A new study indicates that even though the UK was once regarded as a pioneer in the energy transition, it might lag in the production of ” green ” electricity. Oxford Economics, in a report commissioned by Energy UK, emphasized that among the world’s major economies, the UK’s trajectory foresees the slowest growth in low-carbon electricity generation until 2030.
According to the study, the anticipated growth in the UK low-carbon ( green ) electricity output over the specified period stands at 2.9%, lagging behind countries such as France (3.1%) and Japan (3.2%). In contrast, Italy is expected to achieve 5.2% growth, Germany at 5.8%, and Spain at 6.0%. The top three countries with the highest projected growth are the United States (6.4%), China (7.2%), and India (10.6%).
The study attributes this sluggish growth to “low levels of expected investment,” which significantly impacts the overall outlook. Both public and private sector funding for transitioning away from fossil fuels to renewable technologies have been affected by the challenging global investment climate.
Emma Pinchbeck, CEO of Energy UK, pointed out that international competition, including efforts like the US Inflation Reduction Act (IRA), has also played a role. The IRA, passed recently, allocated a substantial budget of $370 billion for the energy transition, encompassing endeavors such as manufacturing batteries for electric cars and solar panels. Meanwhile, the European Union has also heightened its tax reduction initiatives to promote investment in zero-carbon technologies.
The report emphasizes that because other countries offer more favorable incentive schemes, there’s a risk that investment in green energy infrastructure could shift away from the UK. Oxford Economics emphasizes the importance of creating an attractive environment for investment to prevent such shifts in focus.
WARNINGS
The low-carbon energy sector is experiencing significant growth, contributing substantially to the UK economy. In 2021, this sector generated a turnover of £54.4 billion and provided employment to nearly 250,000 individuals, as estimated by the Office for National Statistics.
However, the study cautions that unless the government ensures an attractive investment environment within the UK, the projected 480,000 jobs supported by a net-zero transition by 2030 may not materialize.
In June, the government’s advisory body on climate change expressed apprehension regarding the slow pace of the transition and emphasized the urgency of meeting climate goals. The Climate Change Committee urged more robust action and the prioritization of rapid emissions reduction.
Energy security has grown into a pressing concern, especially following Russia’s invasion of Ukraine in the preceding year. This, along with political resistance towards decarbonizing the economy, has created uncertainty about the government’s initial commitment to achieving net-zero emissions by 2050.
A mere two years ago, during the UK’s hosting of the COP26 climate conference, Prime Minister Boris Johnson pledged to transform the nation into a wind power leader akin to Saudi Arabia.