Energy

UK plans to reach net zero by attracting £90bn in private funding


The UK government has set out plans to attract £90bn in private sector investment and “secure” 440,000 jobs in green projects over the next decade as part of its long-awaited strategy outlining how it plans to hit its net zero carbon target by 2050.

The “Net Zero Strategy” published on Tuesday identified areas of low-carbon technology including nuclear power, electric vehicles, industrial decarbonisation and hydrogen that will be able to access state funding.

Prime minister Boris Johnson has been under pressure to set out precisely how the UK plans to reach its 2050 “net zero carbon” carbon in the run-up to the COP26 climate summit in Glasgow next month. The challenge involves eliminating most greenhouse gases from electricity generation, transport and household heating.

The government said it hoped that the state funding would attract £90bn in private investment from companies and institutional investors that would help “secure” 440,000 jobs.

The 368-page document said reducing Britain’s reliance on imported fossil fuels would protect consumers from global price spikes by boosting clean energy. By 2035 the UK would be powered “entirely by clean electricity, subject to security of supply,” the plan said.

New rules will also require carmakers in the UK to sell an unspecified proportion of electric vehicles under a new “zero emissions mandate” from 2024.

The long-delayed plans come just weeks ahead of COP26, which is set to be a major test of the government’s post-Brexit diplomatic clout and credibility on green issues.

The Johnson administration has been repeatedly criticised this year for delaying the release of these key net zero documents. The batch of papers includes a Treasury review of where the costs of the transition could fall.

The Net Zero strategy promises £120m to support the development of next generation nuclear technologies, including “small modular reactors” (SMR), a type of small-scale nuclear reactor which could be built in factories and assembled rapidly and at lower costs than full-scale power stations.

The strategy also reconfirmed a £385m fund first announced last year that it said would support a “SMR design”. A consortium backed by Rolls-Royce has been raising private match-funding in the hope of securing around £200m of taxpayer money for its SMR technology.

The government also reiterated it planned to bring “at least one large-scale nuclear project” to the point of final investment decision by the end of this Parliament, which is likely to be a reference to Sizewell C in Suffolk.

The announcement includes £350m for boosting the electric vehicles supply chain from an existing £1bn “Automotive Transformation Fund” and another £620m to support the buildout of charging infrastructure.

Ministers also pledged £500m towards an innovation fund for green technology, topping up an existing “Net Zero Innovation Portfolio” to at least £1.5bn. “This will support the most pioneering ideas and technologies to decarbonise our homes, industries, land and power,” it said.

Johnson said on Tuesday that the UK’s path to net zero would be “paved with well-paid jobs, billions in investment and thriving green industries”.

He promised that “by moving first and taking bold action” the UK could build a “defining competitive edge” in a range of green technologies including electric vehicles, offshore wind and carbon capture.

The document also sets out an ambition to triple tree-planting rates in England and carry out peat restoration with an extra £124m of funding on top of an existing £640m commitment.

There will also be £140m to accelerate industrial carbon capture and hydrogen. Earlier on Tuesday the government announced it was looking to fast-track two multibillion-pound carbon capture and storage schemes in the North East and North West of England and have them operational by 2025.

The government also confirmed £3.9bn of funding to help decarbonise the UK’s housing stock, including £450m of subsidies for households to buy electric heat pumps to replace gas boilers. UK homes account for more than a fifth of all carbon dioxide emissions.



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