The UK Prime Minister has announced plans for the government's "green industrial revolution", which is aimed to mobilise £12bn of government investment to meet its net zero targets, generate 250,000 jobs and create green economic growth.
The initial announcement yesterday (read more here), summarised ten key areas needed to kick-start the UK's ambitions to "build back green" in the wake of the economic impact from the global pandemic. This included targets for offshore wind, hydrogen, nuclear, electric vehicles and CCUS.
The UK government has since published further details on its ten-point plan in the form of a 38-page booklet, key points including:
- Offshore Wind:
- Support for up to twice the capacity of renewable generation in the next CfD round, with onshore wind and solar projects eligible to bid for CfD contracts.
- An Offshore Transmission Network Review in 2021 will also set out the Government's strategy to connect offshore wind in a clean and cost-effective way.
- 1GW of floating offshore wind by 2030.
- UK's hydrogen strategy to be published next year, with business models finalised in 2022. Proposals on a revenue mechanism will be provided next year.
- 20% hydrogen blending and neighbourhood trials by 2023
- 1GW of hydrogen capacity by 2025 and 5GW by 2030.
- Phase 2 of the SMR design development to be launched in 2021.
- First SMRs and AMRs deployed in the early 2030s.
- £385m for an Advanced Nuclear Fund and £170m for research on AMRs.
- Electric Vehicles:
- £1bn to support electrification of vehicles with funding for "gigafactories" in the West Midlands.
- £1.3bn to support EV infrastructure development.
- It is also noted that the tax system will need to encourage uptake of EVs.
- Two industrial clusters to be established by mid-2020s and four by 2030.
- CCUS business models to be finalised in 2022.
- Proposals on revenue mechanisms will be provided next year.
The ten-point plan is precursor to the Energy White Paper which is due to be published by the end of 2020 and a Hydrogen Strategy to be published in early 2021. It is a significant announcement ahead of the COP26 climate summit in Glasgow next year and sets the UK on its path to net zero by 2050.
However, the challenge in meeting the UK's net zero targets is significant. PWC have recently published a report on the capital required in meeting net zero targets, stating the UK will need up to £400bn of green infrastructure investments over the next decade to meet its net-zero targets. Therefore, significant amounts of private capital will be needed to meet the government's ten-point plan.
The ten point plan will mobilise £12 billion of government investment, and potentially 3 times as much from the private sector, to create and support up to 250,000 green jobs.