A report jointly published by NatWest and Boston Consulting Group (BCG) has indicated that achieving net zero in the UK's energy supply by 2050 could necessitate a colossal capital expenditure exceeding £900 billion. The report underscores that such an investment landscape presents a substantial opportunity for both public and private capital to play a pivotal role in facilitating a successful transition.
The envisioned shift towards a net zero energy supply entails substantial investments in various areas, including renewable generation, network infrastructure, and cutting-edge technologies such as energy storage systems, carbon capture and storage, and hydrogen.
NatWest and BCG propose that collaboration among businesses could expedite and implement change by jointly testing low-carbon solutions, fortifying security and resilience within the energy system, and unlocking revenue streams in the United Kingdom.
However, the success of this transition hinges on coordinated efforts from banks and investors, regulators, policymakers, energy companies, and supply chains to address the challenges associated with mobilizing such a significant investment.
Key prerequisites for enabling the transition, as outlined in the report, include explicit and decisive government policies, collaboration between banks and investors to tackle investment scaling challenges, and unwavering commitments from energy companies to bring new technologies to market.
Andy Gray, Managing Director of Commercial Mid-Market at NatWest Group, emphasized the complexity of mobilizing the required capital and called for collaborative efforts across the entire system to find effective solutions. Gray highlighted the need for enhanced cooperation between policy, regulation, and finance, emphasizing that investment in green infrastructure can yield economic benefits through job creation and economic growth.
Eriola Beetz, Managing Director and Partner at Boston Consulting Group, acknowledged the ongoing changes in energy sources and the expansion of electricity networks but emphasized the substantial investment gap that needs addressing for the rapid deployment of necessary solutions and innovations. Beetz highlighted the strategic position of financial institutions to leverage their experience from supporting technologies like wind and solar over the last decade.
