New UK National Wealth Fund to unlock private investment

The new UK Labour government’s Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds have unveiled plans to align the UK Infrastructure Bank (UKIB) and the British Business Bank under a new National Wealth Fund that will ‘boost growth and unlock investment’ in the ‘new industries of the future’.

Chaired by the Green Finance Institute, the Taskforce includes former Bank of England Governor Mark Carney, Barclays CEO C S Venkatakrishnan, Aviva CEO Dame Amanda Blanc and large institutional investors.

The government plans to allocate some £7.3bn through the UK Infrastructure Bank so investments in priority sectors can begin immediately. This funding complements existing UKIB investments, such as that recently made in Highview Power (see below), and is designed to unlock billions in private investment for green and growth industries.

Making the announcement, the Chancellor emphasised the urgency of economic growth and the importance of the National Wealth Fund in bringing together key institutions to unlock investment in emerging sectors, stating: ‘This new government is getting on with the job of delivering economic growth. I have been clear that there is no time to waste.’  

Energy Security and Net Zero Secretary Ed Miliband stressed the Fund’s role in creating jobs and boosting energy independence. ‘Our Mission to make Britain a clean energy superpower is about investing in Britain. Our National Wealth Fund will help create thousands of jobs in the clean energy industries of the future.’

Dr Rhian-Mari Thomas, Chair of the Taskforce and CEO of the Green Finance Institute, added: ‘The National Wealth Fund will reshape the way we approach public-private risk-sharing,’ making the UK an attractive destination for global investment.  

Further detail will be set out ahead of the government’s international investment Summit in October.  

UK’s first commercial-scale liquid air energy storage (LAES) plant wins UKIB support

Meanwhile, Highview Power has secured £300mn of investment for what is claimed will be the first commercial-scale liquid air energy storage (LAES) plant in the UK. The £300mn funding round was led by the UKIB and British energy and services company Centrica, alongside a syndicate of investors including Rio Tinto, Goldman Sachs, KIRKBI and Mosaic Capital.

The investment will enable construction of one of the world’s largest long duration energy storage (LDES) facilities, in Carrington, Manchester, using Highview Power’s proprietary LAES technology. With excess power, the plant uses cryogenic cooling to liquefy ambient air; when power is required, it allows the air to regasify. Once complete, it will have a storage capacity of 300 MWh and an output power of 50 MW/h for six hours. The facility will be commissioned in early 2026.

Highview Power’s LAES technology can store renewable energy for up to several weeks, longer than battery technologies, providing stability services to the national electricity grid and helping reduce curtailment costs, which are estimated to have cost Britain some £800mn in 2023.

The company also plans to accelerate the roll-out of its next four larger scale 2.5 GWh facilities (with a total anticipated investment of £3bn) by 2035. This is in line with one of National Grid’s target scenario forecasts of a 4 GW requirement from LAES over the coming decades, which would represent nearly 20% of the UK’s LDES needs.  

Chris Stark to lead Mission Control to deliver clean power by 2030

In other news, Chris Stark has been appointed to lead the government’s new Mission Control initiative, aimed at accelerating the UK’s transition to clean power by 2030.

Mission Control aims to bring together top energy experts to streamline and expedite energy projects. Its primary tasks will include troubleshooting, negotiating and clearing obstacles for energy projects, working closely with key stakeholders such as Ofgem, the National Grid and the Electricity System Operator (ESO).

Stark is former Chief Executive of the Climate Change Committee, and former Director of Energy and Climate Change in the Scottish government. Commenting on the task ahead, he says: ‘Tackling the climate crisis and accelerating the transition to clean power is the country’s biggest challenge, and its greatest opportunity. By taking action now, we can put the UK at the forefront of the global race to net zero’.

The government has also asked the ESO to provide advice on the pathway towards its 2030 ambition, with expert analysis of the location and type of new investment and infrastructure needed to deliver it.

Mission Control will work alongside Great British Energy – a new publicly-owned company dedicated to managing and delivering renewable energy infrastructure in the UK, which was pledged as part of the Labour government’s election manifesto.  

Labour hits the ground running with development consent for three UK solar farms  

Within days of coming into power, the UK government’s Energy Security Miliband granted development consent to three large onshore solar farms in the east of England that had previously been blocked by Conservative MPs. The projects are Sunnica’s 500 MW solar photovoltaic (PV) and battery storage energy farm on the Suffolk/Cambridgeshire border, Low Carbon’s 500 MW Gate Burton solar and energy storage park in Lincolnshire, and the Windel Energy/Recurrent Energy Mallard Pass 350 MW solar farm in Lincolnshire/Rutland.

Industry association Solar Energy UK reports that the planned capacity will be equivalent to roughly two-thirds of all ground-mounted and rooftop solar projects installed across the UK last year.

The development consents form part of the wider Labour government plan to triple the amount of solar power in the UK by 2030, as well as double onshore wind and quadruple offshore wind.

However, some criticism was voiced following the announcements, including from Conservative MP Alicia Kearns who said she was ‘appalled’ by the government’s disregard of community consent, the loss of land used for growing food, and concerns over the human rights records of some Chinese solar panel manufacturers.