Cleantech for UK's First Policy Update: UK Government's 'Green Day' Sees a Raft of Key Announcements on Scaling Up Cleantech

April 18, 2023

On 30 March, the UK government’s so-called ‘Green Day,’ 44 separate documents all related to bringing the UK towards a net-zero economy were released. These publications were a mix of strategy, policy, consultations and consultation responses. 

Key documents briefly summarised below are: 

  1. Powering up Britain 
  2. Green Finance Strategy
  3. International Climate Finance Strategy
  4. National Planning Policy
  5. Pro-innovation Regulation of Technologies Review Green Industries (Vallance review)
  6. Government response to the Chris Skidmore review

Certain important pieces were also absent from this release date – one being the consultation on Energy market reform, which is expected later this Autumn.

In our first UK policy update, we dive into the details of this package, and provide an initial analysis on its potential impact for clean technologies.

1. Powering Up Britain 

After the government’s previous net zero strategy was found by the High Court to breach the Climate Change Act 2008 because it didn’t provide enough detail on how emissions cuts could be delivered – the government was ordered to inform parliament how it would deliver its proposed emissions reductions. Along with the other documents published on 30 March, the Powering Up Britain plan makes up the compliance with that court order. 

This new plan outlines the government’s vision for the future of energy in the UK and details its plans for both energy security and net zero growth. It also includes a response to recommendations from the independent review carried out by Chris Skidmore, as well as the recommendations from the Committee on Climate Change. 

The plan sets out the ambition to leverage around £100 billion of private investment over the period to 2030. The plan highlights the expected government investment of approximately £4.2 billion in net zero R&I over the period from 2022-25. This includes £1.5 billion specifically allocated to net zero innovation and announced in the Net Zero Strategy, as well as net zero research and innovation delivered through other departmental programmes and through UK Research and Innovation.

Powering Up Britain also launches Great British Nuclear (GBN), a new government agency which will be responsible for driving delivery of new nuclear projects, backed with the funding it needs. The first priority of GBN is to launch a competitive process to select the best Small Modular Reactor technologies.  

The plan also highlights the Launch of the Floating Offshore Wind Manufacturing Investment Scheme which will provide up to £160 million investment in port infrastructure projects.

Also announced within the scope of the Powering Up Britain announcement were:

2. Green Finance Strategy

This strategy includes several notable announcements. For example, the promise to implement Solvency UK, which claims to create the potential for £100 billion of productive investments from private insurers in the next ten years and a promise to publish net zero investment roadmaps by sector. The strategy also promises action to align the global financial system by supporting equal ambition from other countries and ensuring interoperable approaches between countries. 

Main Announcements:

3. International Climate Finance Strategy

This publication announces that the government will work with financial institutions to develop the frontiers of climate financing, developing innovative market mechanisms which can be replicated, adapted and amplified by other financial institutions to achieve scaleup of cleantech through supporting broad market adoption. The government also promised to tackle the barriers to private investment in climate resilient infrastructure by piloting tools to more efficiently and effectively price physical climate risk so that the cost of capital is not needlessly inflated.

4. National Planning Policy

The government published its proposed revisions to the National policy statements on energy, gas power, renewable energy, gas and oil pipelines and electricity grids. It declared that offshore wind is to be made a critical national priority and stated explicitly the criticality of network infrastructure in achieving net zero.

5. Pro-innovation Regulation of Technologies Review Green Industries (Vallance review)

The government published the Pro-innovation Regulation of Technologies Review Green Industries and the government response to the review.

Key recommendations accepted by the government include: 

6. Response to the Chris Skidmore Net Zero review

Mission Zero, the Chris Skidmore review of the government’s progress on achieving net zero set out 129 recommendations the government must take to achieve its net zero goals. The government response sets out which of the recommendations it will take forward, which it believes it has already completed and which ones they are not going to take forward.

New Forums and Groups announced as part of the review

As part of the recommendations taken forward, the government announced the launch of several new groups and forums:

Government says recommendation made in review is already complete:

The government noted that some of the recommendations made in the review had already been addressed by government action either through existing policy or through new action announced on green day, for example: 

Recommendations to be actioned in the future

The announcements also included promises of things to come: 

The government flagged its intention to explore the design of new funding schemes and noted its commitment to consult on the introduction of requirements for UK’s largest companies to disclose their transition plans – if they have such plans. Furthermore, the government is considering ways of facilitating low-cost finance from retail lenders to drive rooftop solar deployment and assessing the role of low-cost finance options for households and small businesses. 

Additionally, the UK taxonomy consultation is promised to be released in the upcoming Autumn. After that, at the end of the year – or early next – the government will publish its outline of a clear approach to gas vs electricity rebalancing. 

We also await the Biomass strategy due later in 2023. 

Furthermore, government will engage with business on their data needs for net zero through the Net Zero Business and Investment Group. Lastly, in response to the recommendation to analyse UK competitiveness – the government sets out its £56 billion investment since 2021 and commits to continue to assess UK competitiveness.

Recommendations which were made in the review but not accepted by government

Impact on cleantech:
Green Day came with several positive announcements for UK cleantech. The launch of the Floating Offshore Wind Manufacturing Investment Scheme, the negotiation project list for CCUS and the announcement of the successful applicants for the hydrogen fund are all great milestones. The promise of the sector roadmaps to be released throughout 2023 is also positive as they will be a useful tool for understanding what is needed in each sector.

The announcements on Green Day certainly show the ambition of the UK Government and it is clear that many milestones have been achieved, or are on their way. However, the general sense from the documents was one of ‘if we build it, they will come,’ and the belief that expressed ambition equals realised potential. Bold claims are made, but the lack of impact assessments make the claims somewhat difficult to assess. The UK could be further strengthened by a clearer strategy on how it will continue to attract green investment.

With US Congress having passed the Inflation Reduction Act last August and the EU moving ahead with a series of measures under the umbrella of its Green Deal Industrial Plan – key, continent-sized markets are ramping up their direct support for innovative cleantech. It’s vital for the cleantech community that the UK matches such efforts.

As our initial research has shown, the UK is already a powerhouse of cleantech investment but, with the US and Europe accelerating public support to scale clean technologies, the UK risks falling behind.