On 30 March, 2023, the UK Government released its Powering up Britain policy paper, a blueprint outlining the government's plans for the future of energy in the UK.
Key Powering up Britain takeaways for the manufacturing industry:
- Delivering Great British Nuclear (GBN): Launch a competitive process to select the best Small Modular Reactor technologies and ramping up nuclear capacity in the UK to up to 24GW by 2050.
- Form the first two Carbon Capture, Usage and Storage (CCUS) clusters in the North East and North West.
- Initiatives to help the UK realise its 2030 hydrogen production ambition, which will see the country achieve 10GW of low carbon hydrogen production capacity by 2030.
- Develop up to 50GW of offshore wind by 2030 and to quintuple our solar power by 2035.
- Phase out all new and replacement natural gas boilers by 2035 at the latest.
- Zero Emission Vehicle mandate: requiring that from 2024 an increasing percentage of manufacturers’ new car and van sales are zero emission.
- More than £350m investment in electric vehicle charging infrastructure.
- Maximising the impact of the UK’s public financing institutions, for example through the UK Infrastructure Bank with its £22bn of financial capital
- The opening of the UK’s £160m Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS), which will be used to support port infrastructure and secure the UK’s lead in the new technology.
- £30m to be provided through the Heat Pump Investment Accelerator to secure the economic opportunities of the transition to clean heat.
- An ambitious zero emission vehicle (ZEV) mandate that will put UK manufacturers at the forefront of the electric revolution, supported by delivery of charging infrastructure that government is funding in partnership with industry to boost demand and by our capital allowances reforms to boost investment with the introduction of full expensing for three years.
- Supporting industry to boost exports, including increasing UK Export Finance’s maximum exposure limit from £50bn to £60bn.
- More secure energy supplies going forward by ensuring the UK is sourcing its energy from diversified supplies and relationships
with strong, trusted partners and allies.
- Power the UK through affordable, home-grown, clean energy by reducing energy demand and increasing domestic production, and building supply chain resilience to guarantee supply.
The Powering up Britain plans set out how the government will enhance the country’s energy security, seize the economic opportunities of the transition, and deliver on our net zero commitments.
But how has the Powering up Britain paper been received by the manufacturing industry?
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Mike Hawes, SMMT Chief Executive, said: “Automotive is on track to deliver zero emission motoring, so we welcome this long-awaited consultation on a watershed regulation for the UK new car and van market. We want regulation that gives consumers choice and affordability, and enables manufacturers to transition sustainably and competitively.
“While the proposals rightly reflect the sector’s
diversity, late publication and lack of regulatory certainty make product planning near impossible, and the continued lack of clarity as to what technologies will be permitted beyond 2030 undermines attempts to secure investment.
“Measures to improve the customer charging experience are a step in the right direction, but the fact that contactless credit or debit card payments will not be available on the vast majority of public chargers is a major failing that will significantly disadvantage EV drivers. It is also disappointing that, unlike in other countries, there is no commensurate regulation to drive investment into the public network given that paucity of chargepoints remains the biggest barrier to buying an electric vehicle. Ultimately, for this mandate to be successful, infrastructure providers must now turn promises into investment and catch up with the commitments of vehicle manufacturers.
“The UK new car and van market is already moving at pace towards electrification, the result of massive investment by manufacturers and increased consumer demand. If the UK is to lead the global race to zero emission mobility, however, it must go further and faster in unlocking infrastructure investment, incentivising EV ownership and helping ensure more of these vehicles are developed and built in Britain.”
“Our impression is that this underwhelming in terms of scale and clarity and does not appear to add anything new. The lack of clarity is causing uncertainty for supply chain businesses across the energy industries,” said Neil Golding, the EIC’s Head of Market Intelligence. “There appears to be very little new in the announcements made today, more a rebadging of previous announcements. The supply chain is continually waiting for the new pipelines of projects to develop, but while we have headlines, we always seem to fall short on setting timescales and clear objectives. This means that we are failing to seed and root our supply chain in the UK.”
“We urge the government to provide more detailed guidance on when carbon capture and other projects will be implemented which will provide greater certainty for the supply chain and encourage investment in the industry,” said Mr Golding.
He added: “The announcement fails to acknowledge the significant contribution of the oil and gas supply chain to the UK’s energy security and economy, as well as its role in the transition to cleaner energy sources. The EIC welcomes an open dialogue with the UK Government to discuss how we can work together to develop more robust and sustainable policies for the energy sector.”
