Investment in Energy Innovation Could Save UK £348bn by 2050

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New analysis shows that accelerating innovation in key energy technologies could reduce the cost of achieving net zero in the UK by up to £348 billion between 2025 and 2050. These savings would be realised by deploying proven but not yet scaled solutions in four crucial areas: air‑source heat pumps, bioenergy with carbon capture and storage (BECCS), direct air carbon capture and storage (DACCS), and offshore wind. Air‑source heat pumps alone could deliver system savings of £110 billion and gross value added of £5.7 billion by mid‑century. BECCS and DACCS could deliver £75 billion and £62 billion in savings respectively, along with GVA gains up to £2.6 billion. Taken together, the full suite of technologies could support £19 billion in value added and sustain around 470,000 jobs.

This insight emerges from the Energy Innovation Needs Assessments (EINAs), a landmark study led by the Carbon Trust in partnership with UCL, Mott MacDonald and Pengwern Associates on behalf of the Department for Energy Security and Net Zero (DESNZ).

The evidence shows that the initial £1 billion Net Zero Innovation Portfolio (NZIP), operational from 2021 to 2025, has already begun delivering results creating 7,500 jobs and attracting £917 million in public and private investment.

However, the report emphasises that scaling innovation requires more than technology development. Barriers such as supply chain limitations, skills shortages and regulatory bottlenecks must be tackled proactively. To harness the full £348 billion savings potential, policymakers, finance, industry and system planners must align on innovation priorities, market creation, and infrastructure readiness. In particular, DESNZ’s upcoming Cleantech Innovation Challenges must be structured to support coordination across stakeholders and spur market demand.

What this means:
This analysis underlines that the cost of reaching net zero can be significantly reduced through strategic investment in technologies already tested but not widely deployed. It reinforces the message that policy must now follow innovation. To capture system‑wide savings, the government and industry must address non‑technical barriers such as supply chain development, workforce training, and regulatory frameworks before technologies are scaled. The evidence-based call to action suggests that now is the time for long‑term, mission‑driven funding, regulatory clarity and collaborative planning, to ensure that net zero is not only achievable, but delivered affordably.

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