Market Update United Kingdom Week 20

Here's the latest from the last couple of weeks in the UK.

Circular Economy: Innovation Norway in London have focused more strategically on Circular Economy over the last couple of months. ReLondon is our main partner in the circular space, and we were presented with their report and findings last week. Key findings:??

• There are 26 policies operating at national, regional and local level that together favour London’s transition to a circular economy in food, plastics/packaging and the built environment - with a higher prevalence of national policies around plastic/packaging, and more regional or local policies around food & the built environment.?
• Policies typically seek outcomes related to minimising waste and increasing resource efficiency, although some also focus on reducing carbon emissions and economic recovery.??
• London is already seeing a growing market in circular business innovation. These offer solutions that go beyond what is demanded by policy or regulation. Circular solutions in food and the built environment tend to focus on processing waste at end-of-life, whereas those in packaging tends to focus on preventative measures to avoid use of single-use packaging.?
• Norwegian businesses seeking to enter the UK market must consider the waste management context (e.g., service provision and recycling targets) as well as the government’s economic recovery agenda for UK businesses in positioning and targeting their products and services.?

For more information on Circular Economy opportunities in the UK contact Maren Jervell Lund .??

• Ellen MacArthur Foundation recently launched Circular Startup Index. The Foundation’s Circular Startup Index is a searchable, public database featuring more than 500 startups across a range of sectors, industries, and geographies, providing unprecedented visibility of these circular solutions. Norway has 5 companies listed so far. Again X, Grin, Empower, Packoorang, SIRQL?

TECH:

Funding - London continues to be an attractive destination for VC funding despite the overall decline in VC investment in the UK. Q1 2023, VC investment in the UK dropped to ï¿¡2.9 billion ($3.6 billion), the lowest since 2020. However, London still managed to attract two-thirds of the investment. Prominent deals in the capital included fintech Abound, the Bank of London, and EV company One Moto. The report acknowledges that economic uncertainties have contributed to the decline in VC investment but expects B2B technology enablement to drive future investments. Despite the global challenges and uncertainties, alternative energy and cleantech sectors have remained resilient, while consumer retail has struggled. KPMG Venture Pulse??

Foreign Direct Investments (FDI)?- The UK ranked second in EY's 2023 UK Attractiveness Survey for its ability to attract Foreign Direct Investment (FDI) projects, despite a decline in activity in 2022. France remained the top European country for total project numbers.?

• The UK outperformed Germany and France in terms of new projects and job creation, reflecting a shift in strategy to focus on value over volume when attracting FDI.?
• While the number of FDI projects in the UK decreased by 6.4% in 2022, the country performed well in terms of project value, job creation, and Research & Development (R&D) activities.?
• The decline in overall project numbers was mainly attributed to a significant fall in digital technology projects, the UK's leading sector for FDI. However, the UK still led Europe in tech FDI.?
• Political uncertainty, the ongoing impact of Brexit, and Europe-wide factors like high energy prices and inflation influenced the UK's attractiveness for FDI.?
• The United States remained the leading source of FDI projects for both Europe and the UK, while India emerged as the second most important source for the UK.?
• Foreign Direct Investment: UK remains second in Europe despite a fall in project numbers | EY UK?

Energy: ?

Sustainability superpower: UK can unlock more than ￡70bn of economic benefits and export ￡17bn of renewable energy a year?The race to net zero presents the UK with a once-in-a-generation economic opportunity, unseen since the discovery of oil and gas reserves in the North Sea in the 1970s, according to a landmark report. The UK could unlock more than ￡70 billions of economic benefits a year if it adopts a bold strategy of going “beyond net zero” to become a world leader in clean energy, a report by the UK Business Council for Sustainable Development has found.?

Offshore Wind:?

Wind is the main source of UK electricity for the first time. Wind turbines surpassed gas in generating electricity for the first time in the UK, with a third of the country's electricity coming from wind farms in Q1. Additionally, April saw a record period of solar energy generation. The UK aims to achieve net-zero emissions for all electricity by 2035. However, there are still obstacles to overcome in transitioning to a completely fossil fuel-free grid. Most of the UK's wind power comes from offshore wind farms, as onshore wind turbine installations have been restricted since 2015. The government plans to relax planning restrictions to expedite development. ?

