Launch of Phase 2 of the Industrial Energy Transformation Fund

Posted on: 22/09/2021
Production line of baking cookies

Phase 2 of the Industrial Energy Transformation Fund (IETF), designed to help energy intensive industries and businesses with high energy use to cut their energy bills and carbon emissions, will open on 27 September 2021. Industrial sites in England, Wales and Northern Ireland can bid for up to £60m in grant funding.

The IETF is a crucial part of the government’s strategy for tackling climate change and reaching Net Zero by 2050. By supporting businesses to cut their bills and emissions through increased energy efficiency and decarbonisation, it will complement other government programmes that offer innovation and early demonstration support and will help to transform an important part of the UK economy.

Phase 2 of the IETF will be split into four ‘windows’, worth around £220m. The budget for the Phase 2 Autumn 2021 competition is up to £60m. The remainder of the Phase 2 funding will be allocated in future competition windows which are currently anticipated to open in January, May and October 2022, enabling industry to apply in line with internal investment and replacement cycles.

The fund supports the commercial roll out and permanent installation of technologies at industrial sites, rather than general research, development and testing of a technology solution. The competition will provide grant funding towards the costs of:

  • Deployment of mature energy efficiency technologies that improve industrial process energy efficiency and reduce energy demand.
  • Deployment of deep decarbonisation processes or technologies to help businesses decarbonise their industrial processes
  • Feasibility and engineering studies for projects deploying mature energy efficiency technologies or deep decarbonisation technologies.

All projects must relate to improvements to an existing industrial process at a manufacturing site or data centre. Following stakeholder feedback, the minimum thresholds for grant applications have been lowered.

Details of the grants are:

  • Energy efficiency deployment – grant size must be £100,000 – £14m
  • Deep decarbonisation deployment – grant size must be £100,000 – £30m
  • Studies (both energy efficiency and deep decarbonisation)
    • Feasibility – total eligible costs must be at least, £30,000. Maximum grant can be up to £7m
    • Engineering – total eligible costs must be at least £50,000. Maximum grant size can be up to £14m

The competition will run until Monday 6 December 2021.

KTN and BEIS hosted a competition briefing event on 6 October, 10am-12.30pm, to give potential applicants information about the funding opportunities. To view the recording, click here.

For more information on IETF Phase 2: Autumn 2021 and to view the applicant guidance, click here.

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Jenni McDonnell MBE

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Jenni McDonnell MBE

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