Chancellor’s “reset” to clean up the UK’s domestic energy supply and secure long term energy security, while delivering up to 50,000 highly skilled jobs is expected this week.
At Wednesday’s Spring Budget the Chancellor, Jeremy Hunt, will set out an unprecedented investment in domestic carbon capture and low carbon energy. Recognising the urgency of the UK’s clean energy revolution, he will commit to spades in the ground on these projects from next year.
No one country has yet captured the carbon capture market. The UK has enough carbon capture capacity to store over a century and half of national annual CO2 emissions, making it one of the most attractive carbon capture markets on earth, creating high-paid jobs of the future across the UK and growing our economy through new cutting-edge industries. Carbon capture will support the UK’s industrial transition to cleaner, greener processes and technology.
An unprecedented £20 billion in investment over the next 20 years will drive forward projects that aim to store 20-30 million tonnes of CO2 a year by 2030, equal to the emissions from 10-15 million cars helping us meet our carbon capture targets as part of our national net zero targets.
The Chancellor will also announce plans to boost nuclear power generation through Great British Nuclear, launching a competition for this country’s first Small Modular Nuclear Reactors, revolutionising how nuclear projects are delivered in the UK.
Chancellor of the Exchequer, Jeremy Hunt said:
“Without Government support, the average household energy bill would have hit almost £4,300 this year, which is why we stepped in to save a typical household £1,300 on their energy bills this winter.
“We don’t want to see high bills like this again, it’s time for a clean energy reset. That is why we are fully committing to nuclear power in the UK, backing a new generation of small modular reactors, and investing tens of billions in clean energy through carbon capture.
“This plan will help drive energy bills down for households across the country and improve our energy security whilst delivering on one of our five promises to grow the economy.”
Energy Security Secretary, Grant Shapps said:
“Putin’s illegal invasion of Ukraine has demonstrated to the world the vital importance of increasing our energy security and independence – powering more of Britain from Britain and shielding ourselves from the volatile fossil fuels market.
“Already a global leader in offshore wind power, we now want to do the same for the UK’s nuclear and carbon capture industries, which in turn will help cut the wholesale electricity prices to amongst the lowest in Europe.
“Today’s funding will play an integral role in delivering that, helping us further towards our net zero targets and creating green jobs across the country.”
Small Modular Reactors are emerging technology, and no country has yet to deploy one. To ensure the UK steals the march, the Small Nuclear Reactors competition is expected to attract the best designs from both domestic and international manufacturers with winners announced rapidly. The government will also match a proportion of private investment as part of this to ensure designs are ready to be deployed as soon as possible in the UK.
The government is already investing £210 million into the Rolls-Royce SMR project, matched by private sector funding. Rolls’ Royce reactor design is currently being assessed by safety regulator, the Office for Nuclear Regulation.
Great British Nuclear will streamline and coordinate the delivery of new nuclear power plants to meet the country’s ambition of up to 24 Gigawatts of nuclear power by 2050.
The government body will select sites for potential nuclear projects, removing costs, uncertainty, and bureaucratic barriers for manufacturers as they develop their proposals. To support future sites for nuclear development, the Government will also be consulting on a new approach to nuclear site selection later this year.
There will also be a laser focus on how to attract more investment into the sector, with the Chancellor confirming that nuclear power generation will be classed as “environmentally sustainable” under the green taxonomy regime, subject to consultation, encouraging significant private investment. Last year, the Chancellor confirmed reforms to EU-derived Solvency II regulation, which will unlock £100bn of private investment into infrastructure and clean energy over a decade.
We’ve already invested a historic £700 million stake in Sizewell C – our first investment in a nuclear project for 35 years – to provide reliable, low-carbon, power to the equivalent of 6 million homes for over 50 years. This will shore up UK energy security and create 10,000 skilled jobs, while we also continue to bring Hinkley Point C to completion, the first new nuclear power station in a generation.
We have already committed £1 billion to develop four CCUS hubs in the UK by 2030, but with today's funding, we are providing industry with the certainty required to deploy CCUS at pace and at scale.
This is all part of our plans to transform our homegrown energy supply, investing in renewables and nuclear power, and maximising North Sea oil and gas production as we transition to net zero. All of which crucially brings skilled jobs, prosperity, and growth as we build a cleaner, greener, more secure economy.