Shapps sets out plans to drive multi billion pound investment in energy revolution

Ambitious plans to scale up affordable, clean, homegrown power and build thriving green industries in Britain have been unveiled by the government today (Thursday 30 March) – boosting the country’s energy security and independence and reducing household bills for the long term and maintaining a world-leading position in achieving net zero.

Putin’s illegal invasion of Ukraine had a devastating effect on global energy markets, forcing up wholesale prices and with it the energy bills of households and businesses in the UK and around the world.  In response, the government has taken steps to shield consumers and companies from the worst effects, paying around half a typical household’s bill over the winter and half the wholesale energy costs paid by some businesses.

After decades of reliance on importing expensive, foreign fossil fuels, the government is delivering a radical shift in our energy system towards cleaner, more affordable energy sources to power more of Britain from Britain.

In doing so, plans will help deliver on the Prime Minister’s promise to grow the economy across the country, supporting almost half a million new green jobs by 2030, creating a strategic advantage in new clean industries, and generating opportunities for UK businesses to export their expertise around the world.

Building on decisive government action taken since 2021, measures announced today include:

• world leading commitment to carbon capture usage and storage – the first projects will be announced to progress to the next stage of the negotiations to rollout the first carbon capture clusters in our industrial heartlands. The round for areas to apply for 2 additional future clusters has also been launched and there will be an opportunity for further projects to be added to the first 2 clusters. These announcements build on the £20 billion CCUS funding
• kickstarting investment into the UK’s emerging floating offshore wind industry by launching the £160 million fund to support port infrastructure projects, securing the UK’s leadership in this new technology
• backing the first tranche of new green hydrogen production projects under the £240 million Net Zero Hydrogen Fund as part of development of this new power source
• opening the fifth round of the UK’s world-leading scheme to incentivise investment in renewable electricity, backed by a budget of £205 million. Now being held annually, Contracts for Difference will build on the UK levy-funded support for renewable power since 2010 of around £80 billion
• announcing Great British Nuclear, will initially be led by Simon Bowen as interim Chair and Gwen Parry-Jones OBE as interim Chief Executive Officer: with GBN’s first job to launch a new competition to select the best small modular reactor technologies – one of the most advanced nuclear power technologies in the world – for development by Autumn
• speeding up the planning process to attract investment – reforming the planning process to enable the building of more energy infrastructure including solar power and offshore wind projects more quickly
• cutting household bills by expanding government energy efficiency support to even more households – the Great British Insulation Scheme, a rebranded ECO+, will upgrade 300,000 of the country’s least energy efficient homes.
• investing more than £380 million into boosting electric vehicle (EV) charging points and infrastructure across the country to support the rollout of electric vehicles
• reducing our reliance on fossil fuels to heat our buildings – a new £30 million Heat Pump Investment Accelerator is designed to leverage £270 million private investment to boost manufacturing and supply of heat pumps in the UK. The Boiler Upgrade Scheme, which offers a £5,000 grant to anyone buying a heat pump, will be extended to 2028
• providing UK Export Finance with an extra £10 billion capacity to boost exports, including from the UK’s world leading clean growth sectors
• building a stable environment for businesses to invest and grow in the transition to electric vehicles and sustainable aviation fuel

Prime Minister Rishi Sunak said:

When global energy supplies are disrupted and weaponised by the likes of Putin, we have seen household bills soar and economic growth slow around the world.

We have stepped in to shield people from its worst impacts by helping to pay around half the typical energy bill. But we are also stepping up to power Britain and ensure our energy security in the long term with more affordable, clean energy from Britain, so we can drive down energy prices and grow our economy.

That’s why we’re driving forward plans to boost renewables, revive nuclear and build new thriving industries like carbon capture, which will in turn create good jobs across the country, provide new opportunities for British businesses at home and abroad, and maintain our world-leading action to reach net zero.

Energy Security Secretary Grant Shapps said:

We have seen over the past year what can happen when global energy supplies are disrupted, and a tyrant like Putin uses energy as a weapon.

