This month has seen a range of developments in industrial decarbonisation, including funds available to support businesses in reducing their carbon emissions, as well as innovative ways to harness existing renewable power to help sectors that may be more challenging to decarbonise.

We’ve also seen increased Government ambition to implement long duration energy storage technologies across the UK, which could help provide the grid with much needed flexibility and support the UK’s transition to net zero.

Here’s what you need to know this month:

The UK Government has launched the third phase of its Industrial Energy Transformation Fund (IETF), which will provide an additional £185 million between 2024 and 2028 to encourage energy-intensive businesses to invest in energy efficiency and low carbon technologies¹.

The IETF works as a competition, awarding funds to winning organisations across three categories:

• Funding for feasibility and engineering studies, helping businesses to explore energy efficiency and decarbonisation projects before deciding to invest in them.
• Funding to make industrial processes more energy efficient by implementing new technologies.
• Funding to deploy technologies aimed at reducing emissions from industrial activities, for instance retrofitting equipment to use low carbon hydrogen in industrial processes.

As well as already being eligible to businesses such as manufacturers, during its third phase, the IETF will be accessible to a broader range of sectors, including industrial laundries and textile renting facilities. Businesses can submit proposals to one or more of the funding categories, with applications for the next round of funding open until April 24^th. For more information on applying to the IETF, you can find the Government’s website here.

The Government has also recently announced the twelve winners of its Local Industrial Decarbonisation Plan (LIDP) competition. Differing from the IETF, the Government’s LIDP fund is specifically designed to assist the decarbonisation efforts of industrial manufacturers who are not located in existing industrial clusters, with winning organisations set to share up to £6 million to develop plans to reduce their carbon emissions. Winners will also benefit from the Government’s technical support, helping them to replace inefficient equipment, transition to renewable energy sources and adopt low-carbon technologies. To see the full list winners, you can click here.

For more information on both the LIPD and IETF, you can visit the Government’s website.

The UK Government’s Department for Energy Security and Net Zero (DESNZ) has estimated that deploying 20GW of new energy storage capacity between 2030 and 2050 could lead to savings of up to £24 billion for the UK’s energy system². To meet these ambitions, they have announced a new consultation aimed at promoting investment into long duration energy storage (LDES)³.

LDES refers to a type of energy storage technology designed to store and release renewable electricity over a period of at least six hours. The scope of proposed financial support includes ‘novel’ technologies such as Compressed Air Energy Storage (CAES), which stores energy by compressing and storing air, ready to be released to generate electricity when demand is high. It also includes established LDES technologies such as pumped hydro storage, which works in a similar way, releasing stored water through a hydro turbine to generate renewable electricity. LDES technologies such as these are likely to play a crucial role in the UK’s transition to net zero, providing the grid with flexibility to support the integration of more renewable energy into the power mix. Despite clear benefits, the UK currently hosts just 2.8GW of active LDES capacity across four pumped hydro plants, the most recent of which was commissioned in the 1980s. This is due to the financial challenge of deploying LDES at scale – with high upfront costs and no existing revenue guarantees – which has led to a lack of long-term investments into storage technologies.

Addressing this, DESNZ has proposed to implement a cap and floor mechanism which will guarantee investors a minimum level of revenue, open to all storage projects capable of supplying a minimum of six hours of electricity (excluding lithium-ion batteries). It is proposing two streams through which projects can apply – one for established technologies, and one for novel ones. To help design this mechanism, the consultation is seeking input from all interested stakeholders, including LDES project developers, investors and network operators.

DESNZ’s consultation will be open until March 5^th, 2024. If you’d like to have your say, you can learn more here.

A new report by the think tank Policy Exchange has highlighted the economic impact of wasted offshore wind power, costing the UK over £1 billion annually⁴.

Limitations imposed by grid capacity – primarily attributed to grid congestion and the slow deployment of storage technologies – mean that at times wind power must be curtailed or ‘turned off’, with potential renewable electricity going unused.

