Net Zero could represent a huge opportunity for the UK’s supply chain companies, and some could grow ten-fold, according to manufacturers association Beama (British Electrical and Allied Manufacturers Alliance). But companies need both market confidence and government support to make the upfront investment that will deliver the country’s aims at least cost, and the industry will struggle to recruit to meet the need for a hugely increased workforce. Beama called for the government to set up a Supply Chain Council to be tasked with the development of a five- to ten-year roadmap to support the necessary investment in the supply chain. That would include linking with other strategies such as critical materials supply, electrical equipment standards and, critically, skills development.
Launching the report, speakers noted that among the investment needed was reinforcement of local electricity grids and domestic connections – but they said manufacturers could also help manage the issue of grid congestion, if they were able to provide low cost systems to manage domestic equipment such as EVs, PVs and appliances, so that grid interaction was minimised.
Beama’s research found that to meet the UK’s Net Zero targets its members will need to scale up operations significantly. Of those surveyed, more than half expect to increase capacity by 50-100% to meet future levels of output, and some members expect demand for their services to increase ten-fold. Less than 15% of members thought they would increase capacity by 20% or less.
The manufacturers said the biggest challenge was the insufficient quality and quantity of labour in the current marketplace. The industry would need twenty times the current installer base for low carbon heating to achieve projected deployment rates. Beama said “The skills needed to jointly assess, install, and advise on zero carbon technologies are not available at scale, and integration from both a systems perspective and labour perspective are currently missing.”
When it came to taking decisions to invest, the organisation’s members said they were affected by market conditions and uncertainty around policy. It was not clear which pathway the UK will take to reach Net Zero and “this uncertainty stalls investment, which in combination with low consumer confidence and awareness, inhibits the pace and scale of uptake needed”.
Beama said that from government “An over-reliance on short term subsidy funding and grants means that there is an expectation that top-down government policy and decision-making will ultimately drive technology choices and uptake by consumers. This is thought to be a barrier to innovation.” What is more, “previous UK Government U-turns have left a bit of a bitter taste in the mouth for manufacturing, where we have invested on a promise of policy direction, but it hasn’t manifested itself.”
Instead, respondents wanted a more outcome-based policy framework with long-term demand pull backed by legislation. That had to be stronger than the current Heat and Buildings Strategy.
It called for support in the form of tax breaks, subsidies, new standards and better enforcement of existing standards to give industry stronger grounding on which to accelerate investment.
Download the report here