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Report says UK throwing away lead in low carbon technology

The UK is in danger of throwing away its chance to be a world leader in low-carbon technologies, manufacturers warn today.

Recent data shows a decline in Britain’s low-carbon and environmental manufacturing sector while the government’s research budget in this area is among the lowest in the developed world as a proportion of R&D spending, according to a new report from manufacturers’ organisation EEF.

The report, entitled Tech for growth: Delivering green growth through technology, argues that the government needs to increase spending on energy and environmental research and more clearly identify and focus on low-carbon technologies that could increase UK export opportunities.

It also calls on the government to give a clearer picture of how it expects manufacturers, particularly in carbon-intensive industries, to play a role in cutting emissions, in order to improve regulation and increase investor confidence.

Susanne Baker, EEF’s senior climate and environment policy adviser and author of the report, told The Engineer that the government needed to address the market failures around low-carbon technologies, arising from uncertain demand and infrastructure needs.

‘We had a real opportunity – we were the first country in the world to have a Climate Change Act – so we should be market leaders, we should have first mover advantage, but we see that slipping away,’ she said.

‘There’s still a massive opportunity for UK plc but we need to be focused. Speaking to our members, there’s a lot of different activity in different areas but it seems very uncoordinated, very fragmented and there’s a feeling that people aren’t sure where government is going to focus.’

Government figures show the UK’s low-carbon and environmental manufacturing sector actually contracted by one per cent in 2010/11 compared to the previous year, while there was significant growth in the sector in China (29 per cent), the US (17 per cent ) and South Korea (19 per cent).

The UK government allocated 3.71 per cent of its R&D budget to energy and environmental research in 2010, one of the lowest figures in the OECD (although ahead of the US).

EEF’s report calls on the UK to match the OECD average for research spend in this area, to make clearer the roles and activities of its various low-carbon innovation bodies and funding schemes, and to improve the pipeline of skilled workers into the research sector.

The government also needs to produce a clearer vision of how it wants the manufacturing sector to decarbonise, the report said, in order to reassure investors that Britain’s industries will be supported as the country decarbonises, thereby helping companies prepare to invest in new technology and navigate regulation.

Baker said this was most important for industries that emitted greenhouse gases as part of their manufacturing process, because decarbonising electricity production had already to a large degree been addressed.

‘We want a long-term vision that will drive action in terms of how we regulate those sectors, and what activity to encourage and stimulate,’ she said.

‘2050 seems a long way off but for some of these sectors it’s only one or two investment cycles, so we need to trial and demonstrate and deploy technologies for those sectors and some of them will need bespoke sectors.’

The report also called for a review of climate policy as part of this year’s spending review in order to create a single regulatory framework for manufacturing, and greater focus on how companies would fund decarbonisation through initiatives like the Green Investment Bank.

Readers' comments (7)

  • There is enough energy in the north atlantic within our territorial waters to supply us with all the energy we need TWICE OVER FOR EVER!!
    Why the hell aren't we straining at the leash to exploit this one?????

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  • The support for marine renewables - one of the potential stars of the clean energy mix - is hopelessly disorganised, with multiple disconnected funding bodies - DECC-ORED, Carbon Trust, TSB, ETI, EU, DECC-Entrepreneurs Fund, WEFO, Scottish Govt etc etc. It is almost impossible to keep up with all of these, but not as impossible as getting funding for the higher risk long-term solutions such as multiple turbine semi-submersible systems. Then there is the uncertainty as to what will replace ROCs in 2017 - no-one can plan for a large investment because no-one knows what the rates will be. AND THEN FINALLY there is the permitting nightmare... at present the process for consenting a single demonstrator is as cumbersome - thanks to the EU Habitats Directive - as for a 100MW offshore windfarm, taking 18+ months and costing upwards of £1m. It is bureaucracy gone mad!

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  • Every time energy is talked about it is largely about how hard it is to get HMG to support a technology, largely one suspects through ignorance of the subject. The UK needs an entirely independant 'Technology Panel' comprising seconded, qualified engineers on a (3 year?) rota. HMG must guarantee non-interference and provide significant budgeting. UK manufacture of approved projects could also be mandated. If the EU don't like this, tell them to audit all other countries for compliance to EU rules before making the UK follow it's idiotic utterings.

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  • If ever the Government were to recoup the money spent on RBS, it should put it all towards a renewables R & D and investment fund. Considering what UK engineers and scientists accomplish with so little, imagine what could be done with a relative lot. It could potentially leave a legacy to dwarf the incompetence/greed of our financial industry.

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  • If climate change is as serious a problem as the informed scientists say, we should be spending far more across the board to tackle it. In low carbon R&D, renewable energy deployment, building renovations, etc. As well as adaptation.

    Stern talked about spending 1% of GDP to contain climate change. Conservatives like Lilley and Lawson begrudge even that. I understand in WW2, we committed between 40 and 50% of GDP to the war effort. Something of a gap? How serious are we?

    As for the ridiculous planning application delays for wind farms! You got there first John Armstrong. Would Churchill or Rooselvelt have accepted an 18 month delay on permission to build a tank factory?

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  • The Engineer Poll this week reports that "40-year energy price deals are reportedly being offered to attract investors to nuclear power", and asks us how we think energy should be funded.

    My answer, for which I was disappointed to find no tick box, is that ideally investment decisions should be made by the free market and without state bias towards a particular outcome.

    However, in this case we have a situation in which massive investment is needed to clean up our energy supply. There are many contenders and the advancing state of these technologies means that it's hard to pick the winner at this stage of the race - to back the wrong one in a free market is to risk being outcompeted for several decades. No wonder investors are wary.

    I suggest that the government broaden any long-term price guarantee to encompass the whole clean energy market.
    And to get us the best deal they could hold a kind of auction, where the offered subsidy begins at a low price and begins to rise. When a contender believes that the offer has reached a level at which he'll be profitable, he can contract to supply an amount of energy at that price. This process would continue until sufficient contracts have been made to meet our energy needs.

    All bids would need to be accompanied by a realistic business plan that covers the whole life-cycle of the plant.

    Securing such contracts would allow investors to proceed with their projects, safe from being priced out of the market by superior emerging technology.

    I think this system would capture the advantages of the free market. For the state to pick a particular technology such as nuclear, is surely the road to unnecessary expense.

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  • I agree with a lot of the sentiment going around, but we are straying from the point. Did we ever have a lead in Renewables. No we did not. Who did? the Germans and Danish. So we never had a lead to lose. In fact we are playing catchup and import substitution. Only in areas such as wave and tidal can we even begin to think we can lead the market.
    We have lost the floating wind market. Not for want of trying; I did try getting my idea off the ground, but fell into the develpment catch 22; Desperate for funding, but too small to get funding. :(

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