Despite upgrades underway to enhance grid capacity, Policy Exchange expects they could be outpaced by the development of new power sources. Instead, it suggests diverting curtailed wind power into the production of green hydrogen – a sustainable alternative to fossil fuel gas that can be produced using renewable electricity.

As a solution, Policy Exchange is recommending greater investment into electrolysers across heavily curtailed areas such as Scotland. Their research reveals that the volume of wasted wind generation in 2022 alone could have produced over 118,000 tonnes of green hydrogen. Looking ahead, that potential rises to 455,000 tonnes by 2029.

The solution has potential to aid the decarbonisation of hard to abate sectors, such as the UK’s steel manufacturing industry and, as the UK aims to expand its installed offshore wind capacity to 50GW by 2030, could help mitigate the impact of grid limitations – ensuring that wind generation does not have to be curtailed.

You can read Policy Exchange’s report here, or to learn more about new low-carbon technologies like green hydrogen that could be key to the net zero energy transition, you can read our latest e-guide by clicking here.

UK sees record-breaking year for installation of rooftop solar panels

The demand for rooftop solar panels by businesses and households across the UK has reached a 12-year high⁵. Last year, over 180,000 installations took place, while the number of installed heat pumps increased by 25% compared to 2022, signalling growing awareness and commitment to the adoption of sustainable technologies as the UK transitions to net zero.

You can find more information here.

Growth in global renewable capacity increases by almost 50% in 2023

In its Renewables 2023 report, the IEA has revealed rapid expansion among solar, wind and other renewable energy sources over the past year. Last year, the world increased construction of renewable capacity by almost 50% to nearly 510GW, marking a new record for growth. This has prompted the IEA to increase its prediction for the growth of renewable capacity over the next five years – an encouraging sign of worldwide progress towards the COP28 goal of tripling global renewable energy capacity by 2030⁶.

To learn more, you can read the IEA’s Renewables 2023 report by clicking here.

New consultation launched on proposed expansions to CfD scheme

The UK Government has published a new consultation seeking views on changes to its Contracts for Difference (CfD) scheme, which supports investment into renewable electricity by guaranteeing a price per unit of electricity generated. Proposals for Allocation Round 7 (AR7) include expanding the scope of CfD to co-located generation projects, as well as repowering projects, which are aimed at recommissioning and upgrading onshore wind infrastructure⁷. The Government’s consultation is open to all interested stakeholders until March 7^th, 2024.

To learn more about proposed changes to CfD, or to respond to the Government’s consultation, click here.

National Grid celebrates new grid connections in 2023

National Grid is celebrating the milestone grid connections it delivered in 2023, with notable projects including our parent company, Statkraft’s, Greener Grid Park – which will provide essential stability to help maximise the amount of renewable electricity that can be distributed through the grid⁸. Other milestones include connecting Dogger Bank – which will be the world’s largest offshore wind farm – as well as upgrading key infrastructure to enable the electrification of trains in Wales. The connection of over 3GW of ‘clean’ electricity projects paves the way to integrate more renewables onto the grid, faster, and marks continued progress in helping the UK meet its net zero ambitions.

You can read about more of National Grid’s key connections on its website.

New report predicts that AI will play a greater role in corporate decarbonisation

A new report, based on a survey of 100 business sustainability leaders, predicts that developing technologies such as artificial intelligence (AI), alongside other measures including circular procurement strategies and increased fleet electrification, will be key to corporate decarbonisation efforts this year⁹. Mitie, the facilities management and professional services company, have emphasised the potential significance of AI in enabling businesses to gather more frequent and efficient data on carbon emissions, facilitating faster and more effective decisions to enhance energy efficiency.

To learn more, you can read Mitie’s Net Zero Navigator 2024 report by clicking here.

If you have any questions on how any of the updates might affect your business, our team of experts is on hand to answer them. You can get in touch with us on 01217267575 or at heretohelp@brytenergy.co.uk.