UK risks falling behind on clean energy transition

The UK is at risk of falling behind in the rush to become a global leader in renewable energy due to a lack of investment, trade body Energy UK has said.

A new report shows that inadequate government policies are leading to insufficient growth in the renewable sector, undermining climate ambitions and potentially damaging the economy.

Low carbon projects are reporting cost increases of about 50% in recent months, with an estimated £500 billion needed between now and 2050 to deliver the UK’s net zero goals.

Energy UK’s chief executive Emma Pinchbeck is urging the government to take urgent action to address a range of factors that are threatening the UK’s renewable sector.

She said it was ‘absolutely clear’ that rapidly expanding ‘clean, cheap power’ was required to escape the energy crisis and reduce reliance on fossil fuels that have ‘cost us dearly in recent times.’        

She added: ‘However, the UK is in increasing danger of undermining its own ambitions and failing to deliver on its commitments. 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.

‘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. 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.’

Inflation, interest rates and supply chain difficulties have all contributed to higher costs for renewable projects. Energy UK’s report says a windfall tax system which favours oil and gas and policy uncertainty resulting in planning and infrastructure issues have also added to the situation.

Nations across the world are competing for renewable investment, with high UK costs driving private sector funding elsewhere.

The UK could miss out on £62 billion in investment between now and 2030, according to the report, which could lead to a shortfall of 54GW of wind and solar capacity – enough to power every home in the country. This could also harm consumers, as high energy bills will remain high.

Energy UK says the government should reconsider its fiscal policy to attract investors through a  reformed windfall tax and by enhancing incentives. Maximising the amount of generation supported by the Contracts for Difference scheme could also reduce costs and boost low-carbon energy projects.

Photo by Anna Jiménez Calaf