Energy UK has released a comprehensive report addressing the critical need for attracting investment to sustain the United Kingdom's pivotal role in clean energy and to ensure a secure, domestically sourced energy supply in the future. Titled “Accelerating Action,” this report is the culmination of Energy UK's Clean Growth Gap series, examining various strategies the UK can implement to avoid losing ground to other nations in the pursuit of economic opportunities within the clean energy sector.
The timing of this report is significant, following recent events such as the Prime Minister's speech on achieving net zero emissions and the outcomes of the latest Contracts for Difference (CfD) auction. With an estimated 70% of the funding required for the net zero transformation expected to originate from the private sector, the report highlights seven critical actions that the UK must undertake to attract this vital investment.
Among the recommendations, the report calls for a realignment of investment incentives in the tax system to better align with the unique characteristics and requirements of low-carbon projects. It also advocates for revisions to the existing Electricity Generation Levy, addressing the competitive disadvantage faced by clean energy projects compared to conventional oil and gas ventures, which can serve as a barrier to new clean energy initiatives.
Furthermore, the report underscores the importance of ensuring that the CfD scheme reflects economic realities to prevent a recurrence of issues encountered in the previous auction round. The report highlights the paramount importance of providing a stable and predictable environment for investors and emphasizes the negative impact that proposed reforms, indecision, and ill-considered rhetoric can have on this crucial aspect.
Another key recommendation is the acceleration of the grid connections process to facilitate the swift deployment of new clean energy projects. Emma Pinchbeck, Chief Executive of Energy UK, emphasized the significance of these actions, stating, “Much of the focus in the past week has been on how the cost of net zero and the energy transition might affect individuals and households, but in reality, most of the investment needed will come from the private sector with the benefits flowing straight to people across the UK.”
Pinchbeck also expressed concern that recent messaging may have left investors questioning the UK's commitment and belief in delivering on its clean energy goals. The report serves as a call to action, urging the UK to seize the opportunity and prioritize efforts to drive economic growth, create high-quality jobs, and foster greater prosperity for years and decades to come.
Previous reports in the Clean Growth Gap series, produced in collaboration with Oxford Economics, have underscored the increased risk of the UK falling behind in its energy transition amid growing global competition for clean investment. These reports emphasize the importance of leveraging the UK's existing strengths and natural advantages to maintain its leadership in the clean energy sector.
