Source · Select Committees · Business and Trade Committee
Recommendation 17
17
Accepted
Paragraph: 74
Set out interventions to provide investors with long-term certainty on competitive UK energy prices.
Recommendation
High energy prices in the UK are deterring investment in the battery supply chain. The Government has taken steps to support energy-intensive industries. However, investors still need more certainty that UK energy prices will remain internationally competitive. The Advanced Manufacturing Plan and UK Battery Strategy should set out further interventions that will provide investors with more long-term certainty that the UK’s energy prices will be competitive with other markets.
Government Response Summary
The government has committed to further interventions to provide long-term certainty on energy prices, including extending support for Energy Intensive Industries to battery manufacturers, implementing the British Industry Supercharger, allocating £185 million to the Industrial Energy Transformation Fund, and offering £300 million annually in tax relief via the Climate Change Agreement Scheme until 2033.
Paragraph Reference:
74
Government Response
Accepted
HM Government
Accepted
A) The Government has consistently taken decisive steps to reduce the price of energy and strengthen the UK’s competitiveness internationally. For example, the 2022 Energy Security Strategy announced that support for Energy Intensive intensity that represents a doubling of the previous annual budget. Importantly, eligibility was extended to the manufacture of batteries, including lithium-ion batteries. B) In February 2023, the Government announced further support for key Energy Intensive Industries in the form of the British Industry Supercharger. Over 300 businesses, including manufacturers of batteries and accumulators, will benefit from the additional targeted measures to ensure that energy costs are in line with those of other major economies and level the playing field for UK companies. C) At Autumn Statement 2023, the Government announced it is providing support to help industry transition to a resilient, low-carbon, and competitive future. This includes spending £185 million on the Industrial Energy Transformation Fund (IETF) to support industrial sites with investment in more energy efficient and low-carbon technologies. D) The Government is also providing around £300 million a year in tax relief in exchange for meeting energy efficiency targets under the new six-year Climate Change Agreement Scheme, with associated relief running until 31 March 2033. Climate Change Agreements Scheme are invited to make a proposal to be added to it. E) The Government is committed to ensuring that the costs of the UK’s energy transition are fair and affordable for all consumers. The Review of Electricity Market Arrangements (REMA) is looking at our current market arrangements to ensure that they can deliver a secure, cost-effective, low carbon electricity system by 2035. F) These interventions will further cement long-term certainty around the UK’s energy prices for investors.