Government urged to spend £5bn to unlock £100bn green recovery
A group of businesses, mayors and political leaders have called on the Conservative government to spend £5bn to deliver on its promised manifesto pledges in order to unlock £100bn in capital investment on energy efficiency and create more than 300,000 green jobs.
Convened through the UK100 - a network of over 100 mayors and local leaders from across the country – studies supported by EDF and Siemens have found that unlocking private sector investment could deliver a net return of £100bn to help build a green economic recovery.
The £100bn benefit would include £40bn for energy efficiency improvements and technologies, which would exceed the £9.2bn target promised in the Conservative manifesto. However, the research report, sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), states that an initial development funding amount of £5bn is required from Government to kickstart the green recovery.
The UK100 will present the findings directly to energy minister Kwasi Kwarteng today (13 July). The study additionally states that the package could help create 300,000 jobs across the country.
It has been published following the Chancellor’s summer economic statement which prioritised a national programme for home insulation. However, only £2bn has been committed towards this area, despite the Government committing £9.2bn in its manifesto.
UK100’s director Polly Billington said: “If ministers are to meet their manifesto promise on energy efficiency in our homes, which are some of the leakiest in Europe, they need to kickstart a renewable revolution. This would help hard-pressed consumers save on their fuel bills, support hundreds of thousands of jobs and protect the environment.
“£5bn now would unlock £100bn to rescue the UK economy and deliver on the Prime Minister’s ambitions of levelling up and meeting Net-Zero. The Chancellor’s statement, while welcome, should have had far more front-loaded investment.”
The study calls for investment to be unlocked to improve the energy efficiency of UK homes, which account for around 18% of the UK’s emissions, largely from natural gas use for heating and cooking. According to the UK Green Building Council, the net-zero target will require almost all of the UK’s 29 million homes to be retrofitted.
The analysis suggests that a potential pipeline of energy efficiency measures could grow to £100bn, with £40bn coming from energy savings in homes and business, £10bn for renewables, £30bn for low-carbon heating solutions, £10bn for smart energy systems and £10bn for low-emission transport.
However, access to finance is currently complex. There are currently 27 grants and funding streams available for local energy projects via BEIS, with others available via the Ministry of Housing, Communities and Local Government (MH CLG) and Ofgem.
In response, the UK100 is calling for the creation of a Net-Zero Development Bank to bring together all financing streams to boost uptake of local energy schemes. The Bank would replace lost funding from the European Union as a result of Brexit, a new study on “balanced energy systems” argues.
The study also analysed progress against the UK’s five regional energy hubs, which were announced by the Government in 2019, including in Nottingham and Warrington. The pipeline of these energy hubs currently has 183 projects valued at £850m. However, 90% of these projects were still at an early stage of development and most of the projects are also relatively small scale, at below £5m.