 million to cut down carbon emissions under new plans to step up efforts to tackle climate change.

The multimillion pound investment package will build on progress towards the UK’s target to reach net zero by 2050, by helping businesses to decarbonise across the heavy industry, construction, space and transport sectors and to secure the UK’s place at the forefront of green innovation.

The investment came ahead of the PM launching the first meeting of the Jet Zero Council, which will bring together government, representatives from the environmental sector and the aviation and aerospace industry to tackle aviation emissions in line with the government’s ambition to achieve the first ever zero emission long haul passenger plane.

The projects set to receive funding will work on developing new technologies that could help companies switch to more energy-efficient means of production, use data more effectively to tackle the impacts of climate change, and help support the creation of new green jobs by driving innovation and growth in UK industries.

The package includes:

  • £139 million to cut emissions in heavy industry by supporting the transition from natural gas to clean hydrogen power, and scaling up carbon capture and storage (CCS) technology which can stop over 90% of emissions being released from industrial plants into the air by storing carbon permanently underground
  • £149 million to drive the use of innovative materials in heavy industry; the 13 initial projects will include proposals to reuse waste ash in the glass and ceramics industry, and the development of recyclable steel
  • £26 million to support advanced new building techniques in order to reduce build costs and carbon emissions in the construction industry
  • A £10 million boost for state of the art construction tech which will go towards 19 projects focused on improving productivity and building quality, for example, re-usable roofs and walls and “digital clones” of buildings that analyse data in real time
  • Launching a New National Space Innovation Programme backed by £15 million initial funding from the UK Space Agency, which will see the first £10million go towards projects that will monitor climate change across the globe, which could protect local areas from the impacts of extreme weather by identifying changes in the environment
  • Opening up bids for a further £10million for R&D in the automotive sector, to help companies take cutting edge ideas from prototype to market, including more efficient electric motors or more powerful batteries

Chaired by the Transport and Business Secretaries, the first Jet Zero council meeting discussed how to decarbonise the aviation sector while supporting its growth and strengthening the UK’s position as a world leader in the sector.

The members will look at how to work across their sectors to achieve these goals, including through brand new aircraft and engine technologies. These could include using new synthetic and sustainable aviation fuels as a clean substitute for fossil jet fuel, and eventually the development of electric planes.

The government says that over the past decade, the UK has cut carbon emissions by more than any similar developed country. In 2019, UK emissions were 42% lower than in 1990.

Prime Minister Boris Johnson said: “We’ve made great strides towards our net zero target over the last year, but it’s more important than ever that we keep up the pace of change to fuel a green, sustainable recovery as we rebuild from the pandemic.

“The UK now has a huge opportunity to cement its place at the vanguard of green innovation, setting an example worldwide while growing the economy and creating new jobs.

“That’s why we’re backing cutting edge research to cut costs and carbon across our great British industries, and even paving the way for the first ever zero emission long haul passenger flight – so that our green ambitions remain sky high as we build back better for both our people and our planet.”

Business and Energy Secretary, Alok Sharma, said: “Climate change is among the greatest challenges of our age. To tackle it we need to unleash innovation in businesses across the country.

“This funding will reduce emissions, create green collar jobs and fuel a strong, clean economic recovery – all essential to achieving net zero emissions by 2050.”

Image by Steppinstars from Pixabay 

Government pledges £80 million to help cut emissions from homes and industry

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Energy Minister Kwasi Kwarteng has announced nearly £80 million of government investment to help cut carbon emissions from homes and energy intensive businesses.

The funding will be invested in a wide range of programmes, including pioneering heat network trials and an innovative new programme to bring down the cost of retrofitting residential properties with the latest energy efficiency technologies.

Funds announced include:

  • £30 million towards the first phase of the Industrial Energy Transformation Fund (IETF), which supports energy intensive manufacturers, like car factories and steel plants, to cut their carbon footprint
  • £25 million for heat networks, which reduce carbon and cut heating bills for customers, including one which will harness geothermal water sitting in disused mines to heat 1,250 homes
  • £24 million for innovative projects to help develop energy efficient homes by installing green tech and insulation in houses

Energy Minister Kwasi Kwarteng said: “We want to invest now to ensure we continue to propel the UK towards a stronger, greener future. This new £80 million investment will help to reduce emissions across our economy, which will save people money on energy bills and protect jobs in heavy industry.”

