Government announces £80m boost to cut CO2 from homes and industry alongside £200m of funding for cutting edge R&D efforts, but fresh reports fuel fears 'boring' multi-billion pound efficiency upgrade programme could be sidelined
Almost £80m of funding to support a range innovative energy efficiency projects has been announced by the government today, as it faces growing pressure to ramp up investment in renovating buildings to support a green recovery from the looming recession.
The new investment covers a wide range of programmes, with £30m going towards the first phase of the Industrial Energy Transformation Fund (IETF) aimed at energy intensive manufacturers such as car factories and steel plants; a further £25m earmarked for heat networks, including one project in Gateshead to harness geothermal water sitting in disused mine shafts to heat 1,250 homes; and the remaining £24m focused on new approaches for installing insulation for social housing at scale, rolling out heat pumps, and supporting the development of innovative green home finance products.
Energy and Clean Growth Minister Kwasi Kwarteng said the investment would "help to reduce emissions across our economy, which will save people money on energy bills and protect jobs in heavy industry".
"We want to invest now to ensure we continue to propel the UK towards a stronger, greener future," he added.
The funding will enable a raft of projects that aim to make use of modern smart technologies to show how energy use and bills can be slashed for homes across the UK.
For example, OVO Energy has been awarded £4.2m of government funding to install up to £15,000 worth of technology in 250 pioneering customers' homes. The project will see the energy giant install air source heat pumps, thermal batteries, and energy efficiency upgrades that will demonstrate the effectiveness of zero cabron heating systems.
Similarly, E.ON has secured £3.9m of funding that will see it work with Newcastle City Council to deploy heat pumps in 250 suitable homes across the city.
The new funding follows the unveiling on Saturday of a near-£200m government support package for R&D-intensive companies recovering from the impacts of coronavirus to help drive the development of green technologies that reduce energy use, cut CO2 from transport, and encourage 'climate positive' public behaviours.
The new Sustainable Innovation Fund is to be delivered through Innovate UK and is open to companies across the UK requiring urgent financial support to help "keep their cutting edge projects and ideas alive", the government explained.
"Our ability to innovate will be key to tackling this crisis, driving economic growth and supporting jobs," said Exchequer Secretary to the Treasury Kemi Badenoch. "This funding, on top of our existing support for innovation, will back businesses in a wide range of sectors including technology, health, transport and clean growth."
The moves come amidst an escalating row over the government's plans to deliver a multi-billion pound building upgrade programme, designed to put the country on track to meet its net zero emissions goals.
A report in the Financial Times today indicates plans to fast track a £9.2bn upgrade programme that had been promised in the Conservative Manifesto last year are at risk of being watered down, with the Prime Minister's controversial advisor Dominic Cummings said to favour shifting the funding towards housebuilding rather than green renovation programmes.
The Treasury and the Department for Business, Energy, and Industrial Strategy are understood to be supportive of the plan, having seen reams of evidence that energy efficiency upgrades can both cut emissions and deliver a relatively rapid stimulus in terms of jobs and economic activity.
But sources told the paper Cummings regarded building upgrades as "boring" and alleged that he has expressed some scepticism over the UK's net zero target.
However, any move to water down promised energy efficiency funding would go against the advice of the Committee on Climate Change (CCC) and range of studies over recent months and years that have highlighted how energy efficiency upgrades represent one of the most effective forms of 'shovel-ready' infrastructure for both creating jobs and tackling carbon emissions.
Meanwhile, think tank Green Alliance today warned the UK's current infrastructure investment pipelines for the next four years contained a £14.1bn shortfall compared to what is required to put the UK is on course with its 2050 net zero target.
The suggestion that the £9.2bn upgrade programme could be in jeopardy drew an angry response from politicans and campaigners.
Writing on Twitter, Shadow Business Secretary Ed Miliband said "the government's green commitment will be shown to be completely hollow if it abandons its manifesto promise on home insulation and energy efficiency".
"Making that investment is the right thing to do for jobs, the environment and value for money," he added. "Time for action not words."
Ed Matthew from the E3G think tank said the prospect of the promised funding being re-allocated was "outrageous". "Insulating homes is mission critical to net-zero, does more than any other stimulus to level up and can cut everyone's energy bills," he said. "It is supported by everyone from CBI to unions to the health care workers - except it would seem Dominic Cummings."
Fast food chain teams up with InstaVolt to install rapid electric vehicle chargers at UK Drive Thru restaurants
In response to coronavirus disruption, the government is to give people more time to deliver projects that are eligible for incentive scheme
Venture will see Octo Energy help EDF identify dual-use sites in Wales and England
Prime Minister to reaffirm tree-planting plans as part of £5bn 'New Deal' style recovery package, but green campaigners fear 'false start' as key funding announcements still yet to be confirmed