Report: UK lacks investment plan for clean energy transition
The UK Energy Research Centre (UKERC) has warned that the UK's efforts to finance its climate and energy goals are slowing, underscoring the need to intensify private investments in the sector.
Issued in a report yesterday, an analysis by the UKERC examined the mechanisms through which the government secures a high-quality and viable investment plan to deliver its energy ambitions.
However, key takeaways from the analysis revealed that while there exists a network of teams equipped with in-house investment expertise and project-level tracking for renewable energy and heat initiatives, significant gaps persist in infrastructure projects.
This disparity, coupled with a pace of implementation that is deemed inadequate, raises alarms about the potential emergence of an investment gap, according to the government-funded research organisation.
“The last decade has seen substantial renewable energy cost reductions as a result of well-designed policy and market support, building track record and scale,” the report states. “Ensuring a just transition and the need to consider climate mitigation and adaptation together are increasingly understood as integral to truly sustainable longer-term investments.
“To deliver on 1.5C will need substantial build-out of renewables at pace, scaling green heat (still nascent) and actually addressing energy efficiency, building retrofit and demand side flexibility and at the different scales that make up the energy transition.”
The report further highlights a lack of clarity and coordination among government departments while approaching investment strategies, causing hindrance to a unified approach to attracting private investment in the energy sector.
As per an Energy UK report published last month, among the top eight global economies, the UK is projected to experience the slowest expansion in low-carbon electricity generation until 2030, due to low-levels of expected investment.
An evaluation by the Office for Budget Responsibility (OBR) reveals that achieving the UK’s net-zero goal by 2050 amounts to £1.4trn in 2019 prices. This surpasses the Government’s projected capital investment expenditure for 2023-24 by more than tenfold.
The OBR estimates that the private sector will need to contribute more than 70% of clean energy investments.
To address these challenges, UKERC has provided suggestions to guide the nation towards reinvigorating the energy sector through increased investment.
The UKERC recommends forming an expert panel to review factors and tools, boosting investment confidence, mitigating risks, and enhancing transparency.
It further highlights the need for risk-based tracking that anticipates investment-related barriers in advance, in a bid to enhance the Government’s ability to navigate challenges and ensure successful project implementation.
The UKERC also aims to engage key stakeholders, decision-makers, and involved parties to seek feedback on the report. Following this phase, a workshop is slated to be developed, aimed at deliberating over the analysis and charting out actionable steps to address the investment gaps.
SCI manifesto to boost investment
The report follows closely after SCI unveiled its blueprint for an industrial science and innovation strategy, advocating policy interventions aimed at expediting the UK’s journey to net-zero through increased investments.
The strategy suggestions involve requiring pension schemes to invest in research and development (R&D) focused sectors and offering tax incentives to large-scale production facilities to fuel innovation, employment, technology required to meet net-zero targets.
Last month, the SCI, in partnership with LEK Consulting, released a report warning of potential losses of £230bn in economic growth and 240,000 jobs within life sciences and clean technology in the UK by 2030 without a focused industrial strategy.
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