Energy Firms Get £12m for Cutting Emissions, Costs

Businesses across the UK will benefit from a share of more than £12 million government funding to help energy-intensive industries cut their carbon emissions and energy costs.

The funding for the 22 winning projects will help businesses across England, Wales and Northern Ireland clean up their industrial processes and improve their energy efficiency - benefiting industries including pharmaceuticals, steel, paper, and food and drink.

This £12.4 million funding was awarded as part of the Industrial Energy Transformation Fund (IETF), which has awarded grants to British projects across the country to increase the energy efficiency of their industrial processes, from car manufacturing to steel production and food processing.

The winning bids include sustainably harvesting food in Carmarthenshire, Wales, through a new air source heat pump system, capturing waste heat to dry, heat, crush and grind materials for roadmaking in South Yorkshire and using revolutionary high temperature heat pumps to reduce the energy needed to heat and cool cheese, reducing emissions in dairy farms across the Midlands.

It is estimated that industry is currently responsible for producing 16% of the UK's emissions and will need to cut emissions by two thirds by 2035 in order for the UK to achieve its net zero target.

Today's funding will play a crucial role in helping to clean up big-emitting industries as part of the UK's green industrial revolution - decarbonising their industrial processes and reducing their reliance on expensive fossil fuels, such as gas. This means businesses will not only reduce their environmental impact, but also save on their energy bills and safeguard thousands of British jobs.

Graham Stuart, Minister at the Department for Energy Security and Net Zero said:

Boosting the energy efficiency of industrial processes is a critical step not only in our transition to a lower-carbon economy, but also by helping businesses to cut their energy costs and protect valuable British jobs.

That's why the government has stepped in once again to support energy intensive industries, with a fresh funding round to unleash the next generation of green innovators who are re-shaping the way technology can reduce carbon emissions.

So far, £34.8 million of funding has been awarded through the Industrial Energy Transformation Fund, which was first launched in June 2020.

Today's winners

Greener food

One of the biggest food companies in Europe, Dunbia, based in Carmarthenshire, Wales, has been awarded funds to upgrade its heating system from a gas oil fired steam boiler to an air source heat pump that is powered by renewably sourced electricity. This allows the company to harvest edible products and process the food with hot water washing, through a sustainable and energy efficient thermal supply system, reducing carbon emissions each year.

Sustainable roads

Harsco Environmental's SteelPhalt plant, based in Rotherham, South Yorkshire, has been developing and manufacturing high performance tarmac products for the UK roadmaking industry since the 1960s. This energy intensive process of drying, heating, crushing, grinding, conveying currently utilises large volumes of natural gas, gas oil and electricity from the grid, but thanks to government funding, the company is investigating ways to capture the waste heat in the exhaust gases and transform it into electrical power, reducing the fuel demand of the road burners and supporting manufacturing in the local area.

Lighter, safer vehicles

Autotech Engineering / Gestamp is a multinational based in Newton Aycliffe, County Durham, specialising in the design, development and manufacture of metals for lighter and safer vehicles. Whereby high-tonnage presses of flat metal sheets typically loses lots of energy through heat and noise, IETF has helped to fund the SERPENT project which is actively capturing and reusing this lost energy. With a reduction of almost 10% already seen in peak power usage during tool changeover, this funding is helping to lower energy consumption and the environmental impact of critical car manufacturing.

Say cheese

The Long Clawson Dairy has been producing cheese for over a century, running over 31 farms in the Leicestershire, Nottinghamshire and Derbyshire areas. The production of cheese is an energy intensive process involving both heating and cooling activities. Through IETF funding, the company has created a new thermal storage system, using revolutionary high temperature heat pumps to reduce overall energy by 27% and saving 34% carbon emissions, with the ambition of moving to a purely electrically powered in the long term.

Today's announcement builds on the wide-ranging support that is available to energy-intensive industries. The UK government recognises that businesses are feeling the impact of high global energy prices, including steel producers, which is why the Energy Bill Relief Scheme was launched to bring down costs. This is in addition to more than £800 million of support the government has provided since 2013 to help industrial sectors with energy costs, with many businesses able to bid into government competitive funds worth more than £1.5 billion to support them going green, cutting emissions and becoming more energy efficient.

Niall Browne, CEO, Dunbia (UK), said:

Dunbia (UK), through its parent company Dawn Meats, was the first European beef and lamb processor to make a commitment to the Science Based Targets Initiative. We have been working for more than 10 years to reduce emissions internally and more widely across our supply chain and recognise the urgency to adopt even more aggressive measures to reduce emissions.

We welcome this opportunity to work with the Department for Energy Security and Net Zero to further improve our energy efficiency and cut our carbon emissions.

A Harsco Metalscompany spokesperson said:

Harsco has welcomed the IETF grant offer from the Department for Energy Security and Net Zero to continue its journey to help continue our commitment to innovation and sustainability. With this IETF feasibility funding grant, we have been able to investigate how we can recover heat from our asphalt plant to optimise our use of energy and reduce our carbon footprint.

Phil Potter, the SERPENT Project Manager, said:

The SERPENT feasibility study was a high-risk technology project not aligned with Gestamp's core business activities and would not be completed without IETF support and funding. We have been successful in demonstrating feasibility and initial results look extremely promising with a reduction of almost 10% seen in peak power usage during tool changeover.

We have yet to process that data and analyse the economic viability but we have already demonstrated that this approach improves manufacturing energy efficiency to reduce waste and carbon footprint and support our drive to Net Zero with no impact on press performance.

Iain Grant, Operations Director, Long Clawson Dairy, said:

The production of our Stilton cheese is an energy intensive process involving both heating and cooling activities. With the investment in this project, it has enabled the Dairy to take a more cost-effective approach to energy consumption, alongside a clear carbon emission reduction. This is a substantial investment for a business of our size and would not have been possible without the support of the IETF grant funding.

Notes

Today's £12.4 million represents a combination of winning projects from the final Phase 1 competition window and first Phase 2 competition window

The winners from the IETF Phase 1: Spring 2021 and IETF Phase 2: Autumn 2021 competition windows have now been announced.

• IETF Phase 1 - Spring 2021 project winners
• IETF Phase 2 - Autumn 2021 project winners

There are 22 winners worth £12.4 million in IETF funding for projects costs totalling £38.7 million, subject to contracts being signed.

The winners are from both the Phase 1 Energy Efficiency Deployment competition and Studies competition.

The Scottish government is administering £34 million (£26 million from the IETF) for investment in Scotland and launched the Scottish IETF in December 2020. 

Wider government funding and support for energy intensive industries includes:

• the £289 million Industrial Energy Transformation Fund to help businesses with high energy use - including the steel industry - cut their bills and emissions
• the £1 billion CCUS Infrastructure Fund which supports capital expenditure on transport and storage networks and industrial carbon capture projects
• the £240 million Net Zero Hydrogen Fund which aims to support the commercial deployment of new low carbon hydrogen production projects during the 2020s
• the £55 million Industrial Fuel switching Fund which provides capital funding to promote switching away from more carbon-intensive fuel sources
• the £20 million Industrial Decarbonisation Research and Innovation Centre (IDIRC) which provides capital funding to projects which support fuel switching to hydrogen on in industrial sites
• up to £66 million as part of the Industrial Strategy Challenge Fund, to help key foundation industries, such as steel, develop innovative technology to reduce energy and resource use

Further successful projects will be announced in due course.