This piece, written by our Project Officer Morgan Roberts, provides details of the Government’s recent decarbonisation announcements, summarises the various targets and policies and considers what is likely to happen next.
Introduction
On 30 March 2023, the Government released a series of papers, totalling almost 3,000 pages, around their plans for energy, Net Zero and the environment on what they called “Energy Security Day”. Some of the main features were the updated Green Finance Strategy ‘Mobilising Green Investment’, a Carbon Budget Delivery Plan, and ‘Powering Up Britain’, which includes an Energy Security Plan and Net Zero Growth Plan as supporting documents. Some of these updates were required in response to the Climate Change Committee’s (CCC) 2022 Progress Report, the 129 recommendations in MP Chris Skidmore’s Independent Review on the Net Zero Strategy, and an order by the High Court that deemed the original Net Zero Strategy unlawful as it does not demonstrate how the UK will reach its legally binding environmental targets.
Whilst many of the announcements cement commitments already promised in the last Net Zero Strategy, there are a range of updates in these papers relating to commitments around funding, business support, and further reports and consultations planned for later this year. Many of these are relevant to the country as a whole and a few announcements are specific to the West Midlands. Some of the most significant announcements focus on:
- A significant commitment to energy efficiency and demand reduction
- An increasing focus on climate change adaptation and nature
- Further support for businesses in energy efficiency and decarbonisation
- Support for green innovation
The Government’s main commitments to climate change and sustainability are summarised in the below table.
| Area of Sustainability | Government Commitment | Deadline |
| Sustainable Growth | To leverage around £100 billion of private investment | 2030 |
| Sustainable Growth | To support up to 480,000 ‘green’ jobs | 2030 |
| Renewable Energy | Up to 50GW offshore wind production | 2030 |
| Energy Efficiency and Security | To oversee 15% energy demand reduction | 2030 |
| Decarbonisation | 10GW of low carbon hydrogen production capacity | 2030 |
| Energy Efficiency and Security | To have amongst the cheapest wholesale energy prices in Europe | 2035 |
| Renewable Energy | 70GW of solar power production (five times the current amount, enough to power for 20 million homes) of solar power production | 2035 |
| Decarbonisation | Fully decarbonise UK power systems | 2035 |
| Electrification | An ‘ambition’ to phase out all new and replacement natural gas boilers | 2035 |
| Decarbonisation | To run a Net Zero economy | 2050 |
| Energy Efficiency and Security | To increase nuclear capacity to up to 24GW | 2050 |
| Decarbonisation | To become the first Net Zero aligned financial centre | Not specified |
A significant commitment to energy efficiency and demand reduction
With £6.6 billion committed to energy efficiency and demand reduction in the Autumn Budget Statement last year, there are several plans commencing or extended that commit to improving energy efficiency and reducing energy demand within homes and businesses.
Homes
- Extending the Boiler Upgrade Scheme to 2028.
- Investing an extra £1 billion into the Great British Insulation Scheme (formerly ECO+).
- Working with local authorities to support half a million homes through Help to Heat Schemes.
- There will be a consultation this summer on supporting privately owned homes.
It should be highlighted here that there has still been no response on the consultation around increasing the minimum energy efficiency standards for privately rented homes that closed in January 2021, or any announcements on minimum EPC rating for commercial buildings. The minimum energy efficiency standards for privately rented homes is currently still EPC band E.
Businesses and Industry
- A new Energy Efficiency Taskforce has been set up to accelerate energy demand reduction and building/industry decarbonisation, Chaired by the CEO of NatWest. They will publish their action plan later this year.
- £185 million of finance has been unlocked for Phase Three of the Industrial Energy Transformation Fund (IETF), helping businesses with high energy use invest in energy efficiency and low carbon technologies. This phase will open early 2024.
- A new digital energy advice service will be launched this year for small businesses.
- £9.2 million has been assigned to upskill people working in energy efficiency retrofit and low carbon heating in England, supporting over 16,000 training opportunities.
- £550 million has been assigned to update Bootcamps for upskilling people for necessary roles for the green transition, including retrofit, with a commitment to there being 35 different courses across England by the end of the year.
