The government has announced a new plan to pump £1 billion a year into technology which can help capture carbon emissions before they are released into the atmosphere, as part of proposals to tackle high energy bills in the future.
Chancellor Jeremy Hunt will next week set out what he says will be a “clean energy reset”, with extra money for carbon capture and new promises on nuclear power.
Mr Hunt will argue the pledges will create 50,000 highly-skilled jobs.
However, in an announcement on Friday evening, the Treasury promised nothing new to help wind or solar developers.
Earlier this week, the government’s official advisers on the Climate Change Committee said carbon capture investment is crucial to meet the target of decarbonising the UK’s electricity generation fully by 2035 – part of the long-term goal of reaching net zero greenhouse gas emissions by 2050.
At the budget next Wednesday, Mr Hunt is set to confirm an “unprecedented investment” focusing on domestic carbon capture and low carbon energy.
In total, the Treasury will provide £20bn in funding for the technology over the next 20 years.
Part of the money will come from the government, but part of it will also be funded through energy bills.
Ministers hope the projects that the cash helps can capture and store 20-30 million tons of carbon dioxide every year by 2030 – equal to the emissions from 10-15 million cars.
In 2021, total UK greenhouse gas emissions reached 505 million tons of carbon dioxide equivalent – a measure that also counts methane and other greenhouse gases.
By 2050 this needs to be down to zero, and carbon capture is seen as vital in helping the government achieve that goal.
Small nuclear power stations plan
The Treasury also promised to launch a competition to build small nuclear power plants in the UK – so-called small modular reactors (SMRs).
SMRs are emerging technology, and no country has yet to deploy one.
The government said the competition will be open to domestic and international designers, with the winners announced “rapidly”.
It said it plans to “match a proportion of private investment,” to get the projects off the ground as speedily as possible, though it did not say how much.
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Mr Hunt said: “Without government support, the average household energy bill would have hit almost £4,300 this year, which is why we stepped in to save a typical household £1,300 on their energy bills this winter.
“We don’t want to see high bills like this again, it’s time for a clean energy reset.
“That is why we are fully committing to nuclear power in the UK, backing a new generation of small modular reactors, and investing tens of billions in clean energy through carbon capture.”
Mr Hunt added the investment “will help drive energy bills down for households across the country and improve our energy security while delivering on one of our five promises to grow the economy”.
Energy Secretary Grant Shapps said the UK is “already a global leader in offshore wind power” and “we now want to do the same for the UK’s nuclear and carbon capture industries”.
“Today’s funding will play an integral role in delivering that, helping us further towards our net zero targets and creating green jobs across the country.”
