Innovation: Finance

(asked on 16th December 2020) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment his Department has made of the potential merits of supporting the introduction of an Innovation Power Purchase Agreement to allow early stage technologies reach commercial readiness.


Answered by
Anne-Marie Trevelyan Portrait
Anne-Marie Trevelyan
Minister of State (Foreign, Commonwealth and Development Office)
This question was answered on 18th January 2021

BEIS officials continue to engage with wave and tidal stream developers to understand their cost-reduction trajectories, where those savings are likely to be found and, importantly in light of declining costs for other renewables, whether there may be a rationale for funding arrangements outside of the CFD.

The Marine Energy Council is also looking at alternative funding models for early tidal array deployment outside the Levy Control Framework, which they refer to as the Innovation Power Purchase Agreement (IPPA). However, given that the IPPA is based on a tax measure which is the responsibility of HMT, it would be for Treasury ministers to decide on the desirability of such an instrument.

BEIS also supports the progress of early-stage technologies to commercial readiness through the £505 million Energy Innovation Programme. The Programme includes:

  • The Energy Entrepreneurs Fund (EEF) is a competitive grant funding scheme to support SMEs in the development and demonstration of state-of-the-art disruptive technologies, products and processes. Since 2012 the EEF has invested around £72 million of grant money in over 156 companies leveraging over £100m in private investment.
  • £20 million investment in a new venture capital fund: the Clean Growth Fund. The HMG investment is matched pound for pound by private sector investment and the Fund Manager has ambition for the Clean Growth Fund to reach £100 million by autumn 2021.
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