Speech

The role of energy innovation in helping the UK to meet its low carbon and energy security goals

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Speech by Greg Barker at the Low Carbon Innovation Coordination Group Strategic Framework Briefing and Networking Event.

Thank you Paul.

Innovation is absolutely crucial to achieve this Coalition Government’s energy goals. But innovation isn’t just at the heart of my department’s agenda.

Driving innovation throughout the UK economy is at the very heart of the Coalition’s Long Term Economic Plan.

The UK has many strength’s in this area and we are delivering some very exciting projects.

So it is a pleasure to be here today to open this Briefing and Networking Event on the LCICGs Strategic Framework: “Coordinating Low Carbon Technology Innovation Support.”

You will hear about some of the detail of this Strategic Framework from Rob later on but I’d like to make 3 key points here today:

  • Firstly, innovation is critical to achieving both our energy goals and sustained UK growth… And we are making significant investments to support this;

  • Secondly, genuine partnership is crucial.

We in Government, industry and academia need to work together to achieve these goals.

Government is helping this happen through the LCICG.

We have a coordinated programme of energy innovation funding that is providing over £1 billion of support in this Spending Review period;

  • Thirdly, the choices we make now on priorities, funding and strategy will be critically important.

I am keen to work with you in identifying the technologies that will make a real difference to the UKs energy system and our economic prosperity.

To my first point:

The Coalition very much recognises the important role innovation will play in the long-term future of the UK economy.

Innovation will lead to new technologies, new jobs and new opportunities.

Around 70% of our future economic growth is expected to come from innovation and the low carbon sector is set to make a major contribution to this.

New and improved low carbon technologies are essential to reduce the cost of energy for hard-pressed consumers.

And innovation here in the UK could help our companies secure a large share of the global market.

And that market for low carbon goods and services is potentially huge.

By targeting our innovation support and fulfilling our innovation goals we could save the UK over £100 billion in energy costs to 2050.

For example, targeted innovation in energy efficiency alone could lead to savings worth up to £2,500 for each UK household and business up to 2050. That’s enough to build 14,000 community hospitals or over 5,000 new schools.

That same investment could generate UK-based business activity contributing tens of billions of pounds to GDP over the same period.

This Government has recognised the huge potential of this sector.

Despite the challenging economic climate over the past few years, we have continued to invest in supporting businesses and academics delivering energy innovation.

In this parliament, the members of the LCICG are expected to invest in excess of £1 billion in support for low carbon innovation. And we continue to provide additional funding where appropriate.

Just last week the Chancellor announced an additional £60 million investment in low carbon innovation.

That funding will support advanced carbon capture and storage technologies that show significant potential to reduce the cost of low-carbon generation in the UK. This will capitalise on the most promising CCS technologies coming out of the Government’s current £125 million CCS Innovation Programme.

Now to my second point:

The Government supports low carbon technology innovation in different ways through a range of public-sector backed organisations.

This means we can provide the range of support that this diverse sector needs. But it’s important that this support is complimentary and well-coordinated. That’s why, 4 years ago, David Willets and I supported the establishment of the Low Carbon Innovation Coordination Group. And we have overseen the Group’s work since.

The LCICG brings together the major public-sector backed funders of low carbon innovation in the UK.

The Group aims to enhance the focus, coordination and delivery of government backed innovation support.

Working together, the Group has supported innovators in universities, SMEs and industry, in delivering many transformational projects and programmes.

For example:

DECC’s £5 million support to Net Power’s novel power generation process, aims to help develop a technology that has the potential to generate electricity substantially cheaper than existing CCS technologies.

This could be really significant for our long term low carbon energy objectives.

The Off Shore Wind Accelerator is a great example of industry pooling its resources and working together, with government support, to address common challenges.

This £45 million programme is 2 thirds funded by industry and 1 third funded by DECC, and managed by the Carbon Trust.

It brings together 9 major off-shore wind developers to identify and support projects that can drive down the cost of off-shore wind.

These projects have the potential to reduce the cost of off-shore wind by up to 10%.

The Engineering and Physical Sciences Research Council EPSRC is training the engineers and scientists that are critical to our future success.

In Energy, they are currently funding 12 Centres for Doctoral Training, involving over 100 industrial partners. And a further 12 centres have recently been announced and will start taking students in October this year.

Industry-Industry and Industry-Government partnerships are key to our collective success.

The Energy Technologies Institute shows what can be achieved if companies work in partnership with each other and with government.

ETI’s 6 private sector members and the government are together investing up to £60 million a year. And are delivering major projects that will have a real impact across a range of energy technology sectors.

Take, for example, the Marine ReDAPT project.

This technology initially received Research Council and Technology Strategy Board support at a smaller scale. ETI funding built on that in developing into a full scale 1MW tidal turbine project. The technology is now owned by Alstom who have an MOU to deliver the first four machines to Scottish Power Renewables in the next couple of years.

To support industry the Technology Strategy Board has recently established a number of Catapult Centres.

Catapults will provide expertise and support structures, such as testing facilities, will foster collaborations and will help companies prove and exploit their innovations.

For example, the Off-Shore Renewables Catapult is working very closely with Narec, the Carbon Trust and industry to set up testing and demonstration programmes.

A new Energy Systems Catapult is being developed for launch in 2015 - 16.

These are just some of the many exciting projects that the LCICG, industry and academia have supported.

Working together we have achieved a lot in recent years but we still need to do more.

This brings me to my third and final point;

Looking forward I am keen to ensure we build on these effective collaborations and that we target government support to maximum effect.

So, I was pleased last month to announce the publication of the LCICG’s Strategic Framework. For the first time, the Framework sets out a coherent, shared, cross-government strategy and our long-term energy innovation ambitions.

However, the Framework also makes clear a key challenge that we face.

Although our economy is on the up, the UK government alone cannot afford to develop all of the low carbon technologies that we might need.

To address this, we need industry to step-up your activities and find innovative ways to partner and burden share. As we are successfully doing in the Off-shore Wind Accelerator and the Energy Technologies Institute.

We also need to work more closely with other countries who share the same challenges.

As we prepare for the next spending round in 2015 we in government will need to make some tough choices. We will need to target our public-sector investments.

We need to focus where we can have the most impact on achieving our energy and emissions targets and our economic growth objectives.

The LCICG members have developed the evidence base and the Strategic Framework to help make those choices.

But we cannot do it alone; we need industry, investors and academics to work with us to shape the future of energy innovation in the UK.

In conclusion, I am thrilled that the LCICG is delivering a clear framework to support investment for the remainder of the decade.

I’m confident that by working together we can make the right choices. And ensure we support the innovations necessary to deliver the cost reductions and business growth opportunities that our energy system and our country need.

Thank you.