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How UK ports are unlocking green growth

A five-step plan for harnessing the energy and talent of coastal towns.

The Port of Barry was once the UK’s leading port for shipping coal. Long before Gavin and Stacey, it was a cacophony of trains, cranes and people sending coal from the South Wales valleys to the world. No more. But recently Associated British Ports (ABP), Barry’s current owner and the UK’s largest port operator, signed a deal to explore how the port could be a hydrogen hub to decarbonise surrounding industries, protecting and growing good jobs. The port is already a net exporter of solar-generated electricity.

Barry is not alone among ABP’s network of 21 ports across Britain in seizing the opportunities that green growth offers for investment and jobs. The Port of Hull hosts the Siemens Gamesa wind turbine blade factory. The Port of Grimsby is Europe’s largest offshore wind turbine operations and maintenance centre, with other significant hubs at our ports of Barrow and Lowestoft. Seventeen of our ports already generate green electricity on site.

And we have even more ambitious plans for the future, including a transformational project to develop a port worth £1bn of investment at Port Talbot to support growth in floating offshore wind in the Celtic Sea. In the Humber, as well as wanting to grow our offshore wind activities, we’re also looking to develop major projects for hydrogen generation and carbon capture and storage with our partners.

All of this activity is not just about utilising our ports to enable rapid and large-scale emissions reduction. It is also about supporting good, existing jobs in sectors like energy, steel and manufacturing. And it’s about growing the new jobs, investment and prosperity that can come from coastal communities that have plenty of potential but currently often face significant socio-economic challenges.

So the question for ABP is not if we agree with Labour’s missions for building economic growth and a rapid green energy transition. Not only do we agree but we are already well advanced on making them a reality in coastal communities all around Britain with, we hope, plenty more to come. Our question is how do we and a Labour government work together most effectively to deliver the change we all want to see at pace and make best use of stretched public finances?

It’s not just about the use of government money. Sometimes huge amounts of public spending are less important than the right, consistent long-term policy environment. It may even, in some circumstances, actually do more harm than good. How can that be? Because there is a lot of private investor capital looking for high quality green infrastructure projects to invest in.

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That investment can often go anywhere in the world and the UK can’t and shouldn’t attempt a subsidy race to the bottom against the US and EU. What we can and must do is make sure we are the best place to invest in green energy according to other measures. So what are these measures?

In sectors such as ports where infrastructure can be around for decades and even centuries, it’s essential to have clarity on the long-term plan and confidence that the plan will be stuck to, and to break down long-term targets into stages where success can be demonstrated and breed more success. At the moment for the Celtic Sea, although there’s a long-term goal for the amount of floating offshore wind capacity the government wants deployed, we lack clarity on some of the practical steps needed to get there, such as how to allocate sufficient seascape to deploy turbines.

Second, we need to have the right rules – carrots and sticks – to encourage builders to use UK supply chains and infrastructure. The UK has been a world leader in the deployment of fixed bottom offshore wind. But many of the supply chain jobs – people building the wind turbines and the components and services that go with them – have too often gone to other countries. The UK stands at the cusp of the next great phase of wind energy (floating rather than fixed) and the serious growth of areas like hydrogen and carbon capture and storage. The government should put in place measures for companies to commit to UK infrastructure and supply chains, embedded into the subsidies and licences it provides to project builders.

Third, fix the grid. Grid capacity issues are rightly now on the agenda. Ports are a part of that story. We are going to go through a transformation in the amount of electricity we and our customers will need to decarbonise and improve air quality. But right now we are facing estimates of the mid-2030s for significant new electricity capacity. This is the single biggest brake on ABP’s own commitment to hit net zero by 2040, a key commitment in our sustainability strategy.

Fourth, make the planning rules sufficiently agile that we can change and grow at the speed required to hit Labour’s ambitious growth and green energy targets. Port development must be responsible and sustainable – economically and socially as well as environmentally. There is of course an essential role for local scrutiny and accountability. But overarching priorities like green growth must also play a role and be recognised in strategic spatial planning and consenting processes.

And then there’s money. Money isn’t the only thing but – used in a limited and targeted way – it is an important part of the overall package of making investment happen. There is a role for government funding in, for example, bridging a gap between when port development has to start and when customers of the port are willing to pay to use the built infrastructure. But the government funding isn’t a substitute for long-term private investment, and must be used to crowd in private capital.

The UK, perhaps in future under a Labour government, will have the opportunity to seize the opportunities of green growth, delivering lower emissions and more jobs. Ports are a cornerstone for realising the generational opportunity. But that won’t happen without real effort and partnership between government and progressive businesses. Here at ABP we recognise that the green growth potential of our ports is not just an opportunity, it’s also an obligation.

This piece was first published on 24 November 2023 in a Spotlight special print edition about Labour policy. Read it here.

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