UK underlines commitment to energy transition technologies

Nick McDonald of Pinsent Masons was commenting following the publication of the government’s clean energy industries sector plan (90 pages / 9.5 MB), which was published alongside its new 10-year industrial strategy (160 pages / 15.6 MB).

The plan identifies a number of ‘frontier’ industries that are key to the UK’s clean energy transition: onshore, offshore and floating wind; nuclear fission; fusion energy; carbon capture utilisation and storage (CCUS) including greenhouse gas removals (GGRs); hydrogen; and heat pumps. Within the plan, the government says it will “at least” double the current investment in the UK’s clean energy industries to over £30 billion per year by 2035 as part of its renewed commitment to the sector.

Read more on the UK industrial strategy

• UK automotive industry prioritised for industrial strategy support
• Procurement reform plans constrained by international obligations
• UK defence drive will have knock-on benefits for the economy, says expert
• UK aims to be ‘top three’ tech hub within a decade

This commitment to investment in energy comes as the government’s freshly unveiled industrial strategy also seeks to slash energy bills and boost the UK’s energy sector. Under a new British industrial competitiveness scheme, the government says its proposed measures will reduce electricity costs by 2027 by up to £40 per megawatt hour for more than 7,000 UK businesses in electricity-intensive manufacturing sectors including automotive, aerospace and chemicals.

Commenting on these developments, McDonald said: "It's a positive boost to see CCUS and hydrogen identified as frontier industries, recognising the UK's ability to forge ahead with both, and the benefits they bring in terms of the energy system, decarbonisation and high-quality jobs,” he said. 

McDonald said the plan was another welcome move for both the CCUS and the low carbon hydrogen sectors following recent funding announcements. “The sector plan recognises that certainty is the key for these industries to grow and thrive, and commits to providing that,” he said. “It sets out the government's stall clearly on that by indicating the next funding rounds and timings for hydrogen production, transport and storage, and power, and for upcoming consultations on non-pipeline transport and greenhouse gas removals in CCUS, amongst other initiatives.”

He added that both the sector plan and its prominence in the government’s wider industrial strategy signalled “the government's very strong commitment to the complementary CCUS and hydrogen industries."

As part of its action plan, the government says it will provide an additional £9.4 billion of funding to CCUS projects. The funding, which was announced as part of the government’s most recent comprehensive spending review, will finance the Acorn project in Scotland, the Viking project in Humberside, and the expansion of two previously funded CCUS clusters across the UK.

As well as welcoming industry-led initiatives to foster “home-grown” clean energy, the government said it is working alongside EU partners to agree a regulatory framework for enabling cross-border carbon dioxide transport and storage networks. It is also consulting on amendments to regulations governing access to carbon dioxide transport and storage infrastructure and bringing GGR technologies into the UK emissions trading scheme (ETS) and will publish a consultation on non-pipeline transport (NPT), which includes the transportation of carbon dioxide via road, rail and ship, later this year.  

As well as doubling annual investment in the clean energy sector by 2035, the plan outlines the government’s intention to become the most attractive destination in Europe for clean energy investment; to grow exports in all its ‘frontier’ clean energy industries; drive higher domestic commercialisation of evolving clean energy technologies; secure more resilient and robust supply chains; and create thousands of high-skilled, well-paid jobs across the country. 

Gillian Harrington, an expert in employment law at Pinsent Masons, said the emphasis on reskilling and enhancing the transferability of the existing UK energy workforce was in keeping with the government’s approach to boost the UK workforce. “The focus on enhancing employment standards alongside job growth is not surprising given the government’s wider employment policy objectives,” she said. “This is most obviously seen in its Employment Rights Bill which is intended to reset the labour market in favour of higher standards of worker protection and partnerships between industry and trade unions.”

The government’s industrial strategy also recognises the importance of diversity across the engineering, construction and energy sectors. According to recent research by Engineering UK, women are the most underrepresented group in engineering and technology roles, making up just 16.9% of the workforce.

Harrington said the strategy signalled the government’s commitment to improving workforce diversity as part of the country’s energy transition. “The government’s industrial strategy makes several references to the need to grow engineering talent and expressly recognises the importance of diversity programmes in delivering the workforce needs of the energy sector,” she said. “The underrepresentation of women in engineering globally shows the talent pool that diversity initiatives may be able to tap into to attract new recruits”.

The government has also identified apprenticeships as a key tool to generate energy sector workforce growth. It announced an apprentice initiative in April to train up a 'clean power army' of apprentice engineers, welders, and technicians.