It is important to note there is still no national plan to insulate all Britain’s homes, with the Great British Insulation Scheme’s extension only supporting retrofit of 1% of homes that need it, according to the UK Green Building Council. We are pleased to see, however, that the West Midlands is being given autonomy over their own retrofit plans from 2025 as part of the wider devolution deal.
Other news around retrofit and energy demand reduction includes the launch of the Coalition for the Energy Efficiency of Buildings (CEEB) and the extension of capital support in low carbon heat networks (including £220 million for the Heat Network Transformation Programme).
An increasing focus on Adaptation and Nature
It is especially promising to see an increasing emphasis on nature and climate change adaptation. However, other than mentions of investing in storm overflows and a subgroup of the Green Technical Advisory Committee focusing on sustainable agriculture and fisheries and nature-based solutions, there is still little direct commitment to investment in adaptation.
- The International Climate Finance fund has been tripled, now totalling £11.6 billion, and the Government has committed to assign the money equally between adaptation and mitigation investment, including £3 billion that is ringfenced to protect and restore nature.
- The Big Nature Impact Fund, worth £30 million in seed capital, will be a blended (public and private) finance fund focusing on drawing in investment for nature recovery at scale.
- An Adaptation Action Plan will be released next year, including adaptation metrics and guidance and finance deliverables. This will be created in partnership with industry in response to the Climate Change Committee’s “Investment for a well-adapted UK”. How this differs from the forthcoming third release of the National Adaptation Programme is unclear.
- A new Nature Positive Investment Roadmap (2024) and a Nature Markets Framework (undefined deadline) promise to set out the Government’s approach to supporting and accelerating growth in nature markets.
Further support for Businesses in Energy Efficiency and Decarbonisation
- A data sharing platform for SMEs is being created, and will be piloted by the end of this year with the hopes to present it at COP28. This would be an online platform for SMEs to publish and share data on aspects such as carbon emission accounting to take some of the time and resource off individual businesses when trying to measure and reduce their footprint.
- The Local Net Zero Hubs, set up to help local authorities attract private investment in Net Zero, will continue alongside a new Local Net Zero Forum, helping local and national Government connect and engage in a more unified strategy for decarbonisation.
- A free-to-use digital platform called Net Zero Go has been established to provide local authorities with advice on reaching Net Zero.
- More information on an Energy Advisory Service for smaller businesses to reduce their energy demand will be released in the coming months.
- A consultation opens in Autumn of this year to create a ‘UK Green Taxonomy’, a tool to show organisations what economic activities should be labelled as ‘green’, with a longer-term goal of converting this to legislation.
- The Environmental Reporting Guidelines are being updated to incorporate streamlined energy and carbon reporting.
Support for Green Innovation
Energy
There was a heavy focus on improving infrastructure and supporting innovation to increase nuclear capacity in the UK and investing in Carbon Capture, Usage and Storage (CCUS) technology. Whilst there are some great opportunities for electrification and power grid innovation for the green transition, there is a concerning lack of investment in renewable energy including no specific investment into solar. We would have hoped to see much more investment in increasing our manufacturing capacity for proven renewable energy technologies, particularly here in the West Midlands where we have a long history of world-leading manufacturing abilities but now suffer from a severe lack of funding to move innovation forwards into producing products for market.
Increasing Nuclear capacity in the UK
- Great British Nuclear, a project which will select small modular reactor technologies to fund, is to be launched. The first cluster will be in the Northeast and Northwest of England announced this summer, followed by a second cluster as yet undefined.
- Larger-scale nuclear infrastructure investment is to be provided in the form of an award of £120 million through Future Nuclear, the shortlist of which will be announced “soon”.
Carbon Capture, Usage and Storage
- Eight initial projects are to be announced to fund CCUS research and technology development. £20 billion will be shared between these, which promises to deliver 50,000 jobs and billions of pounds more from private investment.
Wind and Solar Power
- The Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS) will provide £160 million worth of investment in port infrastructure needed for offshore wind manufacturing, leaving the direct investing into wind power to private investors.
- A Solar Taskforce has been set up, where the Electricity Networks Commissioner will advise the Government on accelerating grid delivery and present recommendations in June. The Government have committed to respond with an action plan by the end of this year.
