UK Infrastructure Bank told to put more money into green energy
The UK Infrastructure Bank (UKIB) has been urged to invest in green energy as the country continues to face rising energy prices following Russia's invasion of the Ukraine.
Given the reliance of European Union states on supplies of Russian oil and gas, EU and UK energy prices have risen dramatically in the past month.
Consequently chancellor Rishi Sunak has written to UKIB chief executive John Flint to emphasise the need to improve energy security.
"The role the Bank can play in reducing the UK’s dependency on fossil fuels and increasing prosperity across the country has been brought into sharp focus by Russia’s unprovoked invasion of Ukraine," the letter says.
"In particular, it is important that we take every step possible to improve our energy resilience, to protect us from future shocks and volatility in global markets. This does not change the long-term mission of the Bank but emphasises the need to make rapid progress on its net zero goals, particularly where they overlap with the government’s renewed focus on energy security."
Sunak revealed the formation of the UK infrastructure Bank in his Budget announcement in autumn 2020.
Located in Leeds, the Bank will invest across the UK in public and private projects with an initial capitalisation of £12bn.In the UKIB Policy Design document, the government outlined that the bank’s primary focus should be on economic infrastructure, in particular clean energy, transport, digital, water and waste.
Sunak's letter says that "in light of the recent circumstances", he would now encourage the bank to "prioritise opportunities that align with the government’s renewed focus on energy security".
It adds: "Examples of relevant opportunities may include helping to bring forward low carbon energy projects that accelerate the UK’s transition to clean energy and improve the energy efficiency of buildings and homes."
According to the letter, in general the Bank should not support projects which are "predominantly social or cultural infrastructure", including housing, schools, health facilities, courts, prison facilities, sports venues or cultural venues (theatres, libraries, museums, cinemas).
However projects or technologies that support energy efficiency, including the retrofit of existing homes and buildings, and/or the decarbonisation of heating, in line with the government’s Heat and Buildings Strategy, are in scope.
"This reflects the strategic importance of the net zero transition, as well as the urgent need to improve the energy efficiency of our buildings in the context of high energy prices and the government’s renewed focus on energy security," the letter says.
"In addition, projects involving greenhouse gas removals, which will play an important role in the transition to net zero, should be treated as within UKIB’s scope. This includes both engineering-based approaches (such as direct air carbon capture and storage) and nature-based approaches (such as afforestation and soil carbon sequestration), as detailed in the net zero strategy."
A range of energy options are currently under consideration by the government as Russia's invasion of the Ukraine continues to drive up prices. These include large nuclear, SMRs and renewables and prime minister Boris Johnson has said that a new national energy strategy will be set out this week.
Today Johnson is chairing a meeting with nuclear industry leaders about how to increase the UK's nuclear power output. According to the Guardian, no 10 officials said topics expected to be discussed include how government and industry can work together to remove barriers and progress future nuclear projects in the UK more quickly and cheaply.
Johnson is also due to meet executives from the wind sector this week.