The UK’s current energy stimulus package misses the opportunity to create new green jobs and accelerate the transition to a flexible, renewable powered economy, according to a new report.
Global technology company Wärtsilä found that the current commitments designed to support the country as it rebuilds following the COVID-19 pandemic are weighted towards legacy fossil fuel energy.
In its new report Aligning Stimulus with Energy Transformation it found that there was £3.8 billion in stimulus commitments allocated to fossil fuel energy, compared to only £121 million for clean power across the UK and the US. This means that the levels of support are not inline with the UK’s target of a 57% greenhouse gas reduction by 2030 on 1990 levels or net zero by 2050.
Ville Rimali, Growth and Development director at Wärtsilä Energy said that the UK and across the G20, the “stimulus ‘scales’” were too heavily weighted towards legacy power systems, despite the decarbonisation agenda.
“Refocusing stimulus towards renewable and flexible energy would accelerate this shift, create jobs and cut emissions.”
However, if redirected towards the energy transition this stimulus, leveraged to unlock private sector investment, could allow the UK to reach 60% renewable power by 2025. Wärtsilä suggests that a cost-optimal 60% renewable system would conside of 60GW of existing and new renewable energy, supported by 7GW energy storage and 14GW new flexible gas based technologies.
By redirecting the stimulus to focus on renewables, over 120,000 jobs could be created, 175% more than if the stimulus focuses on rebuilding legacy energy systems.
“The UK energy system is at a fork in the road,” continued Rimali. “The current road could lock-in unnecessary fossil fuels, create 60% fewer jobs and miss the UK’s net-zero target. The alternative road leverages economic stimulus to unlock massive private sector investment, clearly putting the UK on a net-zero trajectory – potentially achieving a 60% share of renewables by 2025 and cutting emissions intensity by 58%.
“The UK has enormous potential to accelerate to net-zero and present a blueprint for other countries to follow, stimulating investment, jobs, technology intellectual power and economic growth.”
In the UK, the call to ensure that the COVID-19 recovery package has net zero at its heart have been widespread. In an effort to boost renewables and create jobs in the sector, Prime Minister Boris Johnson announced an increase in the country’s offshore wind ambition to 40GW, together with £160 million in funding.