- The National Planning Policy Framework is changing to ensure faster, fairer, more effective planning regimes for renewable energy and energy security. This includes making wind power ‘critical national infrastructure’.
Hydrogen Power
- The shortlist of successful applicants for the Net Zero Hydrogen Fund Round 2, worth £240 million and supporting 750MW of new production capacity, will be announced soon.
- A Hydrogen Production Delivery Roadmap will be published by the end of 2023, which will claim to unlock £11 billion in private investment, support over 12,000 jobs, and introduce legislative powers around hydrogen transport and storage infrastructure by 2030.
Decarbonisation of Heat
- Registration closes for the Net Zero Heat: Design Engineering Innovation Lab run by Innovate UK on 31 May.
- A Heat Pump Investment Accelerator worth £30 million aims to drive the delivery of the Government’s commitment to install over 600,000 heat pumps a year by 2028.
- The Green Gas Support Scheme is consulting until 2025 around slowly injecting biomethane gas into the gas grid as a step in increasing energy security.
Electrical Grid
Government Action Plans
- A Grid Connections Action Plan will be published by the summer.
- A Grid Delivery Action Plan will be released by the end of the year based on advice being given by the Electricity Networks Commissioner in June.
Calls for evidence and input for electrical grid capacity
- Ofgem are asking for input on how to incentivise deploying distributed flexibility at scale, and a technical solution on how to coordinate this.
- The Government are also requesting evidence on how the current energy regulatory framework needs to evolve to remove barriers to innovation.
Competitions for large-scale electricity system innovations
- The Flexibility Innovation Programme is a project funding a range of competitions to create innovation that enables large-scale electricity system flexibility to cope with increasing demands. The next recipients of funds up to £65 million are being announced this year.
Transport
- The Local Electric Vehicle Infrastructure Fund (LEVI) has been extended. This will provide £343 million capital and over £37.8 million resource funding to 25 local authorities over the next two financial years to support electric vehicle infrastructure.
- A further £10 million has been given to the West Midlands Combined Authority (WMCA) to support the development of zero carbon buses in Birmingham.
Promoting Innovation Investment
Legislation
- The Energy Bill aims to incorporate legislation that will stimulate innovation in network solutions.
Initiatives and Funds
- An initiative is being launched called the Freeports Initiative, an incentive to stimulate trade, investment, innovation and job creation in areas near shipping ports and airports, including in the East Midlands. This includes tax reliefs, customs, business rates retention, planning, innovation and investment support, and more.
- The Local Investment in Natural Capital Programme (LINC) has been set up to provide four local authority areas with up to £1 million each in order to build capacity to attract private investment towards environmental priorities and economic growth plans.
- The UK Infrastructure Bank has promised £22 billion in private and local authority lending to increase infrastructure and economic growth to tackle climate change. So far, 12 deals have been announced, investing approximately £1.2 billion and unlocking over £5 billion of private capital.
Increasing investment capabilities
- UK Export Finance (UKEF) has committed to increasing its support in clean growth and climate adaptation. As part of this, the Chancellor has announced an increase in UKEF’s capacity from £50 billion to £60 billion to support UK exporters and supply chains.
- The Contracts for Difference (CfD) Scheme has a current budget of £205 million to incentivise investment in renewable energy, although without mentions of the Government investing directly in renewables.
Summary
Below is a table summarising the aspects most relevant to the West Midlands and SWM’s members and stakeholders.
