Government unveils investment in future energy technologies

  • The “UK Energy Security Strategy” draws on hundreds of millions of pounds of investment to develop cutting-edge energy technologies.
  • support will unlock investments and opportunities in hydrogen, advanced nuclear and carbon capture utilization and storage (CCUS)
  • new technologies will boost UK energy security, provide clean, cheap energy to homes and businesses and create thousands of jobs

The Government today (Friday 8th April 2022) launched a massive £375m support package for innovative energy technologies that will power UK homes and businesses for decades and further boost the country’s energy security.

This includes £240m to support hydrogen production as a clean, low-cost energy technology, £2.5m in funding to develop next-generation nuclear technology and a further £5m to carbon capture research.

Today’s investment will support research, development and deployment of these advanced technologies and give the country the energy independence it needs, reducing dependence on expensive fossil fuels. From next-generation nuclear reactors to hydrogen for industry, electricity, transport and potentially heating, the government is revolutionizing the way the UK gets its energy through a range of technologies.

Yesterday’s ‘British Energy Security Strategy’, unveiled by the Prime Minister, outlines how Britain will accelerate the deployment of wind, new nuclear, solar and hydrogen, while supporting the production of short-term domestic oil and gas – which could see 95% of electricity by 2030 being low-carbon.

Business and Energy Secretary Kwasi Kwarteng said:

This investment will unlock the huge potential of hydrogen, advanced nuclear reactors and carbon capture to improve the UK energy landscape and deliver to businesses and households.

High gas prices and Russian aggression in Ukraine have highlighted the urgent need to produce more energy here in the UK.

That’s why we’ve made bold plans to harness clean, cutting-edge, local technologies and build the energy security we need for the future.

UK Government Minister for Scotland Malcolm Offord said:

Harnessing the huge potential of low-carbon technology is at the heart of our plans to boost the UK’s home energy supply, benefiting families and businesses across the country.

This UK government support will accelerate innovation in some of the most promising technologies, including the development of hydrogen power and next-generation nuclear reactors. Funding for vital carbon capture research, including three projects in Scotland, will help us meet our decarbonisation ambitions.

Government support

Government support today includes:

The £240m Net Zero Hydrogen Fund, which funds low-carbon hydrogen generation projects, with the aim of providing funding from the end of 2022. This will advance the ambition of the government to have up to 2 GW of low-carbon hydrogen generation capacity by 2025 and over 10 GW installed by 2030, using electricity to generate electricity by dividing the water into hydrogen and oxygen.

The hydrogen business model, which will support new investment in hydrogen production with £100 million for electrolytic projects to cover the difference between the cost of production (the strike price) and the price of sale of hydrogen (reference price). Funding for this will be launched this summer.

The Industrial Hydrogen Accelerator, a £26m innovation funding scheme to help UK industry adopt hydrogen as a clean and affordable fuel source for sectors like manufacturing by demonstrating the feasibility of hydrogen to businesses and reducing the cost of switching energy systems.

A £2.5m competition for bidders looking to develop an advanced modular reactor in the UK (RAM). These reactors use new and innovative fuels, coolants and technologies to generate high temperature heat for industrial applications as well as electricity to power homes. Industry representatives are invited to apply for a share of this funding to develop their projects. As well as this, the Business and Energy Secretary also announced today that nuclear regulators (the Office for Nuclear Regulations and Environment Agency) have received £830,000 in additional funding to help bring development from the United Kingdom AMR to bear fruit.

Government funding of £5 million to accelerate carbon capture and storage (CCUS) Technologies under the LAW 3 scheme. CCUS involves the capture, transport and storage of greenhouse gas emissions that would otherwise be released into the atmosphere, meaning that energy can be stored and used. LAW 3 is an international initiative between 14 countries around the world, including the UK, aimed at accelerating CCUS technologies by funding research and innovation projects and the funding will support the commercialization of the technology so that companies right here in the UK can invest in it.

In addition to this funding, the government also publishes a series of important documents and guidelines to support the development of these industries.

Government support for hydrogen is also being complemented by significant private investment, including ITM Power’s announcement of a new electrolyser plant in Sheffield which will support the hydrogen industry and create 500 jobs.

More information

All of these programs are supported through the Net Zero Innovation Portfolio.

In addition to the investments detailed above, we also publish the following.

the Hydrogen investor roadmap to highlight the many investment opportunities across the hydrogen value chain and boost private hydrogen investment to help boost the UK’s hydrogen industry based on clean and affordable energy. the CCUS Investor roadmap will be published alongside and summarizes current government and industry engagement, outlining further opportunities to provide CCUS and stimulate investment.

the response to our consultation on a low carbon hydrogen standardwith the aim of setting a maximum threshold of greenhouse gas emissions allowed in the production process for hydrogen to be considered low carbon under the Net Zero Hydrogen Fund and the business model of the ‘hydrogen.

the Hydrogen business model to advance significant private investment in new low-carbon hydrogen generation, with the government providing initial support of £100m to the income funded by the Industrial Decarbonisation Aid and the revenue from the hydrogen (IDHRS) diet.

the response to our consultation on the Hydrogen Business Model also provides an update on government reviews of hydrogen grid and storage infrastructure needs in the 2020s and beyond, as planned in the Hydrogen Strategy.

The industrial hydrogen accelerator

The Industrial Hydrogen Accelerator is a £26 million innovation funding program to support the demonstration of the end-to-end industrial fuel shift to hydrogen in the UK. It aims to prove the feasibility and reduce the costs and risks of hydrogen fuel switching systems.

The scope will include the entire technological chain, from hydrogen generation and storage to industrial end use, including the integration of components in a single project.

The projects will develop knowledge on the design and implementation of industrial hydrogen systems and present “first-of-its-kind” plans to enable deployment in the late 2020s.

The fund will open for applications the week of April 25, 2022, and demonstration projects must be completed by March 2025. Find more information on the IHA.

LAW 3

LAW 3 is an international initiative between 14 countries around the world, including the UK, to accelerate and mature the capture, use and storage of carbon (CCUS) technologies by financing research and innovation projects. CCUS involves the capture, transport and storage of greenhouse gas emissions that would otherwise be released into the atmosphere.

LAW partners include the Province of Alberta, Denmark, France, Germany, Greece, India, Italy, Netherlands, Norway, Romania, Switzerland, Turkey, Kingdom United and the United States.

The British element of LAW 3 program is funded by the NZIP and will provide up to £5 million in funding until March 31, 2025 for CCUS developers to do further research. The £5m provided by the UK will contribute to a total funding pot of around £40m (including in-kind and industry funds), of which around £25m is being provided by LAW the partners.

LAW 3 follows LAW 1 and 2 which provided a total of around £58m, where 15 UK projects were funded for a total of £13m from this pot. Key results of the program include international collaboration, dissemination of results and promotion of accelerated CCS technologies to full scale/commercialization. Learn more about LAW.

RAM Demo program

High temperature gas reactors (HTGR) are central to this innovation agenda, as they maximize opportunities for decarbonizing process heat by 2050. This was announced at the Nuclear Industry Association (NIA) annual conference on December 2, 2021 by Minister of Energy Greg Hands.

the RAM Research, Development and Demonstration Program: Market engagement was completed in February and March 2022.

Previously we published a prior information notice which sets out our intention to publish the official competition documents for the initial phase (Phase A) of the program in the spring of 2022.

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