Can cleantech rescue the UK’s climate reputation?

This dynamic sector is a source of national pride and optimism amid the crisis, but it’s clamouring for effective support from Westminster. Given the government’s recent choices, that may not be forthcoming

Overhead aerial view of modern sustainable housing development in North London
A sustainable housing development in North London

In June, the Climate Change Committee published a damning progress report on the government’s efforts to cut greenhouse gas emissions in the UK.

This independent non-departmental body is chaired by John Gummer, Baron Deben, who served as environment secretary in the Major government during the mid-1990s. He wrote an open letter to Rishi Sunak summarising the report’s main findings. In it, he stated that the government’s “failure to act decisively in response to the energy crisis and build on the success of hosting COP26 means that the UK has lost its clear global climate leadership. Game-changing interventions from the US and Europe, which will turbocharge the growth of renewables, are leaving the UK behind.”

Lord Deben added that the problem was being compounded by the government’s “continuing support for further unnecessary investment in fossil fuels”. 

Indeed, its recent release of hundreds of new North Sea oil and gas extraction licences has been decried by many for delaying the UK’s transition to renewables and sending mixed signals to the energy industry and beyond. 

Sylvie Russell, COO of Cambridge Cleantech, a membership organisation for firms in the cleantech sector, is one such critic. She believes that tackling climate change is not high enough on the agenda in Westminster, having observed “a worrying degree of ambivalence” about the issue in the upper echelons of government.

Cleantech presents the greatest opportunity for leadership

The Deben letter also called on the prime minister to “act urgently to correct the failures of the past year and reclaim the UK’s clear climate leadership role”.

The good news is that the UK still has a chance to be a global leader in cleantech according to experts in this field. This country is home to a thriving innovation scene and remains one of the world’s most important cleantech markets. In fact, it was second only to the US for hosting climate tech startups and scale-ups last year, according to research published by Tech Nation, which estimated that the UK was home to more than 5,200 climate tech pioneers. 

We need to back our successful innovators all the way through to global success

Yet being an R&D hotbed for new technologies simply isn’t enough, according to Peter Bance, founder and CEO of cleantech firm Origami Energy.

“If the UK cleantech scene aspires to be more than simply a target-rich environment for acquisitive foreign companies, we need to back our successful innovators all the way through to global success,” he argues.

Bance thinks that, while the UK may have missed the chance to establish itself as an important base for the large-scale production of solar panels or wind turbines, it is well placed to become a global leader in critical “enabling solutions”. These are likely to add a lot of value over time and will not be readily commoditised.

He explains: “Exciting areas include battery management systems, data science and analytics, and green trading. The solutions that will thrive and see the global stage will be sensitive and adaptable to changes in technology; modular and customisable to the needs of customers; and resilient to the security risks of an increasingly digitalised energy system.”

How public-private initiatives can support cleantech

Public-private partnerships can play a key role in securing the future of cleantech in the UK. That’s the view of Hannah Scott, co-founder and CEO of Oxfordshire Greentech, a business network supporting the growth of the county’s low-carbon sector.

She reports that “several public-private partnerships have had great success, including the Energy Superhub Oxford – Europe’s largest charging hub for electric vehicles – and Local Energy Oxfordshire, which is one of the most ambitious trials of its kind in the country. These initiatives are hugely important, using the government’s policy and grant-funding abilities in tandem with the private sector’s dynamism and our universities’ world-leading research capabilities.”

Although such partnerships can clearly boost the development of cleantech, they are unlikely to make this country a world leader in this field on their own. Much more would have to be done across the board. For instance, the UK doesn’t have an equivalent of the US Inflation Reduction Act 2022. Within 12 months, this legislation has stimulated about $278bn (£222bn) in new clean energy investments since it was enacted, creating more than 170,000 jobs in the process, according to environmental campaign group Climate Power. 

“Many are calling this act the most significant piece of climate legislation in US history,” Scott says. “In the UK, we have yet to see a piece of legislation that has caused an equivalent uptick in renewables investment and development.”

Cleantech for UK is an initiative aiming to establish a dialogue between policy-makers and those funding, creating and growing cleantech businesses. Its founding coalition features investors controlling combined funds exceeding £6bn. The organisation estimates that the UK would need to “spend a total of £33bn in cleantech over the next 10 years to spend the GDP equivalent of the Inflation Reduction Act”, but there is no government plan in place to support anywhere near that level of investment.

Government must do more to support the sector

Cleantech for UK recently wrote its own open letter urging ministers to consider a three-pillar strategy to maintain the UK’s competitiveness in the field.

“As the world enters a new era of cleantech competition, the UK is presented with a once-in-a-generation opportunity to build its economy, unlock thousands of jobs and deliver a net-zero future,” it argued, noting that the EU, the US, China and Japan “are all moving quickly to capture their share of the cleantech market. The UK needs to respond to the international competition and provide a clear delivery plan to develop net-zero industries.”

The organisation believes that the government must focus on creating an agile and supportive regulatory system; support projects with public money and innovative funding models; and devise a long-term policy framework.

Ultimately, this calls for an ecosystem approach that can rival what’s happening in other economies, where policy, enterprise and innovation go hand in hand.

As Russell observes: “There are plenty of smart and motivated people in this sector who are very willing to contribute to that. They simply need the government to ask them.”