UK's Clean Energy Industrial Plan: Doubling Investment to £30 Billion and Transforming the National Grid

The UK government unveiled plans on 23 June to double current investment levels in clean energy industries to over £30 billion per year by 2035. The government hopes that the 10-year Clean Energy Industries Sector Plan, developed in collaboration with industry, trade unions and workers, will create thousands of new jobs.

The boost to investment comes hot on the heels of the programme of investment in homegrown energy announced in last month’s Spending Review, including funding to build Sizewell C nuclear power station and £9.4 billion allocated to carbon capture industries. This is in addition to the £40 billion of private investment in clean energy announced in the past year.

Highlights of the plan include:

• £700 million allocated to Great British Energy (GBE) to invest in domestic manufacturing facilities for clean power technologies, including floating offshore platforms, electric cables and hydrogen infrastructure. This builds on the £300 million initial investment by GBE in offshore wind supply chains;
• The CfD Clean Industry Bonus, the financial reward scheme for offshore wind developers investing in homegrown, cleaner supply chains, may be expanded to other sectors including hydrogen and onshore wind;
• The British Business Bank’s £4 billion Industrial Strategy Growth Capital will support climate tech companies seeking to scale up by leveraging greater venture capital fund investments, enhanced direct investment programmes and a greater focus on large strategic investments in deep tech sectors;
• The National Wealth Fund will commit at least £5.8 billion over this Parliament to ports, hydrogen, carbon capture, gigafactories, and green steel;
• Investment of over £2.5 billion over five years in R&D for fusion energy, including progressing the Spherical Tokamak for Energy Product (STEP) programme which aims to deliver a prototype fusion power plant in the East Midlands by 2040;
• Establishing the UK’s first regional hydrogen network from 2031 which will facilitate the production, storage and transportation of low-carbon hydrogen to support its use in key sectors locally, with £500 million in Government support;
• Lucy Yu, CEO and founder of the Centre for Net Zero, was named the Government’s Clean Energy AI Champion, helping to drive the adoption of AI across the UK’s clean energy sector.

Will the National Grid receive investment?

Ofgem also announced an ambitious funding programme on 1 July, dedicating £8.9 billion to power the biggest expansion of the electricity grid since the 1960s. According to Ofgem, the funding marks the first step in an estimated £80 billion investment programme which will boost grid capacity and therefore shelter households from dramatic fluctuations in energy bills caused by volatile international gas markets.

The funding will allow for 80 transmission projects and associated works to be completed within five years. Limited grid capacity and creaky infrastructure has been a huge barrier to the adoption of renewable energy technology – Ofgem states that the funding will allow up to 126 GW of clean power generation to be connected to the grid by 2030.

Another £15 billion will go towards the continued safe operation of Great Britain’s gas transmission and distribution networks.

How can we help?

The Government’s plans promise an exciting opportunity for stakeholders across industry to expand investment in and uptake of clean energy.

At Bird & Bird we have a wealth of experiencing advising generators, developers, corporate customers, landlords and investors across the life cycle of renewable energy projects. Please do not hesitate to get in touch.