Recommendation 5

HM Government · verbatim extract Accepted

The government agrees with this recommendation. The importance of attracting and sustaining investment into domestic supply chains was reiterated in the Government’s North Sea Future Plan, published 26 November. We announced several new policy interventions aimed at supporting the North Sea supply chains futureproof and diversify their activities. These are: A new North Sea Future Board will convene people with the experience and levers to manage the energy transition across the North Sea. Establishing a supply chain workstream will be one of the first tasks for the Board. To develop a comprehensive guidance package for supply chain businesses and investors Working with the NSTA to develop a Basin Wide Plan to support greater transparency regarding upcoming activity in the North Sea. To work with GBE to ensure that their £1bn Supply Chain Fund will support the North Sea transition through strategic funding and a focus on utilising the UK’s existing industrial strengths in oil and gas to deliver the next generation of clean energy technologies. We also reiterated that industry-led local content requirements are critical to providing the demand certainty for British clean energy manufacturers and enabling the UK to reach its productivity and Growth ambitions. Our paper underscored how Government is putting local workforce at the heart of the supply chain transition. UK supply chain growth means both securing good jobs for the workforce now and creating good British jobs into the future. In addition to these announcements, we described several sector-specific activities that will also help to ensure that we grow and make the best use of our domestic supply chains. The Clean Industry Bonus will support manufacturing in coastal and energy communities and cleaner, more sustainable supply chains, while increased transparency and predictability in future Contracts for Difference (CfDs) allocation rounds will support investment. CfDs incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high. The government will work with the Offshore Wind Industry Council (OWIC) and Industrial Growth Plan (IGP) Strategy Board to introduce new metrics by the end of 2025 to determine the health and success of the supply chain, based on the detailed supply chain analysis conducted for the IGP. Building on the industry’s previous work to develop a UK-content methodology, these metrics can provide the underpinning for industry-led UK local content goals for the offshore wind sector. The Contracts for Difference Clean Industry Bonus Allocation Round 7 (end 2025/start 2026) will be allocating extra Contracts for Difference (CfD) funding to developers investing in the offshore wind supply chain, including reserved funding for investments in the floating offshore wind supply chain, through CfD Allocation Round 7 projects. This policy will enable investments to be concentrated in the UK’s poorest communities – ex-industrial, port and coastal towns - and in cleaner manufacturing facilities. Funding will be confirmed after Allocation Round 7 results, which are expected end 2025/early 2026. The government has awarded more than £55 million Floating Offshore Wind Manufacturing Investment Scheme (FLOWMIS) funding to Port of Cromarty Firth to secure critical facilities needed for the rapid development of new floating offshore windfarms and ensure they are built from the UK. Following the Spending Review, the government and Great British Energy joined forces with industry and The Crown Estate to invest £1 billion in offshore wind supply chains. This includes: Up to £300 million from GBE to build UK manufacturing capacity for key constrained components for offshore wind and enabling networks. The Crown Estate will invest up to £400m of capital in the offshore wind supply chain, focusing on direct investments to fund the construction of port and supply chain facilities which enable offshore wind deployment and support local jobs. £300 million being developed by the offshore wind industry to deliver new investments into supply chains such as advanced turbines technologies, foundations and substructures. CCUS is essential to the future green economy, tackling climate change, and meeting the UK’s target to reach net zero emissions by 2050. CCUS will complement our transition to homegrown clean energy, safeguarding our energy security and decarbonise power and industry in a way that drives growth. The benefits CCUS offers for the UK’s growth and clean power missions are significant. It has the potential to deliver a stronger, greener UK by levelling up our industrial heartlands, supporting clean growth, attracting significant foreign investment and providing new economic opportunities for UK-based companies across the world. Government renewed i