| Category | Subcategory | Fund/Initiative/Commitment | Stakeholders impacted | Finance (if specified) | Timeframe (if specified) |
| Energy Efficiency and Demand Reduction | Homes | Boiler Upgrade Scheme | Residents | 2028 | |
| Great British Insulation Scheme | Residents | Extra £1 billion | |||
| Help to Heat Schemes | Local Authorities | ||||
| Energy Efficiency Consultation | Private homeowners | Summer 2023 | |||
| Business and Industry | Energy Efficiency Taskforce | Industry | Late 2023 | ||
| Industrial Energy Transformation Fund (IETF) | Business | £185 million | Early 2024 | ||
| Digital Energy Advice Service | Small Businesses | ||||
| Green Skills Bootcamps | Green service providers | £550 million | 35 courses by the end of 2023 | ||
| Retrofit and low carbon heating upskilling | Green service providers | £9.2 million | |||
| Adaptation and Nature | Funding | International Climate Finance for adaptation | Developing countries | 50% of total fund (currently £11.6 billion) | |
| International Climate Finance for protecting and restoring nature | Developing countries | £3 billion | |||
| Big Nature Impact Fund | Public and Private investors | £30 million | |||
| Policy and Plans | Adaptation Action Plan | Many | 2024 | ||
| Nature Positive Investment Roadmap | Many | 2024 | |||
| Nature Markets Framework | Many | ||||
| Business Support | Decarbonisation | Local Net Zero Hubs | Local Authorities | ||
| Local Net Zero Forum | Local Authorities | ||||
| Net Zero Go | Local Authorities | ||||
| Energy Efficiency | Energy Advisory Service | Small Businesses | |||
| Reporting and Advertising | Carbon emissions data sharing platform | SMEs | COP28 | ||
| Consultation on a UK Green Taxonomy | Many | Autumn 2023 | |||
| Environmental Reporting Guidelines | Many | ||||
| Support for Green Innovation | Energy | Great British Nuclear | Nuclear Technology Companies | First Cluster in Summer 2023 | |
| Future Nuclear | Large-scale Nuclear Infrastructure | £120 million | |||
| Carbon Capture, Usage and Storage project funding | CCUS developers | £20 billion total | |||
| Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS) | Port Industry | £160 million | |||
| Solar Taskforce and Action Plan | Solar Industry | End of 2023 | |||
| National Planning Policy Framework update for renewables | Renewable Energy Organisations | ||||
| Net Zero Hydrogen Fund | Hydrogen Power Industry | Round 2 worth £240 million | |||
| Hydrogen Production Delivery Roadmap | Hydrogen Power Industry | “Will unlock £11 billion in private investment” | End of 2023 | ||
| Net Zero Heat: Design Engineering Innovation Lab | Low Carbon Heat Industry | ||||
| Heat Pump Investment Accelerator | Low Carbon Heat Industry | £30 million | Ongoing | ||
| Green Gas Support Scheme Consultations | Low Carbon Heat Industry | 2025 | |||
| Electrical Grid | Grid Connections Action Plan | Energy providers | Summer 2023 | ||
| Grid Delivery Action Plan | Energy providers | End of 2023 | |||
| Call for input on distributed flexibility | Electricity System Innovators | ||||
| Call for evidence on energy regulatory framework | Electricity System Innovators | ||||
| Flexibility Innovation Programme | Electricity System Innovators | £65 million | 2023 | ||
| Transport | Local Electric Vehicle Infrastructure Fund (LEVI) | Local Authorities | £343 million capital and £37.8 million resource funding | 2023-2025 financial years | |
| Green buses in Birmingham | West Midlands Combined Authority | £10 million | 2023 | ||
| Promoting Innovation Investment | Freeports Initiative | Businesses (particularly around East Midlands) | |||
| Local Investment in Natural Capital Programme (LINC) | Local Authorities | £1 million to 25 Local Authorities | |||
| Climate Change Infrastructure and Economic Growth Finance | Private businesses, Local Authorities | £22 billion total | |||
| Contracts for Difference Scheme | Renewable Energy Organisations | £205 million total |
To read other summaries of the information included in these papers, we recommend the Carbon Brief summary and the Government’s own Powering Up Britain Summary.
Final thoughts
As can be observed by the full range of funds, policies and initiatives announced by Government last month, there is the great potential that the UK and the West Midlands could see a transformative approach to decarbonisation. However, it remains to be seen how much of this will come to fruition and, in the meantime, we still need to continue to support our members and stakeholders to get their own houses in order, collaborate to innovate and share good practice. We otherwise look forward to supporting Government with rolling out their ambitious targets, and encourage them to ensure all measures implemented are just, benefit society equally and integrate as many core aspects that make up what we mean by sustainability as possible. Ultimately, we are in a climate emergency and action is needed now.
Morgan Roberts, Project Officer, on behalf of the SWM team
