Low Carbon Technology Commercialisation
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Speech by Gregory Barker, Minister of State, on the role of measurement in the acceleration of green technologies.
Good morning, it’s a real pleasure to be here today to talk about the opportunities and challenges in commercialising new low carbon technologies.
Thank you to the NPL Centre for Carbon Measurement and the Energy Technology Institute for organising a forum on this important topic.
Earlier this year, I had the opportunity to visit NPL and witness first-hand some of the amazing research they do.
Such as new ways to measure carbon emissions and spot leaks from fracking and carbon capture which will be critical for building trust and public acceptance.
Both NPL and ETI are working directly with SMEs and large industrial companies supporting them to bring their innovations to market.
There are 3 key points I would like to make in my speech today:
Firstly, that low carbon innovation is a huge opportunity for the UK – both for growth and for greening our planet.
Secondly, there still remain several challenges to overcome to capitalise on innovation.
Thirdly, collaboration between Government and innovators will be key.
To my first point, UK innovation in low carbon technologies is a fantastic opportunity for the economy.
A key driver of future growth.
To quote comments made by the Prime Minister earlier this year, he said:
“Make no mistake, we are in a global race and the countries that succeed in that race … are those that are the greenest and the most energy efficient.”
Indeed, recent growth figures show that green investment is paying back in spades and helping the UK to stay ahead in this global race for jobs and growth.
According to the CBI last year at least one-third of the UK’s recent economic growth was likely to have come from green business.
In 2011/12, the UK enjoyed a £128 billion share of the low-carbon and environmental goods and services sector (LCEGS).
Where the international market is worth £3.3 trillion.
The UK is sixth in the global LCEGS market and the sector employs close to a million people.
The key to this progress has been our unrelenting focus on driving innovation up while driving costs down.
We must capitalise on this and continue to innovate to maintain our competitive advantage.
In addition, meeting our 2050 carbon targets will require rapid and large-scale changes in energy efficiency, electricity generation, heating, transport and industrial processing.
But equally the Coalition understands the pressure rising energy bills are putting on hardworking families up and down the country.
Cost savings through innovation are helping to cushion consumers against the upward trend in energy prices.
Over the next 40 years, the ETI’s ESME model suggests that savings to the UK economy could be up to £600 billion .
So the opportunity is there.
But how do we ensure the UK takes it?
This brings me to my second point, that by understanding the challenges we need to overcome, we can capitalise on our innovation.
The 3 key challenges we face are:
To take the first of these, skills:
The UK has a world class research base built on the skills of our scientists and engineers underpinned by a yearly 6 billion pound research budget.
We need to capitalise on the opportunity this investment in our research capacity brings.
A few months ago a report published by Shell Springboard and the Carbon Trust showed that small businesses account for more than 90% of the UK’s low carbon sector!
We can help these businesses grow and benefit from the jobs they will create.
A second challenge innovators face is securing financing at the right time and throughout their development journey.
This is a particular challenge for smaller businesses who are not generating sufficient revenue to borrow from banks and the complexity of their technology is unlikely to be widely understood.
It is in our interest to ensure companies can find the help they need within the UK so that we can benefit from their innovation.
The final challenge, which is closely tied to costs, is risk.
New technologies have inherent risk.
They are untested; trust needs to be built through the generation of a track record or through independent performance verification and certification that a technology will work.
A good example is technologies trying to break into the notoriously non-innovative domestic and non-domestic buildings efficiency market.
If we can help reduce this risk we will speed the uptake new technologies.
And encourage further private investment .
To my final point, collaboration between government and innovators is essential.
Programmes all across government aim to help transform small businesses into high-growth businesses.
The Department for Business Innovation and Skills runs a ‘Growth Accelerator’ programme providing coaching support to businesses from every sector.
And DECC’s Energy Entrepreneurs Fund provides incubation support alongside project grants to ambitious high growth potential companies.
Under the first phase of the programme we are funding 30 projects to support young innovative enterprises develop low carbon products.
Two examples are Radfan and Ultramo.
Radfan is being funded to develop and market a radiator mounted fan to make room heating more efficient.
Ultramo is being supported to develop a new type of highly efficient engine.
The second phase of the Energy Entrepreneurs Fund has recently closed and we will have a whole host of exciting new projects to announce soon.
Overall, DECC schemes are contributing to growth in more than 100 entrepreneurial companies.
And in the past year alone, I have announced DECC funding for a number of innovative technologies including £6.3 million for offshore wind components £19 million for energy storage £5 million to integrate UK nuclear research infrastructure the world’s first Renewable Heat Incentive. And £10 million for energy efficiency technologies through the ‘Invest in Innovative Refurbishment’ programme,
In addition, the ETI have helped build a 15 megawatt drive train testing facility at the National Renewable Energy Centre near Newcastle.
And Samsung will soon be the first manufacturer to use the facility.
These last two programmes are great examples of government support to help companies test and demonstrate their products specifically to reduce that ‘new technology’ risk and help them enter the market.
We are also working across government and all the public sector funders of innovation have come together to form the Low Carbon Innovation Coordination Group (LCICG).
Together we will provide 1 billion pounds between 2011 and 2015 to directly support energy innovation.
To identify how best to identify and target our support the LCICG has published a series of Technology Innovation Needs Assessments (TINAs).
These reports cover technologies from domestic buildings to energy storage and new nuclear with the 11th report on hydrogen to be published shortly.
The LCICG are now building on the TINAs to develop a strategy, due to be published later this year which will lay out a shared vision of public investment principles approach and technology improvement priorities between now and 2020.
The strategy will deliver greater confidence to the energy sector supporting de-risking and alignment of investment.
And we will work with innovators and private investors to build development pathways and flexible finance so companies can secure the help they need to grow.
These are just a few examples of where Government is collaborating with industry and I hope that today we can learn more from innovators and investors about particular challenges in this area.
In conclusion, low carbon innovation is a huge opportunity for the UK there are challenges we need to overcome and collaboration between business and Government will be central to this.
This Government plays a key role as an enabler.
But it is our scientists, engineers and entrepreneurs that are the sources of innovation.
It is your ideas that will reduce energy costs, create jobs and stimulate growth.
It is a diverse landscape and transforming our economy is a broad and complex challenge but to borrow another quote from the Prime Minister:
“Together we can make Britain a global showcase for green innovation and energy efficiency”