Newsletters from No 10: 23 March 2010
In the run up to the Budget tomorrow there has been more good news on the green jobs front, with important announcements on electric cars, nuclear, carbon capture and storage, marine energy and energy efficiency. A brief update too on the Copenhagen Accord.
Last week Nissan announced that it would be manufacturing its new plug-in electric car, the Leaf, in Sunderland, safeguarding 550 skilled jobs at its plant there, and creating many more in the wider supply chain. (See http://tinyurl.com/y8o3m3u.) The Government has provided £20.7m in support towards the £420m investment. The announcement follows the decision Nissan made last year to build the first European electric vehicle battery factory in Sunderland, and the creation by the Government of a Low Carbon Economic Area for low emission vehicles in the North East. This will make the UK a world leader in electric car manufacture - Nissan expects to be producing 50,000 cars and 60,000 batteries by 2013. For the Prime Minister and the Government, Nissan's investment is immensely gratifying, a vindication of the strong lead we've taken in promoting electric vehicles over the last two years, with our £450m programme of R&D, consumer subsidy and investment in charging infrastructure now paying off - as planned - in manufacturing jobs as well.
The nuclear supply chain
The day before, the Government was able to announce a major investment in the UK supply chain for new nuclear power stations. Sheffield Forgemasters is to receive an £80m loan to build a new manufacturing facility for ultra heavy forgings for nuclear reactor pressure vessels - as well as for other industries such as oil and gas, carbon capture and storage, marine and hydro. (See http://tinyurl.com/yc4qx79.) Supported by a major investment from Westinghouse, this will make Sheffield Forgemasters only the second company in the world with accreditation to make the largest forgings for the new generation of nuclear power stations. The investment will create 180 highly skilled jobs directly, with many more in component manufacture and other elements of the supply chain. As a result it is estimated that the UK will be on the way to a capability to supply around 70% of the plant and equipment required by our new nuclear programme, a step change from the past which positions the UK as a leading supplier to the global market.
On the same day, Ed Miliband launched the Government's plans to build a new carbon capture and storage industry in the UK. Independent research commissioned by DECC suggests that the advantages of undersea storage sites and existing offshore, manufacturing and engineering capabilities will make the global market for CCS a potential £6.5bn p.a. industry for the UK by 2030, supporting up to 100,000 jobs. The CCS Industrial Strategy (http://tinyurl.com/cjrs6n) sets out how the Government plans to use our commitment to four commercial-scale demonstration projects to build a UK supply chain. It proposes a competitive process for selecting projects 2-4 (for which the Energy Bill currrently completing its passage through Parliament will establish the financial incentive). And it demonstrates the opportunities for the clustering of CO2 capture plants (including industrial CO2 producers as well as power stations) with shared pipelines and storage facilities. A new Office of Carbon Capture and Storage has been established in DECC to take forward the Government's CCS strategy. This was accompanied by the creation of a new Low Carbon Economic Area for CCS in Yorkshire and Humberside, where opportunities for demonstration, innovation, manufacture and skills will be brought together. As part of this, a grant of £6.3m has been awarded to Scottish & Southern Energy towards its £21m 5MW CCS trial at Ferrybridge power station. This follows the announcement on 12 March that two projects, Scottish Power's at Longannet, and E.On's at Kingsnorth, would be going through to the Front End Engineering and Design (FEED) stage of the Government's CCS competition for the first UK demonstration plant. There's a palpable sense of dynamism now in this field.
And at the same time DECC published a Marine Action Plan setting out proposals to support the development of wave, tidal stream and tidal range technologies, which have the potential to create an estimated 16,000 jobs in the UK. The Plan (http://tinyurl.com/ybkqxbm), developed jointly with the marine energy industry, sets out a series of actions across the issues of planning, finance, infrastructure, innovation, supply chain and skills.
And all in the same week London was designated a Low Carbon Economic Area for energy efficient buildings, the seventh LCEA we have announced. Supported by £90m of funding already committed by the London, South East and East of England Development Agencies, the LCEA will include a range of retrofitting programmes for buildings to make them more energy efficient, as well as projects on energy supply, financing mechanisms, employment and skills, and low carbon business growth with a retrofit focus. (See http://tinyurl.com/ykdfypg.)
The new industrial strategy
In all these areas the Government's strategy is to use active industrial interventions, including investment where necessary, to support the creation of capacity and jobs in the UK economy to meet the demand created by our far-reaching energy supply policies. As part of the Government's New Industry, New Jobs programme, last week also saw a particular focus on skills, with the announcement of new National Skills Academies. The National Skills Academy for Power has now been launched, with a further £2.9m of Government funding. In the nuclear sector, the Government announced that it will co-fund the delivery of up to 1000 apprentices per year, part of the Government's wider plans to deliver 35,000 advanced and higher apprenticeships to people aged 19 to 30.
All this is part of the Government's wider approach to stimulating economic growth through a more active industrial strategy. Lord Mandelson's speech on this last week sets it out well - http://tinyurl.com/ylhpx8j.
You may be interested to know that the number of countries associating with the Copenhagen Accord has now passed 100, with China and India formally notifying their association in the last fortnight. Over 70 have submitted emissions reduction commitments to the Accord Annexes, covering around 80% of global emissions. As the Prime Minister predicted, the Accord is now established as a very significant global agreement. Over the last few weeks there have been successful meetings in Paris to take forward forest protection and in Mexico City to build a path to renewed negotiations on a UN agreement. Next week in London Gordon Brown will co-chair, with PM Meles Zenawi of Ethiopia, the first meeting of the UN Secretary-General's High Level Advisory Group on climate financing. I will report further on this and other international developments then.
With best wishes
Special Adviser to the Prime Minister
10 Downing St
London SW1A 2AA