A new report from Energy UK has warned that the UK could fall behind on the investment needed to fund a rapid expansion of clean, domestic power.
Renewable UK and Energy UK have both separately called on the government to make the country a more attractive place for investors looking to build wind and solar farms.
“The UK is in increasing danger of undermining its own ambitions and failing to deliver on its commitments,” said Emma Pinchbeck, chief executive at Energy UK.
“In many ways, the UK has led the way in the transition to clean energy – witness our world leading offshore wind industry – but we risk squandering this position and driving the investment that we need elsewhere.”
The new report, in particular, warns about the increased costs of low-carbon projects.
This is due to a range of economic factors such as inflation, interest rates, supply chain difficulties and “poorly designed” windfall taxes. As a result, some developers have reported cost increases of 50 per cent for certain projects, putting them at risk of not being built.
The report concluded that without taking action to address these factors, the UK economy could lose out on £62bn of investment between now and 2030.
Ahead of the chancellor’s budget next month, Renewable UK said that the government must put in place “its share” of fiscal incentives for both developers and companies in the supply chain in order to compete globally.
“The renewable energy sector is facing a perfect storm this year, with inflation squeezing out already tight profit margins, and fierce international competition for investment, skills and supply chains,” said Ana Musa, policy boss at Renewable UK.
“The US and the EU are in a race to offer incentives to clean energy investors and the UK cannot take its leadership position for granted.”
A government spokesperson commented on Energy UK’s report, saying: “The government has consistently attracted investment in renewables. Since 2010, the UK has seen more than a 500 per cent increase in the amount of renewable electricity capacity connected to the grid while through ‘Contracts for Difference’ we have awarded contracts totalling almost 27GW of new low-carbon capacity to date.
“We are consulting on reforms as part of the ‘Review of Electricity Market Arrangements’, including changes to the wholesale electricity market that would stop volatile gas prices setting the price of electricity produced by much cheaper renewables – cutting the cost of electricity for consumers in the long term and providing certainty for investors.”
The Confederation of British Industry recently found that the UK has lost out on an estimated £4.3bn of green growth market value in Europe alone and in April will fall from fifth to 30th place in the OECD table on tax competitiveness.
Source: E&T
