Government announces £375m package to support new energy strategy

A multimillion-pound package has been announced to help support the “bold plans” of the Government’s new energy strategy.

Business and Energy Secretary Kwasi Kwarteng said the £375 million investment will “unlock the enormous potential” of hydrogen and nuclear power.

The financial package, announced on Friday, includes £240 million to fund low carbon hydrogen production projects, £5 million towards the acceleration of Carbon Capture and Storage (CCUS) Technologies, and a £2.5 million competition for bidders to develop a UK Advanced Modular Reactor (AMR).

It comes a day after Prime Minister Boris Johnson sought to defend the new energy strategy in the face of criticism it does nothing to help people with soaring bills now.

He said the strategy – which sets out aims to boost new nuclear power, offshore wind and hydrogen – is a long-term plan focusing on energy supply, “undoing the mistakes of the past and taking the big decisions now”.

He said the Government was “already doing a huge amount to help people with the immediate cost of living and of course we are going to do more”.

The latest investment will support research, development and deployment of “cutting-edge technologies”, the Government said, adding that it was also publishing a “range of important documents and guidelines to support the development of these industries”.

Of the financial package to accompany the strategy, Mr Kwarteng said: “This investment will unlock the enormous potential of hydrogen fuel, advanced nuclear reactors and Carbon Capture to level up the UK energy landscape and deliver for businesses and households.

“High gas prices and Russia’s aggression in Ukraine have highlighted the urgent need to produce more of our energy here in the UK.

“That’s why we have set out bold plans to harness clean, cutting-edge, homegrown technologies and build the energy security we need for the future.

But Labour, which had already criticised the energy strategy as “not enough” and being “too little, too late” to help families with rising costs, branded the the financial support package as a “pot of reheated announcements” which “does not deliver the decisive step forward we need”.

Ed Miliband, Labour’s shadow climate change and net zero secretary, said: “The UK can be a world leader in green technologies like hydrogen, but only if we have a government that will back our great British businesses with the investment at scale seen by other governments around the world.

“Unfortunately, this pot of reheated announcements does not deliver the decisive step forward we need.”

Meanwhile, the i newspaper reported that Chancellor Rishi Sunak had vetoed a plan for extra help for households with rising energy bills.

The paper said a leaked document showed that he had refused to increase the £200 energy rebate to £500 or more.

A spokesman for the Treasury did not deny the report, and said they “understand that people are struggling with the rising cost of living, that’s why our immediate priority has been to put billions of pounds back into the pockets of hard-working families across the UK”.

They added that the energy strategy “sets out a long-term plan to make energy more affordable, clean and secure while creating thousands of jobs”.

The energy strategy was published on Thursday as western countries wrestle with high energy prices and consider how to reduce reliance on Russian oil and gas, amid wider calls to end the fossil fuel era to tackle dangerous climate change.

A fleet of new nuclear power plants is at the heart of the strategy, with Mr Johnson claiming “nuclear is coming home” and suggesting a new reactor will be built every year, in a social media video to promote the plan.

As part of an aim to make 95% of electricity low carbon by 2030, the strategy has a goal to produce up to 50GW of offshore wind energy by 2030, which officials said would be more than enough to power every home in the UK.

The strategy also includes an aim to double the goal of 10GW of low-carbon hydrogen production by 2030, with at least half from “green” hydrogen, produced from renewable electricity rather than natural gas.