Katherine Burden breaks down the government’s Ten Point Plan for a Green Industrial Revolution, which will see billions invested in low carbon technologies and emerging green industries.
Ever since the COVID-19 pandemic made its impact on the economy clear in early 2020, voices from all corners of politics and industry have recognised the desire to ‘build back greener’ from the crisis.
We know that the transition to a net-zero economy has the potential to create millions of well-paid, stable jobs in areas like energy efficient retrofit and renewable energy. But what we need are the policies to make this happen.
In November, we were finally given the full picture of the UK government’s key priorities for a green recovery. The Prime Minister’s Ten Point Plan for a Green Industrial Revolution aims to mobilise £12 billion of government funds and create 250,000 green jobs by 2030, across ten key areas:
1. Offshore Wind
There is little surprise that offshore wind is number one on the government’s hit list. The UK already generates more electricity from offshore wind than any other country, and the plan is to quadruple our current capacity over the next decade.
To achieve this, the government will provide more subsidy support for offshore wind developments and invest £160 million into modern ports and manufacturing infrastructure. This is expected to generate around £20 billion in private investment by 2030, with new opportunities opening up in everything from component manufacture to operations and maintenance. The government has committed to ensuring 60 per cent of spending goes to the UK supply chain, supported by the Offshore Wind Growth Partnership.
The concept of using hydrogen as a low carbon alternative to fossil fuels has been around for a long time, but it’s only now beginning to really gain traction. Unlike fossil fuels, hydrogen burns cleanly without producing harmful emissions. It can be used to generate heat, power or propulsion, and is storable and distributable.
The Ten Point Plan sets out an aim to support the development of 5GW of hydrogen capacity by 2030 and support pioneering industrial trials. The North West region is emerging as a leader in the field through projects such as Hynet – a consortium of major industry players that plans replace part of the regional gas supply with locally produced hydrogen.
Hynet is the flagship initiative of the recently launched Net-Zero North West partnership, which is competing with other regions to develop the UK’s first ‘low carbon industrial cluster’. Within Greater Manchester, cutting-edge developments are being driven by the Manchester Fuel Cell Innovation Centre (MCFIC).
Our own research into the supply chain opportunities in Greater Manchester shows that there are strong diversification opportunities for SMEs working in areas like gas appliance manufacture and supply, gas fitters and installers, and the automotive/transport supply chain.
Despite the difficulties with rolling out new nuclear projects like Hinkley Point C over the last few years, the government is very much supportive of ensuring nuclear will play a role in our future energy system.
Along with large-scale nuclear projects, significant investment is also being earmarked for developing next-generation ‘small modular reactors’ that could be built in factories. These could potentially be deployed in the UK as early as the 2030s.
4. Zero-Emission Vehicles
It’s no secret that zero-emission vehicles are front and centre of the government’s vision for a cleaner, greener economy. The UK is already a leading manufacturer of electric vehicles and the government has promised a supportive regime to build up the domestic supply chain, including ‘gigafactories’ that will produce the batteries needed at scale.
The UK-wide target to end the sale of new petrol and diesel cars and vans was recently pushed forward from 2040 to 2030. The government has previously announced over £1 billion of investment to roll out charging infrastructure to homes, workplaces, streets and major roads.
Grants to incentivise the switch to plug-in vehicles and installation of charging points are in place until at least 2022-23. At the local level, Greater Manchester’s proposed Clean Air Plan will act as a further incentive to switch to electric and hybrid commercial vehicles.
The shift towards electrification offers significant diversification opportunities for green tech SMEs, particularly in installing and maintaining the charging infrastructure that will be rolled out over the next few years.
5. Public transport, cycling and walking
As well as zero-emission vehicles, the Ten Point Plan also sets out a blueprint for improving public transport and encouraging active travel.
£5 billion of investment has already been set aside for buses, cycling and walking during the course of the current parliament. This will fund over 1,000 miles of cycling and walking networks by 2025, create low traffic neighbourhoods in our towns and cities, and put at least 4,000 British-built zero-emission buses onto our roads.
Billions will also be invested in upgrading the rail network and electrifying railway lines. Decarbonising public transport could create up to 3,000 new jobs across the UK by 2025.
6. Zero-emission aviation and maritime
Aviation and shipping remain incredibly difficult sectors to decarbonise and innovation in this area is still mostly in the R&D phase.
