Low-carbon strategy pumps cash into offshore wind and marine power

The government has this morning released its long-awaited, low-carbon industrial strategy, pledging to increase financial support for offshore wind and marine energy sectors as part of a wide-ranging initiative designed to curb carbon emissions across UK industry.

The new white paper is the first of a raft of announcements expected from government today, detailing how it plans to meet medium-term emissions targets and transition to a low-carbon economy.

Announcing the new strategy, Business Secretary Peter Mandelson said the move towards low-carbon business models must be used as a chance to create new jobs and bolster UK competitiveness.

"We must ensure we equip businesses and the workforce with the capabilities and skills to take advantage of the potential benefits as the world moves towards a low-carbon future," he said, adding that with almost 900,000 people already employed in environmental industries in the UK, he expects the sector to become a major source of jobs over the coming decade.

According to government estimates, the low-carbon goods and services industry in the UK is currently worth £100bn a year and is expected to grow at four per cent per annum over the next six years.

The white paper outlines how the £405m earmarked for low-carbon industries in April's budget will be distributed, with £120m pledged to support the offshore wind sector, and £60m set aside for wave and tidal projects.

In particular, £8m of the wave and tidal tranche will go to fund expansion of testing facilities at the European Marine Energy Centre (EMEC) in Scotland; up to £22m will form a new Marine Renewables Proving Fund to support testing and demonstration of pre-commercial renewable devices; and further funding has been pledged for the New and Renewable Energy Centre in Blyth, Northumberland, to provide testing infrastructure for marine drive systems.

Almost £10m will be invested in the Wave Hub, a testing facility off the Cornish coast, after the government announced that the South West is to become the country's first Low Carbon Economic Area.

A total of £19.5m in government funding will be invested in the region as part of a two-year £100m programme designed to cement the region's position as a world leader in marine energy technologies.

Stephen Peacock of the South West Regional Development Agency (RDA) said the new funding means it is now "all systems go for Wave Hub". He added that the project has planning consent, a manufacturer appointed to build the hub and grid connection, and has signed up its first developer in the form of Ocean Power Technologies. The company today formally announced it will take the first berth at the Wave Hub to install its PowerBuoy wave energy converter.

When completed, the Wave Hub is expected to provide 20MW of zero-carbon electricity and support up to 1,800 jobs. The RDA added that it also has the potential to expand the project to produce up to 50MW of power.

Charles Anglin of the BWEA, which represents the interests of the wind and marine energy sectors, welcomed the new funding as further evidence of the government's commitment to renewable energy. "This is the government recommitting itself to what it has already said," he argued. "That is good news as it shows they have resisted the siren calls to focus investment elsewhere."

In addition to increased funding for wind and marine energy, the white paper also announces plans for an additional £15m to be invested in a nuclear manufacturing research centre, and a further £10m for the development of an electric vehicle charging infrastructure, including the establishment of a cross-Whitehall Office for Low Emission Vehicles (OLEV) that will drive delivery.

A new open access demonstrator facility for fermentation of up to 10 tonnes for industrial biotechnologies will also receive £12.5m funding, including the establishment of a fund of £2.5m over the next two years to support SMEs using the facility, while the construction of at least 60 low-carbon affordable homes will be funded by a £6m investment.

Finally, the cross-industry Manufacturing Advisory Service will receive an extra £4m to help improve the sharing of low-carbon best practices with businesses.

The government said the remainder of the pledged £405m – around £200m – will be allocated "in the months ahead".