Trade association Energy UK has called on the UK Government to introduce renewable investment measures to compete with the US’ Inflation Reduction Act (IRA).
According to the firm’s Funding the Future report, the UK must scale its investment in the clean energy sector and incentivise its development to compete with other countries around the globe. Failing to do so could see the UK lose its “world-leading” position in the clean energy economy.
The report identified the EU and US as major competitors to the UK. Both have released “landmark” legislations such as the US’ IRA package and the EU’s Green Deal Industrial Plan, RePower EU and Recovery Resilience Funds, all of which support the creation of a healthy clean energy market and are already attracting significant interest from investors around the globe.
The UK, however, has been lagging behind and inconsistencies with governmental policies has plunged the nation into an uncertain future. Energy UK stated that “although the UK is currently a dominant player in offshore wind and is the only economy out of the world’s eight largest to produce more electric and hybrid vehicles than traditional cars, it is also forecast to have the slowest growth in low-carbon electricity generation of these economies between now and the end of the decade”.
Investment in the sector is critical for the UK’s success. According to the Office for Budget Responsibility (OBR) the estimated cumulative investment cost of the UK achieving its net zero by 2050 goal is £1.4 trillion in 2019 prices. This is more than ten times over the government’s estimated capital investment spending in 2023-24.
This means that private sector investment is undoubtedly necessary in achieving net zero goals as the OBR estimates that over 70% of the UK renewable energy investment must be drawn from the private sector. But to attract this investment, the UK must do more.
“The IRA has been a game changer for the investment landscape and as this report shows, other key markets are already responding. The UK’s world-leading role in the development of clean energy has given us strengths in terms of expertise and experience – but we have no divine right to this position,” said Energy UK’s chief executive Emma Pinchbeck.
“With growing global competition for private investment that can choose its location, a failure to respond will quickly see us fall behind and jeopardise ambitious targets for increasing our own sources of clean energy and decarbonising our whole economy. While we can’t necessarily replicate what the US has done, resting on our laurels and missing out on the economic boost such investment offers our country would be a very serious mistake.”
Current± publisher Solar Media is hosting the third edition of its Wind Power Finance & Investment Summit Europe in London this 19-20 September. The conference will focus on investment strategies, alleviating bottlenecks, and which countries and technologies are the most exciting ahead as the industry sets to expand to help reach 2030 targets.
Packed with industry leaders representing financiers, investors, developers, government departments and more this is the leading conference for decision makers in the European wind industry. More information, including how to attend, can be read here.