Consultation on the Industrial Energy Transformation Fund

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Food_Manufacture_Sponsors_2020_Business Leaders_781x285The Department for Business, Energy and Industrial Strategy (BEIS) has launched a consultation asking for input on the final design of the £315 million Industrial Energy Transformation Fund (Fund), the aim of which is to help industry improve energy efficiency and reduce carbon emissions.

The consultation on the Fund, which closes on 21 November 2019, is part of a wider strategy to deliver the UK’s legally binding commitment to reduce or offset greenhouse gas emissions to net zero by 2050, the proposals include supporting energy efficiency and decarbonisation technologies.

According to the consultation, the Fund will support businesses with high energy use to:

  • cut their bills and emissions through increased energy efficiency
  • reduce their emissions by decarbonising industrial processes.

The consultation outlines Government’s proposals in relation to:

  • who will be eligible to apply to the Fund
  • which technologies will be supported
  • the provision of support for feasibility studies
  • the different types of funding support available
  • the delivery of the Fund.

The Fund has significant applicability to the food and drink sector. Improvements to compressed air systems, refrigeration and storage and process optimisation are all offered as potential examples of grant applications within the food and drink sector. It is also proposed that the Fund provides finance for Feasibility and Front-End Engineering and Design (FEED) studies for projects deploying such technologies and for providing expertise for such studies.

The consultation recognises the potential for significant gains in the food and drink sector where two-thirds of energy use is from natural gas. Replacing natural gas with low carbon fuels, using heat pumps to support low temperature processes, and introducing technologies such as mechanical vapour recompression, ultraviolet pasteurisation or sterilisation and infrared heating, could all deliver efficiencies.

Applications for phase 1 of the Fund open in the summer of 2020 and a minimum award of £1 million per project is proposed.

WM comment

We encourage all our food and drink clients to review the consultation. Please contact Richard Naish, Ben Sheppard or your usual Walker Morris contact for further information or advice on the Fund and how you can procure and invest in energy efficiency and carbon reduction projects which will add long-term value to your business.