Energy and Utilities

The Energy Transition | BEIS disbanded in government shake-up

Published on 13th Feb 2023

Welcome to our top picks of the latest energy regulatory and market developments in the UK's transition to net zero.

This week we look at the break up of BEIS, funding for green flight technologies, the government's new body for fusion energy and funding for the decarbonisation of the maritime sector.

Government establishes Department for Energy Security and Net Zero

On 7 February, the Prime Minister announced that the Department for Business, Energy and Industrial Strategy (BEIS) had been broken up as part of his cabinet reshuffle. Four new departments have been established in its place: the Department for Energy Security and Net Zero; the Department for Science, Innovation and Technology; the Department for Business and Trade; and the Department for Culture, Media and Sport.

The Department for Energy Security and Net Zero will be tasked with ensuring Britain's long-term energy supply and managing rising costs and inflation while focussing on delivering net zero. The department will be led by Grant Shapps, formerly the secretary for BEIS. The announcement comes after Chris Skidmore's independent review of net zero, which recommended that the government establish an "Office for Net Zero Delivery" by spring 2023 in order to properly manage the cross-departmental priorities for net zero. In the review, the Institute for Government commented that "a lack of joined-up policy making has often undermined cross-government ambitions."

Government announces funding to support green flight technologies

The government has announced £113 million in funding to support green flight technologies, including the development of hydrogen and all-electric technologies such as electric flying taxis and hydrogen powered aircraft. Initiatives that will receive funding include Vertical Aerospace's mission to develop lightweight batteries and Rolls-Royce's development of a liquid hydrogen combusting jet engine. The government intends that the investment will also support green jobs across the UK and generate additional private investment.

The programme, run by the Aerospace Technology Institute, has already helped deliver the first flight of a hydrogen fuel-cell powered aircraft in January 2023. Other recent aviation developments include awards from an £165 million Advanced Fuel Fund to build solutions that will enable companies to convert household and industrial waste into fuel. Virgin Atlantic will also receive government funding in a bid to complete the first net zero transatlantic flight on 100% sustainable aviation fuel later this year.

The funding will be announced at the seventh meeting of the Jet Zero Council – a government and industry partnership established to help achieve the ambitions set out in the government's Jet Zero Strategy. Transport Secretary Mark Harper commented that the "Jet Zero Council is helping to define the future of flying – one that’s more optimistic about the sector’s environmental impact while putting UK innovation at the forefront of international aviation."

UK government announces new body to deliver fusion energy

The government has announced a new delivery body for the UK's fusion programme which will be named UK Industrial Fusion Solutions Ltd. This body is to be formed over the next 18 months and will be established as a programme delivery organisation.

The purpose of this new body is to deliver a prototype fusion energy plant at West Burton in Nottinghamshire. The prototype plant is due to complete construction by 2040 to demonstrate the ability to use fusion energy to generate electricity for the UK grid.

In a fusion reaction, two light nuclei (such as hydrogen) are fused together under extremely high temperatures and pressure to form heavier nuclei i.e. helium. This is different to the fission reactions currently used in nuclear power stations where heavy and unstable atoms are split apart to produce energy. The energy from fusion reactions can be used to generate electricity in a way that is far more efficient and low-carbon than traditional fossil fuel generation, for example, burning coal, oil or gas, and does not produce the same radioactive by-products as fission.

The government hopes that this programme will encourage the commercialisation of fusion as well as the development of more plants worldwide. Science and Innovation Minister George Freeman commented that "[f]usion energy now has the potential to transform our world for the better by harnessing the same process powering the sun to provide cheap, abundant, low-carbon energy across the world." This follows recent breakthroughs announced in fusion energy as reported on here.

UK government announces £77 million to decarbonise the maritime sector

The UK government has announced a £77 million boost to assist the decarbonisation of the UK's maritime sector. The funding is intended to create thousands of new jobs and to enable zero-emission ferries, cruises and cargo ships to set sail within two years. This is the first funding of its kind in the UK. The funding will aim to ensure that the already developed technology makes it "from the factory to the sea", whilst also identifying projects which could have a long-term impact on reducing emissions in this sector.

The funding will be delivered via the Zero Emission Vessels and Infrastructure (ZEVI) competition which was launched on 6 February 2023. Successful projects must show that the funds could be used to work with major UK ports and operators to launch a zero-emission vessel by 2025 at the latest.

Examples of technologies that may assist in delivering this objective include the development of battery electric vehicles, shoreside electrical power, ships that run on low carbon fuels and wind-assisted ferries. The government hopes that investment in these technologies will develop a wider green maritime sector and also inform future policy and regulation in this area.

The funding will be made available until March 2025, with project partners covering all costs in an operational environment until March 2028. In addition the government will be providing £7.4 million of funding to UK universities to join forces and establish a Clean Maritime Research Hub. This hub will build expertise in the maritime sector and support skills development across the industry.

This article was written with the assistance of Saskia Zant-Boer and Hannah Wooderson, Trainee Solicitors.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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