Industrial Fuel Switching Competition: UK Government unveils almost £50m of new funding

Pictured: Aerial view of Port Talbot

The Department for Business, Energy and Industrial Strategy (BEIS) announced the move late last week, following the awarding of £5.6m through the first phase of the Competition earlier this year.

This initial funding was split between 21 early-stage feasibility studies for fuel-switching technologies and projects. For the new, second phase, projects which are more mature can apply. However, they should be for pre-commercial solutions.

Applicants will need to put forward proposals for replacing fossil fuel use with hydrogen, biomass, waste-derived fuels or electrification. For example, the first phase supported one project developing electric heat pumps for food and pharmaceutical businesses.

Other fuels, like synthetic fuels, will be considered if the applicant can prove they are “net-zero-compatible”.

Each successful project will receive a funding share between £1m and £6m. Applicants have until 2pm GMT on 11 November to submit a registration form, and must then complete their applications in full by 2pm GMT on 25 November.

BEIS has emphasised that fossil fuels accounted for 55% of industrial energy consumption in 2019 and that this will need to decrease significantly for the industrial sectors to align with the UK’s long-term net-zero plans.

“Supporting British industry to end their dependency on fossil fuels is a vital part of the government’s plans to boost domestic energy resilience, alongside accelerating renewables and scaling up nuclear,” the Department said in a statement issued to media representatives.

Business and Energy Minister Lord Callanan added that fossil fuels are “expensive” and that scaling up alternatives is necessary to “drive down costs”.

BEIS announced last week plans to freeze the price of electricity and gas for UK-based businesses of all sizes, as well as public sector and voluntary sector organisations. For at least six months from 1 October, these organisations will pay a new “support price” that is in line with the frozen price for UK homes.