CCC urges government to protect low-carbon funding

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The government should protect funding for low-carbon technologies developed in the UK to avoid missing emissions-reduction targets and green economic growth.

This was the advice of the independent Committee on Climate Change (CCC) in its report to the government’s chief scientific advisor, Prof Sir John Beddington, who requested the review in October 2009. The report’s release comes the week after the Department of Energy and Climate Change’s announcement that it will make £34m worth of cuts to its low-carbon technology programme.

Without government support, the CCC stated that a range of essential low-carbon technologies is likely to get stuck in a so-called ‘valley of death’, where development is curtailed and will fail to make it to market.

According to the committee, new low-carbon technologies will be vital in generating cleaner forms of electricity, which can then be used for electric vehicles and heating, and in delivering energy-efficient buildings − areas that will make a very significant contribution to meeting the 2050 target to reduce emissions by 80 per cent, relative to 1990 levels.

The committee concluded that any reduction in current funding levels, which is approximately £550m a year, would increase the risk of missing carbon budgets and would see the UK losing out on critical opportunities to build a green economy.

Once financial pressures have eased, the CCC stated that increased funding will be required in specific cases, such as marine technologies and electric vehicles, and for low-carbon innovation more generally, over the next decade.

According to the committee, the UK’s spend on energy research, development and demonstration (RD and D) as a per cent of GDP lags behind other developed countries. This situation, it says, is even more worrying in the context of global investment in technology development that is low relative to benchmarks proposed by the Stern Review, the International Energy Agency and the EU.

‘The case for action is strong,’ said Prof Julia King, member of the Committee on Climate Change. ‘With adequate funding, new policies and strengthened delivery arrangements, we would expect UK firms to take leading roles in the development of key technologies, driving down emissions to meet carbon budgets and targets, and fulfilling the new government’s clear objective to build a low-carbon economy. We urge the government to put the appropriate low-carbon technology support arrangements in place to unlock environmental and wider economic benefits.’

The opinion was echoed by industry leaders. Dr Neil Bentley, CBI director of business environment, said: ‘This report is a timely, but uncomfortable, reminder that we are simply not making fast enough progress in tackling carbon emissions. Time is running out; we need to see urgent decisions from the new government. The electricity market needs reform, to deliver a diverse, affordable low-carbon energy mix as quickly as possible, and a cost-effective way must be found of persuading householders to make their homes more energy efficient.’

In regards to the cuts the government has said it would make to low-carbon technology programmes, Tom Foulkes, director general of the Institution of Civil Engineers, added: ‘We recognise cuts have to be made and that no sector can be completely immune to this. However, it is even more important in these cash-strapped times that government provides the right regulatory frameworks to encourage private investment into infrastructure projects. Low-carbon technologies in particular need to be developed with urgency to facilitate our shift to a low-carbon economy.’

Focus on deployment

The committee presented recommendations for what the UK could do in terms of supporting technology development. It called for focus on the development and deployment of at least six technologies.

Offshore wind was deemed by the committee to be the least costly path for decarbonising the power sector and meeting the UK’s 2020 15 per cent renewable-energy target. The UK requires 13GW of offshore wind capacity to be developed, requiring up to £50m a year in funding RD and D.

The CCC stated that the UK has the potential to be a world leader in the area of wave and tidal energy, and has significant natural resources, estimated at 65GW a year. It also noted that UK-based companies have world-leading expertise in marine engineering and design.

Carbon Capture and Storage (CCS) technology to remove carbon from coal and gas power generation will be crucial to meeting the target, according to the CCC, which pointed to the UK’s expertise in subsurface evaluation and geotechnical engineering because of the North Sea oil and gas developments.

The committee added that the UK also has research expertise and industrial capabilities in key smart-grid technologies, including electrical machinery, power electronics and communications.

Electrical vehicles was one area where funding especially needs to be ringfenced, the committee said, because the UK has the expertise to design and build electric cars.

Funding needs to be protected for the purchase of electric cars (£230m) and to support the development of a national battery-charging network (£30m), the CCC stated. It estimated that investment of up to £800m will be required to meet the CCC’s target to have 1.7 million electric cars on the road by 2020.

The CCC also said there needs to be more support for more environmentally friendly aviation technology. The committee said that UK-based companies are globally competitive in the design and manufacture of advanced wings and aeroengines. Public support for radical technologies, such as the blended wing, will be necessary to achieve UK targets.

In its final recommendations, the CCC stated that there is a need to deploy nuclear power, advanced insulation technologies, CCS for industry and heat pumps. The UK should invest in research and development of hydrogen fuel-cell vehicles, technologies in agriculture and industry, third-generation solar PV technologies, electricity storage and advanced bio-fuels technologies.

Conclusions and complexity

The committee concluded that there is a lack of clarity in the institutional landscape that supports low-carbon innovation. The report stated: ‘The funding environment is complex and can be difficult for business to navigate. A strengthened institutional framework – with clear objectives, desired outcomes and responsibilities, and improved monitoring and information flows – is required to ensure that public money is well spent and to increase investor confidence.

‘The challenge for the new government is to set a clear strategy out to 2050, to focus resources on the right suite of low-carbon technologies and guide the various delivery bodies to ensure that public funding delivers long-term environmental and economic benefits.’

While the report has been viewed as a step in the right direction, the Institution of Engineering and Technology said that there are weaknesses in the CCC’s arguments. It stated: ’The report neglects the fact that new energy technologies fail to deliver in practice unless attention is given at an early stage to wider engineering issues, such as how to deliver the power to customers and how to integrate new technologies into the existing energy system. New technologies do not simply connect to the power system, they have to become an integrated part of it. The report has little to say about this key aspect.

’The key issue of government leadership to focus companies and their management is not addressed to an adequate depth in the report. The government should set out the high-level outcomes needed and ensure the necessary adjustments to markets and regulatory frameworks.

’It is not clear where the coalition can safely make cuts. We encourage government to reconsider the budget reductions in this area, taking a long-term view that avoids stop/start developments and adds new focus on the engineering aspects of practical implementation and operation.’

Tom Delay, chief executive of the Carbon Trust, welcomed the report and agreed with its call for ‘continued and expanded funding for wise, focused and output-driven low-carbon innovation’.  

‘Good innovation that leverages private-sector investment and focuses on UK benefit is a must,’ he stated. ‘It will deliver significant economic opportunity for the UK, as well as helping us meet our short- and long-term carbon targets.’

This view was echoed by Prof Sir John Beddington, who stated: ‘Innovation will be enormously important if the UK is to meet its climate-change goals and to do so affordably. We need to develop and deploy the most promising low-carbon technologies quickly across all sectors. In times of austerity, we must also make sure we invest public money to maximum effect. I welcome the Climate Change Committee’s advice in this critical area.’