How low carbon energy investment can transform the UK
Energy UK today launches The Clean Growth Gap – a new series of reports and analysis looking at how the UK can once again lead the way in attracting investment in clean energy and respond to the challenge posed by growing competition from the USA and Europe.
The opening report, How low carbon energy investment can transform the UK, published today in partnership with Oxford Economics, sets the scene for the project. It highlights the challenges in attracting the huge amount of private sector investment required to fund the energy transition but also the opportunity it offers to transform the UK’s economy and bring jobs, skills and growth to the areas of the country that need them most.
The report notes the UK’s remarkable progress in decarbonising the power sector with its world-leading clean energy industry helping halve the UK’s economy-wide emissions since 1990 as well as boosting the economy through the direct employment of 247,000 workers and generation of £54.4 billion in annual turnover.
However it also identifies worrying signs that the UK is starting to fall behind other countries. The UK is forecast to have the slowest growth in low carbon electricity generation of the world’s largest eight economies between now and the end of the decade – with low levels of expected investment a significant factor. In addition, the UK’s renewable capacity per capita is currently lower than both the EU and the USA – with both France and Germany having double Britain’s.
With the USA, through the Inflation Reduction Act, making a huge play to attract clean energy investment and the EU bringing in its own measures in response, global competition for funding from international investors is intensifying.
The Office for Budget Responsibility estimates that over 70% of the clean energy investment needed will come from the private sector and could help deliver the anticipated 480,000 jobs that a net zero transition could support by 2030. The potential for clean energy developments in traditional industrial areas also means that those benefits would be spread across the country.
The report is being officially launched at a webinar this morning where Energy UK’s chief executive, Emma Pinchbeck and Oxford Economics’ Director Andy Logan will discuss the key findings of the project so far and look ahead to the programme of analytical work to come over the summer.
Energy UK’s chief executive Emma Pinchbeck, said:
“We’re at a crossroads and we can’t afford to stand still. The UK can be rightly proud of the progress we’ve made through our world-leading technologies and expertise and the economic benefits it has brought. But if we don’t build on these foundations, the head start we had will soon be replaced by us trailing behind.
“The prize is huge if we choose to seize it but plenty of others are eyeing it up. While we can’t match the US for subsidies, we can – as we have done previously – create a climate that gives private investors every reason to put their money into the UK rather than elsewhere.
“Do that and the energy transition – and the established and emerging technologies it encompasses – will not only help ensure our future economic prosperity but fulfil their potential to profoundly improve all our lives.
“We hope this project will contribute to a frank discussion and in the forthcoming papers identify what the UK needs to do to reap the benefits from completing the transformation to a low carbon economy.”
Further reports in the series will consider:
- How the environment for clean energy investment varies between the UK and other key markets.
- What the potential is for people, communities, and local economies across the UK.
- The economic potential of investment in the technologies that power the energy transition
