RenewableUK’s executive director of policy Ana Musat has called on the UK Government to compete with the US Inflation Reduction Act by creating an “attractive policy and regulatory environment” for potential investors and developers.
Presented in response to Jeremy Hunt, the chancellor of the exchequer’s vision for long-term prosperity in the UK, Musat believes that in order to create a level playing field for innovation and investment in the UK, there is a need to create a clear plan on green growth.
“To create the economic optimism and momentum which the Chancellor is seeking, we need a clear plan focussing on green growth,” Musat said.
“Mr Hunt must ensure that the UK can compete on a level playing field with the US and the EU, both of which are offering generous stimulus packages to attract private finance from the innovative companies which are spearheading the clean energy transition.”
One of the crucial areas for to spearhead this development would be to provide clarity to UK businesses by declaring “how the UK will bring forward new renewable energy capacity, bolster clean energy supply chains and maximise investment in skills”.
These areas could well be explored in the upcoming Spring Budget. The previous Autumn Statement saw a range of different methods introduced into the energy market. This included the windfall tax which was extended and expanded, to cover electricity generators as well as oil and gas companies.
This saw a 45% levy on profits for large-electricity generators – something that had been criticised by many within the energy industry.
Musat has referenced the importance of the impending Spring Budget and has called for the reformation of capital allowances regime to avoid losing out on the “global race for investment”.
“As a first step the Chancellor should use the Spring Budget to announce a reform to our capital allowances regime to avoid Britain losing out in the global race for investment. The US Inflation Reduction Act offers US$216 billion in tax credits to companies investing in clean energy and transport,” Musat said.
“Even if we can’t match their tax breaks, we need to compensate for this with an attractive policy and regulatory environment: planning reform to enable quick deployment, reducing disruptions to electricity markets through sudden policy changes like the imposition of the Electricity Generator Levy, as well as investment in key infrastructure including ports and the transmission grid.”
One of the crucial areas to explore, according to Musat, is the creation of green jobs. In order to maintain the pipeline of renewable projects currently being developed, there is a need to retrain the UK workforce to cater for this growing market.
This could in turn create a crucial area for growth in the UK. UK workers and manufacturers could be utilised around the globe as a result and thus improve the status of the UK’s green economy. An apprenticeship programme could be influential in this respect, Musat indicated.
“We welcome Mr Hunt’s focus on education, but the Government needs to do more to ensure that we reform the curriculum to build the skills and expertise which will deliver the clean energy transition, including boosting the number of apprenticeships in clean tech,” Musat said.