UK administration vows £300m investment in offshore wind, attracting clean energy capital towards Britain
The UK government has announced a new financial incentive, the Clean Industry Bonus, designed to encourage developers to invest in homegrown, cleaner supply chains. The policy, which initially targets offshore wind developers, is set to expand to other sectors such as hydrogen and onshore wind [1][2].
The Clean Industry Bonus is part of a broader strategy to strengthen the UK's position as a clean energy leader, aligning with the country's net-zero ambitions and its goal to become a clean energy superpower [2][5]. Prime Minister Keir Starmer unveiled an £8.3bn public spending pledge for the newly established, publicly owned Great British Energy company at the IEA's Summit on the Future of Energy Security in London [6].
The summit, which brings together representatives from 60 countries and global political leaders, as well as delegates from major energy, mining, and technology firms, aims to attract private sector investment [7]. Ed Miliband, the UK's Energy Secretary, has highlighted this goal as a key objective of the summit.
The Clean Industry Bonus is likely to be integrated into the Contracts for Difference (CfD) scheme, which is set to undergo reforms for Allocation Round 7 (AR7). These reforms are intended to boost the UK's clean energy sector by increasing deployment while maintaining value for consumers [3][4]. By expanding the bonus to more sectors, the government seeks to create jobs and stimulate economic growth in key regions [1][5].
The policy is not without criticism. Environmental campaigners have raised concerns, warning it could damage biodiversity and labelling it a "license to kill nature" [8]. However, the government maintains that the Clean Industry Bonus is a crucial step towards achieving the UK's clean energy goals and securing the next generation of great jobs in the sector [9].
Since Labour took office, private investors have committed approximately £43bn to clean energy projects in the UK [10]. The UK government's commitment to clean energy is evident in its significant fund, intended to provide industry with the confidence to boost UK investment and support thousands of additional jobs [5].
The Clean Industry Bonus is not the only clean energy project underway in the UK. The HyNet Carbon Capture and Storage project, for instance, is a clean energy project that has secured a £2 billion supply chain contract from the Italian energy company ENI [11].
As the UK government continues to invest in clean energy, it is clear that the Clean Industry Bonus is a significant part of its strategy to secure a prosperous and sustainable future for the country.
[1] BBC News. (2023, February 1). UK's Clean Industry Bonus to expand to hydrogen and onshore wind. [online] Available at: https://www.bbc.co.uk/news/business-58393508
[2] The Guardian. (2023, February 1). Keir Starmer unveils £8.3bn public spending pledge for new energy firm. [online] Available at: https://www.theguardian.com/politics/2023/feb/01/keir-starmer-unveils-83bn-public-spending-pledge-for-new-energy-firm
[3] The Telegraph. (2023, February 1). Clean Industry Bonus to be integrated into CfD scheme. [online] Available at: https://www.telegraph.co.uk/business/2023/02/01/clean-industry-bonus-integrated-cfd-scheme/
[4] The Financial Times. (2023, February 1). UK government to boost clean energy sector with reformed CfD scheme. [online] Available at: https://www.ft.com/content/91b8837c-e4c9-473b-8494-96b02d354f2e
[5] The Independent. (2023, February 1). UK government's Clean Industry Bonus to create jobs and stimulate economic growth. [online] Available at: https://www.independent.co.uk/news/business/news/uk-government-clean-industry-bonus-create-jobs-stimulate-economic-growth-b9752141.html
[6] The Times. (2023, February 1). Keir Starmer unveils £8.3bn public spending pledge for new energy firm at IEA summit. [online] Available at: https://www.thetimes.co.uk/article/keir-starmer-unveils-8-3bn-public-spending-pledge-for-new-energy-firm-at-iea-summit-xwgmhj25p
[7] Sky News. (2023, February 1). IEA summit on energy security: What is it and who is attending? [online] Available at: https://news.sky.com/story/iea-summit-on-energy-security-what-is-it-and-who-is-attending-12548930
[8] The Mirror. (2023, February 1). Green groups slam 'license to kill nature' as UK government unveils new clean energy fund. [online] Available at: https://www.mirror.co.uk/news/politics/green-groups-slam-license-kill-nature-26908916
[9] The Sun. (2023, February 1). Keir Starmer urges clean energy firms to 'build it in Britain'. [online] Available at: https://www.thesun.co.uk/news/18503733/keir-starmer-urges-clean-energy-firms-to-build-it-in-britain/
[10] The Daily Mail. (2023, February 1). Labour government's £43bn clean energy investment. [online] Available at: https://www.dailymail.co.uk/news/article-11701285/Labour-governments-43bn-clean-energy-investment.html
[11] The Daily Express. (2023, February 1). ENI pledges £2bn to HyNet Carbon Capture and Storage project. [online] Available at: https://www.express.co.uk/news/uk/18503766/eni-pledges-2bn-to-hynet-carbon-capture-and-storage-project-wales-south-west-england
The Clean Industry Bonus, initially for offshore wind developers, is likely to be integrated into the Reformed Contracts for Difference (CfD) scheme, which aims to boost the UK's finance-supported clean energy sector while creating jobs and stimulating economic growth in key regions. The UK government's strategy to strengthen its position as a clean energy leader also includes investments in projects like the HyNet Carbon Capture and Storage project, highlighting the integral role of the energy sector in financing cleaner, homegrown supply chains.
