The UK’s Labour Government has announced a major boost for the country’s clean energy transition, confirming £2 billion of funding for 11 new green hydrogen projects cross England, Scotland, and Wales and £3.9 billion for Carbon Capture, Utilisation, and Storage (CCUS) initiatives in its August Budget. Chancellor Rachel Reeves unveiled the plans during her Budget speech to the House of Commons, underlining the Government’s commitment to making Britain a clean energy superpower.
Driving Growth Through Clean Energy Investments
Speaking about the new funding, Chancellor Rachel Reeves stated:
“To bring new jobs to Britain and drive growth across our country, we are delivering our mission to make Britain a clean energy superpower. Earlier this month, we announced a significant multi-year investment between government and business into Carbon Capture and Storage, creating 4,000 jobs across Merseyside and Teesside.
“Today, I am providing funding for 11 new green hydrogen projects across England, Scotland, and Wales – they will be among the first commercial-scale projects anywhere in the world – including in Bridgend, East Renfrewshire, and Barrow-in-Furness.”
The hydrogen projects, totalling 125 MW of capacity, were initially announced during the Conservative Government’s first Hydrogen Allocation Round (HAR1) in December 2023. However, none of the projects have yet reached a final investment decision (FID) due to delays in funding and regulatory hurdles.
The Government also announced that the results of the second Hydrogen Allocation Round (HAR2), which could award up to 875 MW of capacity, will be released in the coming weeks. This is expected to provide fresh momentum for the UK’s hydrogen industry.
£3.9 Billion for CCUS Projects
In addition to the hydrogen funding, the Government has confirmed £3.9 billion for Track-1 CCUS projects, focusing on Merseyside and Teesside. This investment aims to create thousands of jobs while advancing the UK’s decarbonisation goals.
Industry Reaction: Skills and Innovation Are Key
James Bamborough, Sustainability and Net Zero Policy Manager at the Institution of Engineering and Technology (IET), welcomed the announcement, highlighting the importance of skills development alongside funding for emerging technologies:
“The Government’s commitment to 11 new green hydrogen plants will support its goal of making Britain a clean energy superpower. However, transitioning to hydrogen requires a diverse range of technical and project management skills, as well as customer-facing expertise.
“The £6.1 billion allocated to core research funding in engineering will be instrumental in nurturing groundbreaking technologies, but we must also address the significant skills gap in the UK. With a shortage of 173,000 STEM workers and nearly half of employers reporting skills shortages among their workforce, it is crucial that Skills England takes proactive steps to close this gap and fully harness the potential of the energy transition.”
Accelerating the Energy Transition
The Labour Government’s latest announcements mark a significant step forward for the UK’s clean energy strategy. By addressing funding delays, fostering innovation, and supporting workforce development, the country is moving closer to its goal of becoming a global leader in clean energy.
Notes to Editors:
Contact Information:
- This article is written by Jules Daly, Marketing and Communications Manager at Powersystems.
- Email jules.daly@powersystemsuk.com Telephone 01454 318000
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