Thought Leadership

Public and Private Support for Clean Energy Companies in the UK

Client Updates

Although the UK is recognised as one of the most important international markets for cleantech,1 young clean energy companies have historically found it challenging to secure late-stage funding, especially when compared to other industries which are popular in the UK entrepreneurial ecosystem. By way of example, in the UK, fintech startups secured a combined £9.6 billion worth of investments in 2021, compared to £1.24 billion secured by energy-tech startups. Investor reluctance is often attributable to the high initial investment and longer path to revenue that is usually characteristic of energy-tech startups. As a result, nearly half (47.6%) of energy-tech companies in the UK are stalled at seed stage.2

However, the light at the end of the tunnel could be not just near, but here – in the form of not only significant government support, but also meaningful private investment directed at the cleantech space.

In November 2020, the UK Government announced a £12 billion “Ten Point Plan” to lead a “Green Industrial Revolution.” The plan aims to generate £42 billion of private investment by 2030, with the goal of reducing UK emissions by 180 million tonnes of carbon dioxide equivalent between 2023 and 2032. The 10 areas which form the focus of the Plan are offshore wind, hydrogen, nuclear power, shift to zero emission vehicles, greener transportation, homes and public buildings, carbon capture, protecting our natural environment and finally green finance and innovation.

Of the ten areas, we have examined how the final one – green finance and innovation – presents valuable opportunities for companies in the energy-tech space to access much-needed public and private funding and support.

Aiming to raise its total R&D investment to 2.4% of GDP by 2027, the Government directed £100 million of investment into new greenhouse gas removal technologies in its Ten Point Plan. Building upon this initial investment, it also instituted the £1 billion Net Zero Innovation Portfolio, which aims to accelerate the commercialisation of low-carbon technologies, systems and processes in various industrial sectors. The portfolio is designed to focus on priority areas such as floating offshore wind, nuclear advanced modular reactors, energy storage and flexibility and hydrogen.

In the Plan, the Government has pledged an additional £100 million for energy storage and flexibility innovations, noting the increasing importance of such technologies as the UK advances/accelerates its reliance on renewable sources of electricity generation and must counteract their inevitably less predictable generation.

In conjunction with its commitment to advancing nuclear technologies as set out in Point 3 of the Plan, the Government has emphasized its plans for investment to support the effective commercialization of nuclear fusion technology. Separate from its £222 million investment into the existing STEP programme (which aims to build the world’s first commercially viable nuclear fusion power plant in the UK by 2040), the Government has also channeled £184 million towards developing new fusion facilities, infrastructure and apprenticeships in the UK.

As a form of public funding, the Government issued its first Sovereign Green Bonds in 2021, which raised £10 billion to finance sustainable projects and infrastructure. Not only was this the largest inaugural green bond issuance ever undertaken by a sovereign, but in 2022 the Government announced that it was set to raise another £10 billion from green gilts in 2022-23, with transactions scheduled quarterly.3

Alongside public funding, the Government is also encouraging greater private investment in green innovation, building on 2019’s Green Finance Strategy and the corresponding launch and seed funding of the Green Finance Institute – which has established a Coalition for the Energy Efficiency of Buildings, a Zero Carbon Heating Taskforce and a Green Finance Education Charter. To enforce greater transparency around companies’ environmental impact, the Government aims to mandate reporting of climate-related financial information across the economy by 2025, aligned to the recommendations of the Taskforce on Climate-related Financial Disclosures. Together, the Government feels that these measures will provide investors a clear framework in which to deliver the low-carbon finance needed to achieve net zero by 2050.

In addition to this significant government support, energy-tech startups can now look forward to an enthusiastic influx of private capital as well. Venture capital investment in cleantech has more than doubled in just one year, from approximately £1.24 billion in 20214  to approximately £3.15 billion in 2022.5 Furthermore, as recently as 15 February 2023, the government announced the launch of Cleantech for UK - a coalition of investors, entrepreneurs and policymakers with combined funds of over £4 billion. This initiative aims to facilitate the commercialization of the UK’s scientific research by cutting-edge cleantech companies.

This is a unique moment in that the public and private support for clean energy technologies in the UK today is positively overwhelming. Companies in the energy-tech space would do well to take advantage of this incredible opportunity to fuel their worthy ambitions.

Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit

Related Professionals