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Network Reflections: UK Spring Budget 2023

We asked members of our Network - from our expert Fellows to our Youth Advisory Council - to share their thinking on the measures announced in the UK Government's 2023 Spring Budget in relation to climate change and clean growth...

Yulia Chekunaeva

CGLN Director

We all - both those who are based in the UK and those who are following the global economy - tuned in on March 15, 2023 to listen to the UK Chancellor's Spring Budget.

What we learned is that while the Autumn Statement arguably was released to stabilise the markets and pave the way for the future policy, the new budget keeps on some of the stepping stones set out then, and starts to gradually be pivoting towards aspects of growth. Several measures are particularly encouraging, like the stimulus for investments for business and R&D for SMEs in growth sectors.

The big question for all of us at Clean Growth Leadership Network remains, does this budget provide for clean growth amid the climate crisis we are all facing? Have a look at the feedback from our network where different fellows, members and youth advisory council representatives share their thoughts.

I am, for once, encouraged by certain measures, yet somewhat disappointed that the budget doesn’t have at least an aspiration or a promise in not so distant future to produce a holistic policy response along the lines of massive efforts in the US via its Inflation reduction act or in the EU via their Green Deal Industrial Plan.

While this clearly sets the UK somewhat on the back foot in its ambition to be a leader in the fight against climate change, energy transition, clean growth and decarbonisation of its economy, we remain hopeful that the potential future sets of measures would be more stimulating for the important transformation that the UK has to go through both in its industry but more so in the households and consumer sectors.

Professor Dame Henrietta Moore

CGLN Fellow and Director of the Institute for Global Prosperity at UCL

The Chancellor’s Spring Budget had a range of measures impacting clean growth.

The commitment of £20bn over 20 years for carbon capture and storage is a positive move but questions remain over its affordability and scale.

At the same time, the Chancellor failed to mention that the newly named Department for Energy Security and Net Zero has requested more emergency coal-fired power units for next Winter.

Fossil fuels will no doubt be part of the transition but coupled with awarding 130 new licences for North Sea Oil and gas exploration, this presents a real danger to our ambitions for clean growth and future prosperity.

Shraddha Nair

CGLN Member and Net Zero Consultant at Turner and Townsend

As per the Spring Budget 2023 delivered by Jeremy Hunt in the parliament earlier today on 15th March 2023, a huge decision was made to bring in investments in the renewable sector to ensure energy security and to achieve the UK'S net zero goal of 2050 by focusing on nuclear energy and Carbon capture, utility and storage (CCUS).

As a firm believer in the power and stability of nuclear energy and the expanse of carbon reduction due to the intensity of CCUS, I think that this decision to pour in investments in these two technologies is an excellent decision for reducing energy price volatility and improving the economic state of the country.

This also opens up room for green jobs and innovation from a younger generation of professionals.

Josh Warner

CGLN Youth Advisory Council Member for Mining

The Chancellor's budget demonstrates a positive step towards investing in sustainable energy technologies.

While the allocation of a £20bn package for CCS technologies is significant, money may be better spent on improving energy efficiency and developing renewable energy sources.

Such measures would likely decrease the amount of carbon that needs to be captured by the CCS package in the future!

Maurits Dolmans

CGLN Fellow and Partner at Cleary Gottlieb Steen and Hamilton LLP

The budget announcement indicated that nuclear energy will be recognized as sustainable, and that the Government is launching a competition for small modular nuclear reactors by the end of the year.

This is potentially fantastic news for those who, like me, worry about climate change, the energy crisis, nuclear safety, and how to solve the problem of nuclear waste. It turns out innovation may provide the answer! We discussed this at a CGLN/Cleary Gottlieb seminar last September, reported here, where we had speakers from Rolls Royce, molten salt power start-ups like Copenhagen Atomics (now UK Atomics) and Flibe, and Tokamak Energy Ltd.

The vision of Copenhagen Atomics, for instance, is that hundreds of 100 MWh reactors could be built per year to help address the UK’s energy challenges. This could revolutionize the UK’s energy industry and accelerate the #greentransition towards net-zero #greenenergy, while solving energy security and nuclear waste.

I am convinced that Thorium molten salt power generation (what some people call 4th or even 5th generation nuclear) has a great future and will be big in a few years, for the following reasons:

  • energy transition: this advanced technology can provide a carbon-neutral supply of electricity and industrial heat, assisting climate change mitigation,

  • energy security: the reactors would run on thorium (or on nuclear waste) rather than refined uranium, providing energy security and strategic independence from unreliable suppliers or conflict zones like Russia and the Middle East,

  • green industry uses: generating heat and electricity for a variety of needs, which currently emit high amounts of greenhouse gases, including: production of green hydrogen and ammonia (for the safe transport and storage of hydrogen); green steel, aluminium, cement, fertilizer, water desalination, and other hard-to-decarbonize products; even carbon capture from the atmosphere for sequestration or production of synthetic fuels for hard-to-decarbonize uses that cannot be met otherwise (e.g., airplanes), etc;

  • Scalability: small, scalable and modular like small modular reactors (“SMRs”), allowing industrial-scale production lines for standardized systems.

  • Solving the nuclear waste problem: burning nuclear waste rather than creating it. The UK has 140 tons of separated plutonium; we can either bury it for 100,000 years at £140 billion expense or use it as fuel and get £700 billion+ economic value…

  • Providing employment and innovation in the UK.

A non-fission prototype of the reactor is currently going through a test run and will be shown in the UK soon.

The next step is to take this reactor through a licensing process as a test reactor (2025 or before) and launch commercially by 2028 in the UK (or earlier if they get more funds and faster permission).

This means that combined with renewables, by 2040(!), the UK electricity grid could be completely CO2-free. An exciting prospect, which this budget could help realize!