Access to cheap, abundant and reliable energy provide the foundation stone of a thriving economy with our homes and businesses relying on it to deliver our future prosperity.

Following our unprecedented cost of living support this Winter, which continues, this plan now sets out how we fix this problem in the long term to deliver wholesale UK electricity prices that rank amongst the cheapest in Europe, as we export our green growth expertise to the world.

Chancellor of the Exchequer Jeremy Hunt said:

Transforming our energy system is no longer just about tackling climate change, it is also a matter of national security. To protect ourselves from future price spikes, we need to accelerate the move to cleaner, cheaper, home-grown energy.

By unlocking billions of pounds of private capital through our Green Finance Strategy, we generate more of the energy we need in Britain and create new industries and jobs that are built to last.

Since 2010, the UK has seen £198 billion of investment into low carbon energy, through a mixture of government funding, private investment and levies on consumer bills. Going forward we anticipate around £100 billion of private investment will be forthcoming into the UK’s energy revolution. The UK has also broken numerous records in generating renewable electricity, leading the world in offshore wind – the UK is now in prime position to export its world-leading expertise.

This will drive green growth at home and abroad and see British businesses set the standard for a clean, secure and prosperous future.

Building on our COP26 Presidency and our role in agreeing the Global Biodiversity Framework, the UK will continue to lead international action in tackling climate change and biodiversity loss, working with our partners and delivering on our £11.6 billion International Climate Finance commitment. The 2030 Strategic Framework for International Climate and Nature Action and the International Climate Finance Strategy set out today what this will look like in practice.

Stakeholder reaction

Simon Bowen, Great British Nuclear, Interim Chair said:

The launch of Great British Nuclear marks the next step in the UK’s nuclear renaissance and I am delighted to part of it. GBN will drive the delivery of a successful programme of nuclear new build projects faster offering real value for money and providing a more stable energy future for our country. It is a great privilege to have the opportunity to work with Gwen to build our team and ensure the organisation’s success.

Gwen Parry-Jones OBE, Great British Nuclear Interim CEO said:

I strongly believe that GBN will drive the delivery of new nuclear projects, building a resilient and secure energy system and creating a powerful economic legacy for the UK. I am honoured to have the opportunity to serve as GBN’s interim CEO and guide it through its formative stage.

A spokesperson from Rolls-Royce SMR said:

Rolls-Royce SMR welcomes the government’s commitment to investing in an energy revolution and moving at pace towards cleaner, more affordable ‘home-grown’ energy sources. The Rolls-Royce Small Modular Reactor (SMR) can begin providing stable, secure supplies of low-cost power by the early 2030’s and we look forward to engaging in Great British Nuclear’s selection process.

Our organisation has a strong nuclear heritage and the Rolls-Royce SMR design is based on well understood nuclear technology, already making good progress through assessment by the industry’s independent regulators.

As the UK’s sovereign nuclear technology, we are well placed to support the government’s energy security and net zero objectives.

Hannah Gurga, ABI Director General, says:

The insurance and long-term savings sector welcomes the government’s renewed commitment to transforming the UK economy to reach net zero and protect our natural environment. It is right to emphasise speeding up delivery of large-scale energy projects alongside targeted support for technology innovations where the UK can become a world leader. As a sector that offers both investment capacity and risk management expertise, we urge the government to work closely with our sector to support these projects to be a success. It is important that the government continues to send strong signals to markets about the growth opportunities it sees in net zero technology to enable sustained investment.

The package of measures the Chancellor has announced in the updated Green Finance Strategy provide a platform through which our sector can deliver on the ambitions set in the ABI’s world leading Climate Change Roadmap. In particular, it is important that the government remains committed to mandatory publication of transition plans and sets out how nature can be incorporated into these plans. The ABI will work with the government to ensure the range of proposals in this strategy can be implemented effectively.

Chris Hewett, Chief Executive of Solar Energy UK, said:

Solar Energy UK strongly welcomes the taskforce, which is a clear indication from the government that it wants the UK to take full advantage of solar energy’s vast economic potential. We look forward to working closely with ministers to lay the path towards a 5-fold increase in solar capacity in the UK by 2035.