New BEAMA report calls for supply chain investment

The UK is at a crossroads in its journey toward decarbonisation, with an urgent need to increase investment in its supply chain to secure the global economic benefits of achieving Net Zero. This warning comes from BEAMA, the trade body representing the UK’s energy infrastructure and systems sector, which launched its first quarterly Market Pulse report published as part of its #AcceleratingElectrification campaign.

The report identifies significant potential for growth in UK manufacturing linked to the surge in demand for low-carbon technologies. However, it warns that without immediate government intervention, the UK could lose out on a share of the £1 trillion global market for Net Zero technologies. BEAMA’s analysis reveals a concerning downturn in investment intentions across the supply chain compared to last year, threatening the UK’s ability to meet its electrification goals by 2030.

Capacity Constraints and Supply Chain Challenges

The report highlights a critical issue: 91% of BEAMA members are operating close to capacity and do not have the resources to handle fluctuations in demand. This shortage, according to BEAMA, poses a significant risk to the UK’s ability to deliver the infrastructure needed for its 2030 decarbonisation goals.

Yselkla Farmer, BEAMA’s CEO, stressed the importance of acting now, saying: “The UK is back in the global race for Net Zero delivery, but a widening gap between required investments and current rates of deployment is stalling progress. Without urgent clarity and decisive action, UK manufacturers of vital low-carbon technologies could be left struggling to meet future demand, forcing the country to depend on foreign supply chains.”

Supply Chain at Risk of Falling Behind

The slower uptake of Net Zero technologies, exacerbated by policy delays and U-turns, has raised concerns about the UK’s attractiveness to investors. Yet, despite the challenges, optimism within the UK’s energy manufacturing sector persists. Earlier this year, BEAMA members, including Schneider Electric and Wilson Power Solutions, made significant investments, signaling that the sector still sees potential.

Schneider Electric recently announced a £42 million investment in a new manufacturing facility in Scarborough, creating 200 green jobs. Kelly Becker, president of Schneider Electric UK & Ireland, said: “This investment highlights our commitment to supporting the UK’s decarbonisation efforts through innovation and local job creation. We look forward to collaborating with BEAMA and the government to ensure electrification remains a top priority.”

However, BEAMA’s report underscores that further investment is required. With only modest increases in investment intentions, the sector’s capacity remains underutilized. The supply chain, particularly in electricity networks, is already operating at full capacity in some areas, but this level of activity is insufficient to meet future demands. BEAMA is calling for more long-term visibility on government expenditure beyond 2030 to enable businesses to plan and scale up their manufacturing capacities.

Labour and Skills Shortages Hampering Growth

A significant concern raised by the report is the lack of skilled labour to meet the growing demand for Net Zero technologies. Fifty percent of BEAMA members expressed an intention to hire more employees, but ongoing shortages in engineering and STEM fields have made it difficult to fill vacancies.

The UK also faces significant challenges in achieving its heat decarbonisation targets. BEAMA estimates that heat pump installation rates need to increase 16-fold by 2030 to meet government targets. Additionally, the slow rollout of smart meters—an essential part of a flexible energy system—could further derail progress. Currently, the UK is 11 years away from a fully functioning smart meter system.

Government Action Required

BEAMA has formed the Electricity Products Supply Chain Council to address these pressing issues and ensure that the supply chain is ready to meet future demands. The council, which includes key industry players, is urging the government to take immediate action to provide long-term policy clarity and establish a clear roadmap for the sector.

BEAMA’s campaign, supported by over 200 members, emphasizes that investment in the supply chain is crucial not only to meet decarbonisation goals but also to secure the UK’s position as a leader in the global Net Zero market. The organisation is calling for ministerial leadership to oversee regular dialogue between the supply chain, infrastructure providers, and the construction industry.

As BEAMA’s report concludes, the UK must act now to avoid missing out on a once-in-a-generation economic opportunity, or risk becoming reliant on external supply chains to meet its Net Zero targets.

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