Although the UK has set out ambitious clean energy targets, it risks lagging behind the US and the EU in attracting the required investments, two of the country’s energy trade organisations have warned.
Ahead of the Chancellor’s Spring Budget next month, Energy UK and Renewable UK have published two separate reports, calling on the government to implement measures and rule changes that will enable the UK to attract vital private investment in renewables.
“The renewable energy sector is facing a perfect storm this year.
According to Energy UK’s report, investment in low-carbon electricity generation “has deteriorated significantly” in the past months, owing to soaring inflation, increasing interest rates, supply chain difficulties, policy uncertainty, and “poorly designed” windfall taxes that presently “favor oil and gas extraction.”
The trade organisation estimates that an additional investment of £500 billion would be needed between now and 2050 to meet the UK’s Net Zero goals. But without government action, it expects a £62 billion investment loss by 2030. This would translate to a shortfall of 54GW of potential wind and solar capacity — enough electricity to power every home in the UK.
“The UK is in increasing danger of undermining its own ambitions and failing to deliver on its commitments, “Emma Pinchbeck, Energy UK’s CEO, said. “In many ways, the UK has led the way in the transition to clean energy — witness our world-leading offshore wind industry — but we risk squandering this position and driving the investment that we need elsewhere.”
The fierce global competition for investment, skills, and supply chains was also cited by Renewable UK’s Executive Director of Policy Ana Musat, who highlighted that “the US and the EU are in a race to offer incentives to clean energy investors.”
Both trade organizations are calling for measures such as implementation of more attractive regulations, faster project planning, more sustainable renewable electricity prices, and new fiscal measures policies like reforming the windfall tax and respective tax reliefs.
“We are at a pivotal point right now with other countries actively trying to attract the same companies and investors and it would be unforgivably complacent to think that we don’t need to do the same,” Pinchbeck noted. “This is a once-in-a-generation opportunity and if we don’t seize it now, we will miss out not just on cheaper, cleaner energy but on the huge boost to our economy such investment will bring in terms of growth, jobs and other benefits.”