Ireland has provisionally approved its first mega wind farm off the west coast, aiming to power six million homes with renewable energy by 2030. EirGrid has announced four successful projects in its offshore wind auction, with a combined capacity of three gigawatts (GW) to power 2.4 million homes. The projects, using fixed turbines, would be Ireland's largest renewable energy ventures to date. The €2 billion Sceirde project, in southwest Connemara, would feature around 30 turbines with 300m blades, generating approximately 450MW. First large wind farm off west coast among four offshore energy auction winners – The Irish Times The winners:?

- EDF Renewables UK & Ireland and Fred. Olsen Seawind: 1.3 GW?

- RWE: 824 MW?

- Statkraft: 500MW?

- Corio Generation: 450 MW?

Hydrogen:?

The Department for Energy Security and Net Zero will host an online launch briefing event on the HAR2 market engagement document and the call for evidence on competitive allocation, Thursday, May 25.?Additionally, three workshops will be held to gather views on the design of HAR2, covering topics such as eligibility criteria, capital expenditure support, and other aspects outlined in the market engagement document.?

Hydrogen Allocation Round 2: market engagement - GOV.UK (www.gov.uk)?

HAR2 Market Engagement and Call for Evidence briefing event (office.com)?

CCS/ CCUS:?

In Britain's first licensing round for offshore carbon dioxide (CO2) storage projects, twelve companies have been awarded a total of 20 licenses, according to the North Sea Transition Authority (NSTA). The aim is to use carbon capture and storage (CCS) technology to store 20 to 30 million tonnes of CO2 underground by 2030. The injection into the storage sites, including depleted oil and gas fields and porous rock formations, could begin within six years pending additional leases and approvals. The awarded licenses supplement existing CCS projects under negotiation as part of a government pilot scheme. The names of the successful bidders are yet to be disclosed. Britain awards 20 offshore carbon storage licences to 12 firms | Reuters?

Tourism:

The Cost-of-Living crisis continues in the UK with interest rates at their highest level in 15 years and an increase in food prices of nearly 20% over the past year.?But, the tourism industry is still buoyant – we saw it during the previous financial crisis, and we see it again now – Brits are prioritising holidays over other luxuries such as eating out and home improvements. Consumer research from PWC shows that 23% of the people asked are planning on spending more on holidays this year compared to last, especially those aged 55 and over. This trend is mirrored in what we hear in conversations with our tour operators. They are reporting an increase in requests about Norway and that those booking are spending more.?

In other news – what's being talked about in the UK:?

• The UK has a PR plan masquerading as a industrial strategy – The Guardian??
• Norway under pressure to scale back fossil fuel expansion plans - Campaigners say development of huge Rosebank field in North Sea would drive climate breakdown.
• UK police could expand their use of facial recognition software despite widespread concerns over the ethical implications of the technology.?
• Vodafone to cut 11,000 jobs as new boss says firm 'not good enough' - The cuts equal around a tenth of its global workforce and will affect its UK headquarters and other countries. ?
• Farm to Fork summit in Nr. 10 about the British horticulture sector. Government commits to 2024 seasonal worker scheme ahead of food summit.
• BT to cut 55,000 jobs with up to a fifth replaced by AI?Telecoms giant BT is to shed up to 55,000 jobs by the end of the decade, mostly in the UK, as it cuts costs. Up to a fifth of those cuts will come in customer services as staff are replaced by technologies including artificial intelligence. ?
• Former Cabinet minister Jacob Rees-Mogg has suggested that the government’s introduction of voter ID was an attempt at “gerrymandering” that backfired against the Conservatives.?

Upcoming events: ?

Global Offshore Wind London 14. - 15. June –Norwegian Pavillion and networking event. Team Norway is hosting a networking reception on the evening of June 13. For more info on our participation at this event contact Mari Mogstad Eri

London Tech Week – 12.-16. June ?

The event will bring together influential founders, business leaders, policymakers, investors, and emerging talents. The focus will be on exploring transformative technologies and unlocking new opportunities.??