Phase 1 of the IETF is worth an initial £30 million in support of the manufacturing sector. The fund allows companies with high energy use to apply for grants to install technology that reduces their energy bills and cuts carbon emissions.

Worth an eventual £289 million in England, Wales and Northern Ireland up until 2024, the IETF also seeks to help bring down the costs of technologies that reduce energy consumption and emissions in heavy industrial processes.

£25 million will go towards heat networks, including one in Gateshead, which will harness hot geothermal water sitting in disused mines to heat 1,250 homes. With thousands of redundant mine shafts criss-crossing the country, experts say that if the mine shaft technology proves successful and economically viable, it could be scaled up to power around 6 million homes around Britain.

The final £24 million green homes investment will comprise of:

  • £7.7 million to install green technology and insulation in over 300 council houses, to bring down the cost of retrofitting homes – with pilot projects in Cornwall, Nottingham, and Sutton
  • £14.6 million to pilot the roll-out of innovative heat pumps to 750 homes in the South East of Scotland, the South East of England and Newcastle
  • £1.8 million to support the development of innovative green home finance products by lenders.

The announcements today form part of the wider efforts to ensure the UK meets its legally binding target to reach net zero emissions by 2050.

‘Superfunds’ should drive Britain’s green future, says think tank

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New British pension ‘superfunds’ should be created to invest in infrastructure for country’s green recovery.

That’s the view of the Social Market Foundation, which also says that ministers preparing for a ‘green recovery’ from coronavirus should be ready to take more risks and spend public money up front to support innovative ‘pathfinder’ infrastructure projects and new renewable energy markets in their early stages.

The cross-party think tank says building new roads, power sources and communications networks could create much-needed jobs and make Britain’s economy more productive and resilient, with priority given to “shovel-ready” projects that support domestic supply chains and employment.

In a new report, the SMF identified pension reform as the key to financing and funding new infrastructure.

Ministers should encourage UK pension funds to merge into fewer, larger funds able to invest large sums in big long-term projects, the SMF said, citing Australia and Canada, where such funds have successfully delivered major infrastructure investments.

The government launched consultations on pension consolidation and the creation of “superfunds” in 2018 and 2019, but despite Boris Johnson’s previous support for the plans, ministers have yet to announce decisions.

The SMF said that the need to support an economic recovery with infrastructure projects meant “urgent action” is now needed on pension reform.

Investment rules should also be reformed to allow the new funds to pay the management fees often involved in running big infrastructure projects, the SMF said in a report setting out how to get more private money into big UK projects.

The SMF report was sponsored by Tidal Power Limited, which is pursuing plans to build a fleet of new tidal lagoons to generate power for the UK grid.

The report draws on a roundtable discussion among parliamentarians, former officials, investors and academics. Based on that event, the SMF concluded that politicians must offer much greater certainty and financial clarity to investors about the profits they can make from funding infrastructure projects.

Such profits should be energetically explained to voters as a necessary condition of private financing of public infrastructure, the SMF said. Political pressure to eliminate profits from private finance deals helps deter investment in infrastructure, the report found.

Politicians’ determination to minimise taxpayer costs by asking the market to fund new projects is also limiting Britain’s ability to build new infrastructure projects, the SMF said.

To support the economic recovery, government should be prepared to take more risks by spending directly to support new “pathfinder” projects that would then be replicated by private investors if they succeed.

The SMF also recommended:

  • A cross-party commission with an independent chair should be created to establish a “strategic vision” of the UK’s infrastructure needs over at least the next decade. Parties taking part in the commission should give public commitments to ensure financial and regulatory support for the projects identified in the vision.
  • An urgent review of planning regulations should be undertaken with the aim of reducing planning risk for investors. This could include narrowing the scope for Judicial Review of projects identified as top priorities by the new cross-party commission.

Richard Hyde, Senior Researcher at the SMF said: “The best way to support the infrastructure the country urgently needs in the long-run is to make better use of the billions of pounds held in pension funds that could be profitably invested in helping Britain on its way to a green recovery. Ministers should move quickly to encourage the creation of pension superfunds like those in Australia and Canada.

“In the short-term, ministers looking to get infrastructure projects up and running and providing jobs should be prepared to spend directly to support pathfinders that can prove to investors that it is safe to invest in similar projects. That means taxpayers bearing more of the risk, but the long-term rewards justify that risk.” 

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