Energising UK cleantech innovation: Q&A with Sarah Mackintosh, Director of Cleantech For UK
The UK cleantech market is thriving. As the need to combat climate change continues to grow, inventors, engineers and programmers throughout the UK are imagining and creating truly revolutionary solutions that can help cut emissions and drive the UK transition to a clean economy. Companies in the UK are currently leading the way in cleantech innovation, attracting 18% of Europe’s cleantech investment.
Sarah Mackintosh, Director of Cleantech For UK, is at the forefront of cleantech Innovation in the UK. Through her work, she helps to promote and advocate for the UK’s most exciting cleantech innovations. I caught up with her to find out more about the work she is doing with Cleantech for UK:
What is the purpose of Cleantech For UK?
The initiative was launched in February this year and it aims to give a policy voice to investors in UK cleantech. While there are lots of advocacy bodies out there doing amazing work, there was a need for investors in this space specifically.
There are unique challenges for investors in cleantech and we are pushing to give them the optimal policy environment to invest in order to unleash the power of cleantech start-ups. While some in the space are large enough to advocate for themselves, fundamentally, a group of cleantech investors together is a much stronger, more coordinated voice. Our aim is to give them greater focus and amplify their collective needs.
What is your background and why did you join Cleantech For UK?
I was in the civil service for 11 years, primarily working in energy policy – including in the climate space. It’s an area I’ve always been passionate about. When this opportunity came up, I saw it as a chance to shape and lead something entirely new and make a difference in a new way. While there are other advocacy groups that all do a brilliant job, they all have a slightly different focus. What we are doing for cleantech investors in the UK is truly unique.
We do, however, have sister organisations working to achieve the same goals in different regions. They speak either to individual governments or larger bodies such as the European Commission in order to advance our shared goals and give investors advice.
What are the strengths and weaknesses of cleantech in the UK at this time?
We have some amazing universities doing some amazing research, which in turn is leading to world-leading companies emerging from these institutions. And they’re not just clustered in London, they’re appearing throughout the UK. This is helping to create a really strong environment of innovation, with natural clusters of cleantech companies springing up, learning from each other and collaborating. Our investment in offshore wind programmes has also been positive, with the UK only second to China in offshore wind capability.
There are two main issues in the UK cleantech landscape at the moment. The first is the skills in the workforce are not matching up to what companies need to create or scale their innovations. Funding is the second major issue. Because of a lack of strong industrial policy compared to that of our peers – such as the Inflation Reduction Act in the US – it’s harder to implement large cleantech solutions at the moment.
What does the UK need in order to better scale cleantech innovation?
There’s a couple of key issues with scaling. Planning is one. Trying to get planning permission in this country is not easy. First of all, it’s quite a slow process. Second, people don’t necessarily want this sort of infrastructure in their back garden. So, trying to get it approved by a community can be quite difficult. And then there are just so many different regulatory bodies, sometimes you have to make similar applications multiple times. It can take years. On top of that, getting a connection to the UK energy grid can take 10 years at the moment. It’s an ageing grid and the level of investment needed to modernise it hasn’t been there.
Through our research we’ve also found that there is a funding gap for UK cleantech startups at the Series B stage. And while I’m sure that start-ups in any sector would point towards the lack of funding for why they are not growing to this point, cleantech presents its own unique challenges. These innovations often require a large amount of infrastructure so a great deal of capital expenditure is needed upfront in order to commercialise.
How do we overcome these issues?
We are continuing to advocate for a faster planning process in order to get more cleantech infrastructure actually built in the UK. Part of this means engaging with local communities and working with them so that they are willing to host these projects. At the same time, we need to push for a greater amount of investment in the UK energy grid.
Another thing we need is consistent policies from the UK government. The recent rollback on many of the UK’s net zero targets, including the deadline for car manufacturers to phase out petrol cars, is not great for investors. This indecisiveness makes them understandably nervous. There is an argument that the UK was previously leading the rest of Europe on implementing cleantech, but changes like this will mean we lose that advantage.
What level of funding is there currently in the UK for cleantech?
While we do see the gap in Series B, investment is pretty good in the UK at the moment. Public funding is available for a lot of early development, and organisations like Innovate UK are doing a good job of investing in startups.
The problem with the public offering is that it’s quite bureaucratic and often quite confusing. It’s not just a simple tax rebate – you have to know when and how to apply. Start-ups often have to be very savvy to gain this funding as investors as naturally conscious of the current economic climate.
But generally it’s a vibrant space. In our coalition we have very specific cleantech investors, and we see new ones appearing all the time. Like with the start-ups themselves, these investors are not just centred in London meaning start-ups can access them more easily.
What benefits can cleantech investment bring to the UK?
Jobs, jobs, jobs – and jobs in different places. Cleantech doesn’t need to be in London or the Golden Triangle – it can be anywhere and needs to be everywhere. We’re going to need installers right across the country to put this infrastructure in place. Another benefit is productivity. These technologies are becoming more and more efficient, in turn helping to increase productivity of the grid with effective management.
How are we going to keep these innovators within the UK?
Consistent policy. I’m going to keep coming back to it, but it’s vital that the Government makes it very clear how and what markets are going to be like for companies once they start to commercialise their products. There also needs to be policies to help these companies scale-up quickly.
The need for accessible funds is also of vital importance, as is a highly-skilled workforce.
There are these amazing people developing technologies within universities, but what other skills does cleantech need in the UK workforce and how can these be gained?
It’s a great question and one investors are definitely thinking about. I would like to see more government intervention in this space. I think more training is needed. Currently if you wanted to change track mid-career, you would need to pay out of your pocket for the training to allow this. There needs to be more incentives to allow people to retrain and develop the skills needed to help cleantech scale in the UK.
I’ve also seen some impressive and interesting schemes from start-ups. Mienergi, an EV charging start-up, couldn’t find candidates with the right skillset, so created its own school to give staff the skills they needed to install their infrastructure.
Looking forward, what are the areas that you expect to see UK cleantech innovators looking to tackle?
Industrial decarbonisation is a really big area that cleantech companies could innovate in, as well as sustainable aviation fuel. Obviously the creation of green energy is a huge area to tackle, but so is looking at constructing more energy efficient buildings. We have some of the oldest housing stock in Europe, so increasing its energy efficiency, even through insulation schemes, is vital for the UK.
Like in many other sectors, AI has a major role to play in cleantech. Its ability to process vast amounts of data points rapidly means it will be vital for optimising energy use and efficiencies. The Internet of Things and smart grids can also help to make everyday items more energy efficient while not sacrificing their usability.