Rachel Reeves, ministra de Hacienda de Reino Unido.

As part of its commitment to carbon neutrality, the UK government, through Chancellor of the Exchequer Rachel Reeves, has presented the 2024 Autumn Budget, which strengthens the role of renewable energy.

This budget includes an innovative focus on green hydrogen projects, the creation of Great British Energy (GBE), and fiscal measures to reduce dependence on fossil fuels.

GBE: Long-Term Financing

As part of the clean energy strategy, Great British Energy (GBE) would be launched, a state-owned company aimed at boosting the UK’s energy independence and improving national resilience by focusing on renewable energy projects.

The project will have an initial investment of £125 million for its launch during 2025 and 2026.

The company, based in Aberdeen, will be backed by the newly formed National Wealth Fund (NWF), which has been allocated £27.8 billion and is expected to attract up to £70 billion in private investments in strategic sectors such as ports, green steel, and hydrogen production.

Green Hydrogen Expansion

Minister Reeves has confirmed an allocation of £2 billion to support 11 green hydrogen projects, with a total capacity of 125 MW, in England, Scotland, and Wales. These plants, located in sites such as Bridgend, East Renfrewshire, and Barrow-in-Furness, are among the first commercial-scale green hydrogen projects in the world. Beneficiaries include key companies such as ScottishPower, Carlton Power, EDF Renewables, and Storegga.

However, the sector has raised concerns about delays in funding and regulatory hurdles. To date, none of the projects from the first round (HAR1) have reached a final investment decision (FID), despite the government’s commitment. However, with the upcoming award of up to 875 MW in the HAR2 round, the sector is looking for further signs of support in the budget.

Infrastructure Improvements

The government, along with the new National Energy System Operator (NESO) and the regulatory body Ofgem, is developing a more robust grid connection process. This initiative aims to strengthen the electrical infrastructure, ensuring that it is reliable, adaptable, and primarily powered by renewable energy sources.

Additionally, the budget allocates £134 million to port infrastructure to support floating offshore wind projects, an emerging technology that positions the UK at the forefront of global wind innovation.

Tax Incentives and Regulatory Changes for Clean Energy

On the other hand, fiscal changes will be implemented, increasing the Energy Profits Levy in the North Sea oil and gas sector to 38% and extending its duration until 2030.

This measure aims to redirect investments toward clean technologies and discourage the exploration of fossil fuels, in line with the UK’s vision of becoming a leader in clean energy.

Furthermore, the budget confirms that from 2027, a Carbon Border Adjustment Mechanism will be implemented, which would incentivize the domestic production of hydrogen derivatives and help protect the competitiveness of low-carbon industries in the UK against imported products with higher carbon footprints.

Other Initiatives

Finally, the UK will develop a specific industrial strategy that includes plans for key sectors, such as clean energy industries. This approach aims to strengthen productive capacities and ensure a transition to sustainable technologies.

A commercial strategy will also be implemented to encourage economic growth, including strong support for the export of critical minerals necessary for renewable technologies. This will improve their competitiveness in international markets and contribute to global decarbonization.

Lastly, investment in R&D, with a record budget of £20.4 billion for 2025-26, will remain a priority. These funds are intended to boost innovation in green energy and other strategic sectors, strengthening the region’s position as a leader in technological advancements for sustainability.