7. ENERGY TECHNOLOGY RESEARCH, DEVELOPMENT AND DEMONSTRATION

network regulation, with up to GBP 720 million of regulated expenditure available to gas and electric companies to support smarter, more flexible, efficient, and resilient networks.

The Energy Innovation Board (EIB) was established in November 2016 to replace the work of the Low Carbon Innovation Coordination Group (LCICG). The EIB plays a strategic role in aligning domestic and international clean technology investments across the government. The EIB is chaired by the government Chief Scientific Advisor. The EIB is attended by senior civil servants across BEIS, UKRI, Department for Communities and Local government, Department for International Development (DFID), DFT, and Ofgem, with Her Majesty’s Treasury (HMT) as observers. The EIB is internal to the government, but is seeking external members with industry insights to provide external challenge.

The Department for International Development (DFID) defines the United Kingdom’s Overseas Development Aid (ODA) funding. The United Kingdom’s EIB has an International Working Group (subgroup to the EIB) tasked with developing crossgovernment co-operation opportunities and knowledge sharing related to international research and innovation collaboration.

Figure 7.1 provides an overview of the landscape of energy RD&D in the United Kingdom.

Figure 7.1 The United Kingdom’s institutional structure for public RD&D

Source: IEA, 2019. All rights reserved.

Funding on energy

Public spending

In 2017, the government’s provisional estimates of spending was GBP 536 million on energy-related RD&D. Energy efficiency made up 21%, followed by nuclear energy (16%), and renewables (2%), but a large part is allocated to other technologies. The total amount of energy-related RD&D spending has steadily increased since 2014 (Figure 7.2). By international comparison, the United Kingdom has a relatively low energy RD&D budget as a percentage of GDP (Figure 7.3). In 2017, the UK spending on energy RD&D was below the median among the IEA member countries, at 0.26% of GDP.

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7. ENERGY TECHNOLOGY RESEARCH, DEVELOPMENT AND DEMONSTRATION

Energy RD&D programmes

Several programmes and funds are available to the energy sector, including:

BEIS’s Energy Innovation Programme supporting the commercialisation of innovative clean energy technologies and processes (GBP 505 million).

UKRI energy research and development funding, including support for the Energy Systems Catapult and the Offshore Renewable Energy Catapult (GBP 1.2 billion).

The Faraday Challenge funding for the design, development, and manufacture of electric batteries (GBP 246 million).

Up to GBP 620 million from a range of departments, including BEIS, DFT, DFID, and Defra and additional Industrial Strategy Challenge Fund support.

Ofgem makes up to GBP 720 million of regulated expenditure available to gas and electric companies in Great Britain to support smarter, more flexible, efficient, and resilient networks.

Table 7.1 The United Kingdom’s investments (GBP million) in clean growth technology 2015-21

Sources: Based on the information provided in the UK government’s Clean Growth Strategy.

The BEIS Energy Innovation Programme (GBP 505 million) is allocated to smart systems (GBP 70 million), the built environment – energy efficiency and heating (GBP 90 million), industrial decarbonisation and CCUS (GBP 100 million), nuclear innovation and fission (GBP 180 million, renewables innovation (GBP 15 million), and support for energy entrepreneurs and green financing (GBP 50 million).

The United Kingdom has created the Offshore Renewable Innovation Hub (with a budget of up to GBP 1.3 million), led by the Offshore Renewable Energy Catapult and Knowledge Transfer Network, to bring the offshore wind industry together to solve common innovation challenges. The United Kingdom is working with other countries to develop shared solutions to reduce the cost of renewable energy technologies, which includes through the European Research Area Networks (ERA-NETs), with a focus on demonstration projects for bioenergy (GBP 700 000) and offshore wind (GBP 8 million).

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7. ENERGY TECHNOLOGY RESEARCH, DEVELOPMENT AND DEMONSTRATION

Similarly, the UK Smart Systems Innovation programme focuses on reducing the cost of energy storage technologies (including electricity storage, thermal storage, and power-to- gas technologies) with a total budget of GBP 9 million. This includes feasibility studies to implement the government’s ‘Upgrading our Energy System: Smart Systems and Flexibility Plan’, a potential first-of-a-kind large-scale future energy storage demonstrator (up to GBP 600 million), innovative energy demand-side response (DSR) technologies in UK businesses or public sector organisations to reduce their energy use in peak times and provide flexibility to the energy system (GBP 7.6 million), and innovative domestic applications of DSR technologies and business models (up to GBP 7.75 million from 2018-21). Up to GBP 8.8 million is available to develop innovative approaches to energy management using smart meter data, tailored to the needs of smaller non-domestic sites.

demonstrators and feasibility studies. Further Department for Transport funding is available for low carbon fuels: on the Advanced Biofuels Demonstration Competition (ABDC), designed to support the construction of demonstration scale advanced biofuels plants (GBP 16 m), on the Future Fuels for Flight and Freight Competition (F4C), intended to encourage private investment and support the construction of advanced biofuels plants for aviation and heavy goods vehicles sectors (TRL 7-8, GBP 22 m). DfT’s low carbon fuels team collaborates with universities through the Supergen Bioenergy Hub (SBH), focusing at TRL 2-3. SBH and DfT have awarded GBP 200 000 in research into CCUS solutions for transport.

Built Environment Innovation provides GBP 9.8 million for the second phase of work led by the Energy Systems Catapult in the Smart Systems and Heat programme, which supports the development of local energy plans and low-carbon heating projects across the United Kingdom. The programme supports RD&D into potential uses of hydrogen gas for heating (up to GBP 25 million) and the development of technologies that reduce the carbon emissions associated with providing heat and hot water to UK buildings (GBP 10 million), alongside investment in technologies and approaches to improve the energy efficiency of existing UK buildings (GBP 10 million).

The United Kingdom maintains a strong focus on Nuclear Innovation and invested GBP 20 million over 2016-18 to support innovation in the civil nuclear sector and training and capacity building of UK regulators to support the development of advanced technologies (GBP 7 million).

As part of its focus on Industrial Innovation, the BEIS Energy Programme is investing GBP 9.2 million in an Industrial Energy Efficiency Accelerator to seek industry-specific solutions that are close to commercialisation by leveraging private sector investment and strengthening UK supply chains to reduce the energy costs for UK industry. The United Kingdom also promotes the design and construction of CCUS demonstration projects (GBP 20 million), early investment in fuel switching processes and technologies (GBP 20 million), bulk low-carbon hydrogen supply (GBP 20 million), and innovation to reduce the cost of CCUS (GBP 15 million).

The BEIS Energy Entrepreneurs Fund promotes ideas from the public and private sector, notably from small and medium-sized enterprises, and supports the demonstration of

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