UK Budget: Who Gets the Government Clean Energy Investments?

The UK's 2024 Autumn Budget, unveiled by Rachel Reeves, Chancellor of the Exchequer, promises a hefty chunk of money for decarbonisation. 

Rachel says: “To maximise the growth benefits of our clean energy mission, we have confirmed key investments, such as carbon capture and storage, to create jobs in our industrial heartlands.

“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.

“To bring new jobs to Britain and drive growth across our country, we are delivering our mission to make Britain a clean energy superpower.”

The UK Government’s support for carbon capture

One of the standout sustainability pledges of the budget is £3.9bn (US$5bn) of funding in 2025 and 2026 for CCUS Track-1 projects to decarbonise industry.

This investment aligns with the UK's Net Zero Strategy and the ambitious goal set out in the British Energy Security Strategy to capture and store up to 30 megatonnes of CO2 per year by 2030.

In 2019, the UK Government became the first major economy to pass a net zero emissions law, committing to achieving this by 2050.

This came after recommendations from the Committee on Climate Change, the country’s independent climate advisory body.

The East Coast Cluster’s CCS and hydrogen

The East Coast Cluster, encompassing the industrial regions of Teesside and Humber, is set to be a major beneficiary of the 2024 budget’s investment. 

With the potential to transport and store nearly 50% of all UK industrial cluster CO2 emissions, the East Coast Cluster could make a big difference in the efforts for net zero.

The cluster was selected as one of the UK’s first CCS projects in 2021 by the government and aims to create an average of 25,000 jobs per year between 2027 and 2050.

It contains three projects:

• Net Zero Teesside Power
• bpH2Teesside
• Teesside Hydrogen CO2 Capture

Two of these projects are led by bp, and Net Zero Teesside Power is a joint venture with Equinor.

Upon the announcement, Louise Kingham, Senior Vice President, Europe and Head of Country, UK at bp, said: “The East Coast Cluster can play a critical role in the UK Government’s levelling up ambition, supporting thousands of jobs and investing in local communities. 

“Teesside and the Humber were once the industrial heart of the UK. Today’s announcement paves the way for them to become the green heart of the country’s energy transition, shepherding in the next generation of industry and ways of working.”

Net Zero Teesside is a £4bn (US$5.2bn) venture to create a natural gas-fired power plant with carbon capture integrated. 

It is being created with collaborative effort from industry leaders including GE Vernova, bp and Technip. 

Roger Martella, Group VP and Chief Sustainability Officer at GE Vernova, says: “We’ve been selected to provide the turbines for the Teesside Project, which will be the leading carbon capture demonstration project in the world as it moves forward.

“Our turbines probably move air faster than any equipment in the world, so this isn’t any old carbon capture technology. 

“We have to build the most complex and industrialised carbon capture technology.”

bpH2Teesside aims to produce around 160,000 tonnes of low carbon hydrogen per year, enough to displace existing natural gas consumption by industrial emitters in the area.

CCS and hydrogen in the HyNet Cluster

The HyNet Cluster in the North West of England and North Wales is another key beneficiary of the budget's clean energy focus.

This project aims to create comprehensive infrastructure for producing, transporting, and storing low carbon hydrogen, as well as capturing and storing carbon dioxide emissions from industry.

HyNet contains five projects:

• Hanson Padeswood Cement Works Carbon Capture and Storage Project
• Viridor Runcorn Industrial CCS
• Protos Energy Recovery Facility
• Buxton Lime Net Zero
• HyNet Hydrogen Production Plant 1 (HPP1)

The Padeswood cement works in North Wales is owned by Heidelberg Materials. 

The company says that the “only way to produce the cement that the UK needs, without emitting large amounts of carbon, is to capture and store these emissions”.

Mitsubishi Heavy Industries and Worley were awarded a contract for the front end engineering design of the Padeswood CCS project.

Simon Willis, CEO at Heidelberg Materials UK, said: "This is a decisive next step in our plans to install carbon capture technology at our Padeswood cement works.

“Once operational, it will provide net zero building materials for major projects across the country, enabling us to help decarbonise the construction industry and meet our ambition to become a net zero business."

In April 2024, Viridor committed more than £20m (US$25.9m) to its Runcorn CCS project. 

Contracts for its development were awarded to Technip and Fichtner.

Technip will provide a design using its Canopy by T.EN solution powered by Shell CANSOLV CO2 capture technology.

James Eyton, Head of CCUS at Viridor, says: “Our Runcorn CCS project is accelerating into a very exciting phase of design development and, with new levels of investment and the signing of these two major contracts, we are in a strong position to take a big step towards bringing this project to reality. 

“We have a strong team to deliver upon our objectives at this stage of the project. Deliverability is an essential goal, which Technip Energies’ well proven Shell CANSOLV® CO2 capture technology has the potential to achieve, with Fichtner on hand to provide depth of engineering expertise and assurance of delivering value for taxpayer money.”

Make sure you check out the latest edition of Energy Digital Magazine and also sign up to our global conference series - Sustainability LIVE 2024

Energy Digital is a BizClik brand