09 Dec 2021

Innovate UK: Driving the electric revolution

With COP26 now firmly in our rear-view mirror, we have been left with some clear goals that we need to achieve if we are to stand a chance of avoiding catastrophic climate breakdown. From transportation to renewable energy generation, embracing and supporting the evolution of electrification will be critical if we are to remain within the target limit of 1.5°C global warming. To this end, time is running out and research and development – particularly within manufacturing processes – will determine our success.

Totalling nearly £80 million, UK Research and Innovation’s (UKRI) Driving the Electric Revolution challenge – a government-funded programme – is investing in the scale up of manufacturing of Power Electronics, machines (motors) and drives (PEMD) – the underpinning electrification technologies that will make Net Zero a reality.

This challenge is the UK’s most important intervention into PEMD, providing funding opportunities for collaboration between SMEs, big businesses and academia to create innovative and cost-effective solutions that will apply to every sector. It also works to establish ‘best-in-class’ industrialisation facilities to create robust and resilient UK supply chains.

Importantly, PEMD are a suite of enabling technologies that often determines the performance of, and provides the competitive advantage for, much more expensive devices or systems that make electrification possible. As such, there is a real disconnect between the importance of PEMD to the economy and its direct market value.

The UK is demonstrably world-leading in academic and industrial research in the design and development across the whole PEMD supply chain with opportunities to become world leaders in the design and manufacture of these components.

We have the unique opportunity – including the potential – to develop our existing strengths within the PEMD market, filling gaps in the supply chain whilst onshoring the manufacture of these components. Ripe for investment, the UK has the potential to achieve a substantial share of this rapidly growing global market, leveraging existing competitive advantages including existing research and manufacturing bases in some key PEMD technologies.

Current estimates for the size of the global power electronics market size vary. Conservative estimates place this at $23.25 billion USD in 2019 growing to $36.64 billion USD by 2027; more optimistic estimates suggest this could be closer to $40.39 billion USD in 2020 growing to $59.40 billion USD by 2026.

The market for drives is of slightly similar size; but nonetheless significant - estimated at $17 billion USD in 2020 growing to $20.40 billion USD by 2027. The market for electric machines far exceeds that of power electronics but is growing at a slower rate; however, it should be noted that the large majority of electric machines are used in motors for which the global market was $97 billion in 2017, and projected to reach $137 billion in 2025, growing at a CAGR of 4.5%.

The recently announced ‘Greening Finance – A Roadmap to Sustainable Investing’ focuses on the first phase of the government’s push for Net Zero in finance and sets out its ambition to make the UK the best place in the world for green and sustainable investment. Delivered through new economy-wide Sustainability Disclosure Requirements, its aim is to shift financial flows to align with a Net Zero, nature-positive economy.

The disclosure requirements will include reporting under the UK Green Taxonomy, which details a robust list of economic activities that count as environmentally sustainable, which is great news for investors managing sustainably-focused portfolios. Financing PEMD research, development and manufacturing scale-up all fit within these green economic activities.

The government have made it clear, through the greening finance roadmap, that Power Electronics, Machines and Drives are an important part of the green industrial revolution. As well as this, the global push for electrification and the solid R+D base make the UK PEMD industry a smart investment proposition.

This article was written by Venn Chesterton, Deputy Director,  Driving the Electric Revolution at Innovate UK. Learn more about this author here. Innovate UK is part of UK Research and Innovation, a non-departmental public body funded by a grant-in-aid from the UK government. 

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