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The new centre, based in Loughborough leading the Midlands Consortium, is intended to bring more focus, ambition and collaboration to the UK's energy, science and engineering drive. It will have a potential budget of over £1bn.

The ETI will bring together some of the world's biggest companies, including BP, Caterpillar, EDF Energy, EON, Rolls-Royce and Shell.  Its remit is to will be to promote research and development and to call on businesses to come up with big ideas and inventions that will help the UK to cut CO2 emissions, deliver more efficient energy, and to guarantee the UK has the energy supplies it needs now and in the future.

Mr Denham said:
"The Institute will deliver solutions to help make the energy in our homes and businesses safer, cheaper and more sustainable for the future. It will do so by bringing together skills and expertise from the public sector, businesses large and small and the wider research community to transform our carbon footprint as quickly as possible.

"This will help to establish the UK as one of the leaders in global clean energy development and deployment."

John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, said:
"The establishment of this new Institute at Loughborough now gives us a truly strategic focus on research and development of low carbon energy technologies, helping make the UK a world-leader in this area.

"This unique public/private partnership, together with the new BERR/Defra Environmental Transformation Fund, will make a real impact on key energy research challenges and our ability to deploy new technologies quickly, to accelerate progress towards a low carbon economy and to help ensure a secure energy supply over the long-term."

Mr Denham also announced the appointment of Dr David Clarke as the ETI's new Chief Executive.

The Government is putting up to £550 million into the programme over the next 10 years. Joint investment from the private sector will, it is hoped, double funding to over £1 billion.

Mr Denham said:
"I believe David is ideally equipped to take the Institute forward and help it deliver. It means a great deal to have someone with David's knowledge and experience to lead the organisation."

The location of the Institute will be at Loughborough University campus and will be run by the Midlands Consortium (Universities of Birmingham, Loughborough and Nottingham). The decision follows a nine-month evaluation exercise with bids assessed on energy research capability, reputation and culture, site facilities and commitment to ETI.