Government ‘coasting on climate change’ after fall in clean energy investment

The Government published its response to the EAC’s Green Finance: Mobilising Investment in Clean Energy and Sustainable Development report on Monday (30 July), which showed a “dramatic and worrying collapse” in investment since 2015, according to the EAC.

The EAC report, published in May, noted that while figures from the International Energy Agency showed that global investment fell by 7% year-on-year in 2017, the decrease was far steeper in the UK – particularly for funding decarbonisation projects for transport, domestic heating and industry.

In its response to the report, the Government insisted that the nation “is a world leader on clean growth” with a “globally renowned financial services sector” – claims which have been criticised by EAC chair Mary Creagh.

“Green finance is a key priority for the Government – to support delivery of our ambitious Clean Growth Strategy, to drive UK economic benefit as part of our Industrial Strategy, and to enable the global transition to a low carbon economy,” the Government response states.

“Managing climate-related risk whilst capturing new investment opportunities will help us meet our objectives of ensuring that our economy is resilient and best placed to seize global opportunities.”

The response, signed by BEIS minister Claire Perry and Economic Secretary to the Treasury John Glenn, also cites the fact that the UK has reduced emissions by 41% since 1990, whilst growing its economy by more than two thirds over the same period.

However, Creagh argued that the response showed how the Government is “coasting on climate change”, “relying on past successes to scrape by on its carbon budgets” despite not being on track to meet future carbon budgets.

“We have made progress in clean energy over the last decade, but there has been an alarming collapse in investment in the last year,” Creagh said.

“Meanwhile, little is being done to channel clean investment into areas like transport, industry and heating where emissions need to be cut in the coming years.”

Subsidy-free shift 

The large drop in renewable energy investment in 2017 has been widely attributed to a plethora of cuts to subsidies and feed-in-tariffs (FITs), combined with the closure of Renewables Obligation (RO) applications last year.

Despite this relatively turbulent backdrop, research has suggested that Britain is on course for a subsidy-free renewables “revolution” that could add 18GW of new capacity by 2030 and attract £20bn of investment.

Commenting on the Government’s response to the EAC report, the Renewable Energy Association’s head of policy and external affairs, James Court, said Ministers had handled the shift to subsidy-free renewables in a way which has “resulted in precipitous changes that have undermined achievements in solar, onshore wind, renewable fuels, and beyond”.

“The industry is now keen to engage with Government on how the cheapest forms of new power generation – wind and solar – could be deployed in this new policy landscape,” Court added.

“Supporting small-scale renewable power after the looming closure of the feed-in tariff, and discussing the decarbonisation of heat once the programme to support new renewable heat deployment closes in 2021, are also core industry priorities.”

Sarah George