30.10.2017

Government sets out Clean Growth Strategy

Martin Garratt, CEO of Cambridge Cleantech Analyses and Comments
 
This Month the Department for Business, Energy and Industrial Strategy (BEIS) launched the Clean Growth Strategy  setting out how the Government plans to both meet climate targets and help grow the cleantech economy. It is an accompanying strategy to the draft Industrial Strategy which Cambridge Cleantech commented upon in April 2017 here.
It is a broad strategy with over 50 policies covering all cleantech sectors and incorporating:
  • long term targets
  • a timeline of policies
  • specific consultations and calls for evidence on specific topics
The strategy builds on come successes in the cleantech economy in the UK including:
  • Since 1990, carbon emissions have reduced by 42% while the economy has grown by two-thirds.
  • England recycles nearly 4 times more than it did in 2000.
  • In 2016, 47% of electricity came from low carbon sources, around double the level in 2010.
  • There are more than 430,000 jobs in low carbon businesses and their supply chains. 
  
Implications, Opportunities and Challenges for the Cleantech Sector
Cambridge Cleantech welcomes such a positive and supportive strategy with the symbiotic aims of encouraging a reduction in carbon emissions and supporting the highly innovative cleantech business sector, which provides a major opportunity to boost GDP - a real need within the UK’s economic performance at present.
The Strategy has a number of key sections and below we pick out the salient points for the cleantech sector.
Accelerating Clean Growth
Access to finance remains the top priority of Cambridge Cleantech members, witness the ‘sell-out’ Cleantech Venture Day in London that we have organised to broker meetings between cleantech sector investors and innovative SME’s. The creation of a Green Finance Taskforce (provided it is not a talking shop) and a £20 Million investment fund for start-ups is therefore welcomed and we would be delighted to work with Government on these initiatives.

 Improving Business and Industry Efficiency – 25% of UK Emissions

 
A range of policies are put forward to encourage business to reduce their carbon footprint from phasing out fossil fuel heating systems in new buildings, to recycling of heat in industrial processes and to raising minimum standards of energy efficiency in rented commercial buildings. Such measures are welcomed as they will create commercial opportunities for cleantech companies and increase the number of people employed in innovative, high GDP generating jobs in the cleantech sector. However voluntary codes and standards are no match for statutory requirements.
The aspiration to become world leading in the carbon capture sector is also applauded as there are several companies in the UK with potentially world leading technologies.
The opportunity to provide testing facilities for new, innovative cleantech products, should also be considered for inclusion in future policies.

Improving our Homes – 13% of UK Emissions

 
A range of policies are identified to reduce domestic carbon emissions, including:
  •  Futureproofing new homes for low carbon heating systems.
  •  Smart meters for all households to help save energy by the end of 2020.
  • Improving the energy performance standards of privately rented homes. 
  • Investing around £184 million of public funds, including two new £10 million innovation programmes to develop new energy efficiency and heating technologies to enable lower cost low carbon homes.
Such a wide range of policies are welcomed, although it is not clear how many policies are new, but rather it may be the case that the Clean Growth Strategy brings them all together in one policy document. Cambridge Cleantech eagerly awaits announcements about the two new £10 million innovation programmes, which could provide a boost to the UK’s highly innovative cleantech companies.

Accelerating the Shift to Low Carbon Transport – 24% of UK Emissions

The key low carbon transport policies include:

-Spending £1 billion supporting the take-up of ultra-low emission vehicles, including helping consumers to overcome the upfront cost of an electric car.     

  • Investing around £841 million of public funds in innovation in low carbon transport technology and fuels including: ensuring the UK builds on its strengths and leads the world in the design, development and manufacture of electric batteries through investment of up to £246 million.
  • Developing one of the best electric vehicle charging networks in the world by: investing an additional £80 million, alongside £15 million from Highways England, to support charging infrastructure deployment.
Cambridge Cleantech is supportive of these policies and welcomes the opportunity to liaise with Government on the detailed implementation. A particular priority should be the development of battery technology which may provide opportunities for energy storage across other sectors.

Delivering Clean, Smart, Flexible Power – 21% of UK Emissions

 
The key policies include making the grid ‘smarter’, support for off-shore wind projects and £265 million in smart systems to reduce the cost of electricity storage, advance innovative demand response technologies and develop new ways of balancing the grid.
 
With increasing amounts of distributed energy being generated and a grid which is currently more ‘dumb’ than ‘smart’, then the policy initiatives in relation to investment in both battery storage and the ways of enabling the grid to balance supply and demand have got to be the way forward. We are witnessing a strategic change from large and out-dated fossil fuel generated energy supplies to local and renewable sources and the energy grid has to be adapted to these changing circumstances. 
 

Enhancing the Benefits and Value of our Natural Resources – 15% of UK Emissions

 
The development of the circular economy features heavily in this section and the policy to ‘publish a new Resources and Waste Strategy to make the UK a world leader in terms of competitiveness, resource productivity and resource efficiency’ stands out as a major highlight. The proof of how serious we are about being a world leader will be in the detail and Cambridge Cleantech looks forward to commenting on the draft strategy.
 
Public Sector Leadership      
The remaining policies focus on support for enabling the public sector to provide leadership in delivering a clean growth strategy. The provision of £255 million of funding for energy efficiency improvements in England and help for public bodies to access sources of funding and the policy for a ‘Green Great Britain’ week to promote clean growth are both appealing and Cambridge Cleantech would certainly wish to participate in the latter. It  is a pity however that incentives for cleantech procurement by the public sector are not included. 
 
Conclusion     
Cambridge Cleantech welcomes the Governments approach to promoting clean growth for the UK economy and profiling the same in this major new strategy. The strategy is long term and broad based and the devil will be in the detail, but Cambridge Cleantech looks forward to working with the Government to comment on draft policies and to help, through our members, with implementation. The key message for Government is that the cleantech sector can provide solutions to both mitigate climate change problems as well as providing the all-important high GVA jobs for UK PLC.