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UK Government Budget Summary

We at Marine Energy Wales have spent the last few days reviewing the UK Chancellor’s latest budget announcement (so you don’t have to) and have identified the following that may be of interest to our membership and followers:

Extra Funding for Holyhead Hydrogen Hub

In our last newsletter we covered the developing plans for a new Hydrogen Hub at the Port of Holyhead, being managed and developed by MEW Member Menter Môn, the social enterprise behind the Morlais tidal demonstration project.

As part of the budget announcement £4.8 million is being allocated to the further development of the project. Holyhead as one one of the UK’s busiest ports for heavy goods vehicles is an ideal location to pilot a hub and spoke model of hydrogen production and refuelling. This investment is expected to act as a boost to the local renewables industry and lead to the creation of more jobs in the Anglesey region.

Menter Môn Managing Director, Dafydd Gruffydd had this to say:

“This is excellent news and a huge boost to the project in Holyhead.  Our aim as we develop the site is to ensure Anglesey and the wider north Wales region are in a strong position to play a key part in this sector which offers so many opportunities in terms of jobs, skills development and the supply chain.

What makes this particular project unique is that it is run by a third sector organisation. So, like all our other projects we can ensure local ownership and benefit – it’s what we’re about as an organisation.

The benefits of hydrogen as a zero-emission fuel for transportation, a long-term energy store as well as for heating homes have long been known. And now faced with the prospect of ensuring a green recovery post pandemic, I believe the Holyhead Hydrogen Hub can play a key part. With the increasing focus on decarbonisation the aim will be to create green hydrogen from renewables including from Morlais, our own tidal stream energy project off the coast of Holy Island.”

Floating Offshore Wind Demonstration Programme

The UK government have announced a £20 million funding scheme to support the development and demonstration of new technologies and products that will feed into the establishment and rollout of the floating offshore wind industry.

This is a grant funded programme with money being awarded to technologies of mid-TRL that are ready to be proved and demonstrated. Particular focus is put on technologies that address challenges in:

  • Anchors and moorings.
  • Dynamic cables.
  • Floaters and foundations.
  • As well as other miscellaneous technology relevant to the floating offshore wind industry.

Official guidance and application form are yet to be released, however, you can find out more information and complete and expression of interest form via the following link.

Energy Storage Prototype Competition

Up to £68 million will be awarded across two streams to help develop energy storage technologies that:

  • Have the potential to be deployed at large scale.
  • Can provide competitive services to the grid through flexibility and stabilisation.
  • With longer duration storage capacity (over 4 hours, longer durations scoring higher)

A number of storage methods are encapsulated within this, including electric, thermal and power-to-x.

Stream 1 will focus on demonstrating first of its kind solutions at TRL 6 and 7, with £37 million awarded in the form of capital grants. Stream 2 will focus on technologies at TRL 4 and 5, with £30 million awarded in the form of small business research initiative contracts.

Expressions of interest must be completed by midnight Friday 12th of March, emailed to smart.innovation@BEIS.gov.uk with the title “NZIP Energy Storage”. Find out more here.

Accelerated Funding for Swansea Bay City Deal and North Wales Growth Deal

Regional and city growth deals will see an acceleration of their funding allocation. The total pledged investment will be delivered over a shorter timescale with the aim to accelerate recovery in response to the corona virus.

The North Wales Growth Deal includes the Morlais tidal demonstration zone developed by Menter Môn off the coast of Anglesey. The Swansea Bay City Deal includes Pembroke Dock Marine, a collaborative project made up of the Marine Energy Engineering Centre of Excellence (delivered by ORE Catapult), the redevelopment of Pembroke Port (delivered by Port of Milford Haven), the Marine Energy Test Area (developed by Marine Energy Wales), and the Pembrokeshire Demonstration Zone (developed by  Wave Hub Development Services).

Super Deductions on New Plant and Machinery Assets

A 2 year incentive has been announced in the form of tax relief that will allow manufacturers to claim back the cost of new plant and machinery assets. This includes:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments;
  • a 50% first-year allowance for qualifying special rate assets.

The details of qualifying criteria are yet to be announced but initial reports indicate this will include manufacturing equipment that improves energy and material efficiency as well expanding production capacity and capability.

UK Infrastructure Bank

A new UK Infrastructure Bank will be established this Spring with aims of targetting investment into infrastructure projects that help tackle climate change and support regional and local economic growth through a greater degree of connectivity.

£12 billion will be available initially, with this later expanded to £22 billion. The bank will have a mandate to support a range of different sectors but its primary focus will include clean energy projects. In addition the bank will also be able to offer financial support to university projects. Read full details here.

Freeports Announcements

A string of Freeports have been announced across England including East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside. It has also been announced that the UK government will be working closely with the Welsh government to also grant a Welsh port freeport status. Freeports create special economic zones in which duty is lowered in order to encourage economic activity around the port.

Green Bonds

£15 billion in green bonds have been announced to finance the transition to net zero. The general public will be able to invest in these bonds with the money then used to finance climate change tackling projects, infrastructure developments and green jobs. A framework will be published in June with further details on the types of expenditure that this will will help to finance.