Verity Davidge, Director of Policy at Make UK, said: “Today, the Government has rightly put investment in the technologies of the future that are necessary to secure energy supply and keep the UK’s transition to net zero on track. Carbon Capture and Storage, port infrastructure for floating offshored wind and advanced modular nuclear technology have been put front and centre and this will be welcomed by manufacturing. The continued push for renewable electricity and green hydrogen is critical and are rightly being maximised.
“However, these are just a part of a complex puzzle, and we need to maximise use of the technologies we have today to help industry itself decarbonise and which revolve, for the majority of businesses, around energy efficiency.
“While aspects of today’s announcements emphasise the importance of keeping our domestic manufacturing capability afloat in all areas, including the many smaller players in the supply chain, there remains a huge risk that if we do not support manufacturers to overcome the current cost of energy crisis their hands will be tied behind their backs when it comes to investing in the future. Industry needs a stable policy environment that is long-term and coherent across the board if we are to truly meet our net zero ambitions.”
Luke Osborne, Electrical Contractors’ Association (ECA) Energy & Emerging Technologies Advisor, said: “The rebalancing of the electricity market is something we have been calling for, for years. So, we are pleased to see that our voice has been heard in this new report.
“We also support the commitment to EV charging, but without any funding for upskilling our workforce, this is a hollow pledge for now.
“We are falling behind on EV charging targets, despite the growing number of EVs on the road, and this trend is likely to continue unless we invest heavily in skilled, competent workers who can connect the dots and solve the net zero puzzle.
“I fear this report will do little to address the low public awareness of heat pumps and shortage of skilled installers. In many ways, we are still too far back in our Net Zero journey.”
In a statement the Advanced Propulsion Centre (APC) said: “The commitment to electric vehicle infrastructure announced today reinforces confidence in the UK’s capability and is key to maintaining the UK’s position as a global leader in the transition to net-zero carbon emission vehicles say the Advanced Propulsion Centre (APC).
“This investment of more than £350m in electric vehicle charging infrastructure sends a positive signal and will be a great support to the market transition in the UK.
“In 2022, the UK had the second highest battery electric car sales in Europe, bringing the total number of plug-in vehicles on UK roads to over one million licensed, of which around 60% are battery electric. Charging infrastructure is crucial to ensure an efficient transition to net-zero carbon emissions.
“The Powering Up Britain – Energy Security Plan recognises the importance of creating the right conditions and supporting investment as the industry transitions to new energy vehicles. The APC will continue to support UK businesses and investors with the goal of anchoring the new supply chain at scale and pace.”
Clare Bottle, Chief Executive of the UK Warehousing Association (UKWA), said: “While we welcome renewed commitment to solar power, the focus has been on homes rather than on industrial buildings like warehouses, many of which have huge roof space. At a time when warehousing and logistics is transitioning to electrification, consumption is rising along with prices.
“Our recent report into Solar PV on warehouse rooftops confirms that not only would this provide a reliable source of energy at lower cost for businesses, but it could also generate sufficient extra power to double UK’s solar capacity in line with net zero targets.”
She added, “The UK’s 20% largest warehouses can provide 75million square metres of roof space, equivalent to the footprint of 500,000 houses.”
Alex Veitch, Director of Policy at the BCC, said: “The government has grasped the scale of the climate challenge with a wide-ranging plan to boost green energy production.
“Policies the Chamber Network have campaigned for have been brought into play; amending planning rules to make it easier to develop renewable energy; boosting British nuclear power; upgrading our electricity grid; unlocking private investment for Net Zero and a £10 billion boost for Export Finance to support the UK’s burgeoning green export trade.
“But there is a gap around business energy use. To meet the UK’s ambitious 15% energy efficiency target, firms will need to install vital measures such as insulation, energy management systems and renewables.
“Many smaller firms will struggle with the capital costs, so support should be provided where necessary, as has been pledged for households.
““There also appears to be a mismatch between good ideas, such as UK-wide insulation, heat pumps and electric vehicle charging points, and the availability of a skilled workforce to make them happen.
“Alongside the investment in infrastructure and manufacturing must come further investment and policy changes in training to make these plans a reality.
“Allowing apprenticeship levy funds to be used for all forms of accredited workplace training would be a simple step to help deliver the green jobs needed for Net Zero.
“The Government has taken a big step forward with these announcements, but it now needs to plug the gaps in its strategy to ensure it does not lose momentum in the years ahead.”
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