ABI heralds renewables moves from Hunt in UK Budget

The Association of British Insurers (ABI) has welcomed moves by the UK government to further the UK’s transition to Net Zero.

In the Spring Budget, the UK Chancellor announced funding for carbon capture, usage and storage (CCUS), as well as nuclear power plants.

Underlining the government’s nuclear ambitions, Chancellor Jeremy Hunt (pic) unveiled the launch of Great British Nuclear, a state-owned company that will support new nuclear builds to provide 25% of the country’s electricity by 2050.

The company will initially focus on co-funding small modular reactors, with gigawatt-scale projects to be considered in future.

Hunt said he would boost investment in nuclear power by launching a competition for small modular reactors (SMRs), such as those being developed by Rolls-Royce, and funding if the technology proved to be viable.

The UK aims to replace its ageing nuclear power stations as all but one of the plants, which generate around 13% of the country’s electricity, are due to close by 2030.

“I am launching the first competition for Small Modular Reactors,” Hunt said in his budget statement. “It will be completed by the end of this year and if demonstrated to be viable we will co-fund this exciting new technology.”

The UK previously announced a competition for SMRs in the 2015 Autumn Statement with the first phase opening in 2016 and attracting interest from 33 eligible parties. However, it  closed in 2017 without moving beyond the initial, information gathering first stage.

Last year the government committed £210 million to Rolls-Royce as part of its £500-million pound SMR programme, which could see the company open factories to build the reactors in Britain.

In the budget, Hunt also said he would consult on classing nuclear power as “environmentally sustainable” to encourage more private investment into the sector.

He also unveiled up to £20bn of funding for early deployment of CCUS to develop “another plank of our green economy”.

The Spring Budget noted that the funding will “help meet the government’s climate commitments” with a shortlist of projects to be announced later this month.

Hunt also used the Budget to classify nuclear as “environmentally sustainable” and confirmed that the technology will have the same investment incentives as renewable energy.

Commenting on the moves, Hannah Gurga, ABI Director General said:  “As insurance and savings providers, employers and investors, the insurance and long-term savings sector has a significant role to play in supporting the Chancellor’s vision for growth. We welcome the Spring Budget which will help boost the economy, support a thriving workplace and further the UK’s transition to Net Zero. It is reassuring to hear the predictions that the UK will avoid a recession this year.”

“We also welcome the support for bolstering the UK’s supply of independent, renewable energy and leveraging opportunities for investment in it,” she added.