The government has set out a number of initiatives to build a roadmap to net-zero aviation. £400 million has already been given to the aerospace sector to develop new high-performance engines and wing designs, lightweight materials and other green innovations. A new sector-wide partnership with the government called the Jet Zero Council has already launched a £15 million project to kickstart the design of zero-emission aircraft, and a further £15 million is to be invested in developing greener fuels.
To complement the work on decarbonising aviation, £20 million will also be invested in developing greener shipping technology such as hydrogen-powered ferries.
7. Greener buildings
Making our homes, public estate and commercial buildings more energy-efficient is one of the biggest challenges we face in the race to a net-zero economy. In Greater Manchester alone, more than 61,000 homes require ‘whole house’ retrofitting with energy-efficient insulation and green heating every year if we are to get anywhere near hitting the city region’s target of carbon-neutral by 2038.
The government had already launched its flagship £2 billion Green Homes Grant earlier this year, but the scheme has now been extended by a year to give more homeowners a chance to benefit.
The Green Homes Grant scheme is a huge opportunity for SMEs in the retrofit and construction supply chain, with the government hoping it will support up to 100,000 jobs. But this scheme is only one of many policies we will need. There are similar initiatives for public sector estate and social housing, while mandatory energy efficiency requirements for private sector landlords will be strengthened over time.
For new buildings, the government has committed to implementing a Future Homes Standard “in the shortest possible timeline”, potentially in the early 2020s. The standard will ensure new homes have 75-80 per cent lower emissions than current building standards. Similar standards will also be developed for non-domestic buildings.
One of the key technologies already standing out is heat pumps. The government hopes we will be installing 600,000 of these a year by 2028 in the effort to shift homes to clean, gas-free heating. Given that the supply chain for this technology is still in its infancy, there are huge opportunities opening up in both manufacture and supply.
8. Carbon capture, usage and storage
Like hydrogen, carbon capture and storage (CCS) has been a sector long in the making but only now beginning to gain traction. CCS involves capturing the emissions from power generation or industrial processes and storing it underground where it cannot enter the atmosphere. Hynet, the hydrogen project mentioned above, is an example of CCS – the CO2 emitted during the production of hydrogen will be captured and stored offshore in decommissioned gas fields.
Some projects are also finding a use for captured carbon (CCUS). One project in Cheshire is planning to capture CO2 at a manufacturing facility and then use it as a raw material.
The government has announced a £1 billion fund to develop CCS and CCUS projects at scale over the next five years, with the aim of removing 10 million tonnes of carbon from the atmosphere.
9. Natural environment
Protecting and restoring the natural environment is another vital way of capturing and storing carbon from the atmosphere, as well as enhancing biodiversity. The Ten Point Plan reiterates the government’s existing goal to plant 30,000 hectares of trees every year and restore peatland environments that naturally sequester carbon.
There are growing opportunities in the green technologies and services sector for rolling out these ‘nature-based solutions’, which also include urban green infrastructure like living walls and sustainable urban drainage (SuDS). Greater Manchester is leading in this area through cutting-edge schemes like the £4 million IGNITION project.
10. Green finance and innovation
The government has rightly recognised that unleashing new sources of finance is essential for driving the net zero transition. The plan is to turn the City of London into a global centre of green finance, with the UK’s first Sovereign Green Bond due to be issued in 2021.
The greening of finance will be supported by the introduction of mandatory environmental disclosure standards for large companies by 2023, which will open up new opportunities for environmental consultancies.
Meanwhile, a £1 billion ‘Net Zero Innovation Portfolio’ will be launched to accelerate the commercialisation of innovative green technologies. It will focus on ten priority areas: floating offshore wind; advanced nuclear modular reactors; energy storage and flexibility; bioenergy; hydrogen; homes; CCUS; industrial fuel switching; and disruptive technologies like artificial intelligence.
How we can help
Experts have already pointed out that the Ten Point Plan will only deliver around half of the emissions cuts required to keep the UK on track for its climate targets, but it certainly provides us with the direction of travel going forward.
Our Green Technologies and Services team is perfectly placed to help SMEs in Greater Manchester to navigate these emerging opportunities.
Katherine Burden, Low Carbon Sector Lead
Katherine is a skilled and knowledgeable business advisor with over 13 years’ experience working within the Green Technologies and Services sector. As co-founder of a low carbon consultancy, Katherine brings first-hand experience of running a small business coupled with specialist knowledge of the sector. With a passion for helping small businesses to thrive, Katherine has worked on numerous business support programmes and continues to use her sector insight and business acumen to advise clients on topics such as sales & marketing, exporting, business planning and market research.