Subsidies and low interest rates accelerated the recent investment boom in renewables, say experts, while government says it has plans to revive nuclear industry
The UK’s investment in clean energy and the low-carbon economy fell by 10% last year, in contrast to the EU and US.
Over 2021-22, the UK’s investment in the energy transition fell from USD$31bn to USD$28bn, while similar investment in the US rose by 24% to USD$141bn. Across the EU, investment rose by USD$26bn to USD$180bn, following Russia’s invasion of Ukraine.
The research, which covers both public and private sector investment, was commissioned by the Liberal Democrats and could be interpreted to show the UK falling behind.
Certainly, Wera Hobhouse MP, the Liberal Democrat energy and climate spokesperson, accused the government of a “dereliction of duty”.
She said: “The government’s claims of being world leaders in the energy transition are in tatters. This data lays bare their neglect of our vital net-zero goals, and failure to insulate us from the next energy crisis.
“While other nations are facilitating major investment into the key industries of the future, our government is content to sit back and watch them race ahead. The result will be a lack of energy security, higher energy bills and the continuing failure to hit our climate targets.”
“The stark reality is that without rapid government intervention, the UK is set to fall short of our clean energy targets.”
Adam Berman, Deputy Director of Energy UK, the trade association for the energy industry, highlighted a shortfall in offshore wind investment and called on the government to take ‘urgent action’ to ensure the UK continues to attract international investment
He said: “Meeting the government’s clean energy ambitions requires a relentless focus on delivery. The stark reality is that without rapid government intervention, the UK is set to fall short of our clean energy targets.”
However, some were not surprised by the drop in investment. The Renewable Energy Foundation’s Dr John Constable highlighted that solar and wind energy is difficult to extract.
He said: “Renewable energy sources such as wind and solar are not fundamentally economic or intrinsically attractive to investors. The recent hothouse investment boom in renewables was fuelled by generous subsidies and boosted by low interest rates.”
Even so, Prime Minister Rishi Sunak insisted that the government was ‘driving forward’ plans to boost renewables, revive nuclear and build industries like carbon capture to reach net zero.
This came as Grant Shapps, Energy Security Secretary outlined steps to strengthen Britain's long-term energy security. This included the launch of Great British Nuclear (GBN), whose first task will be to launch a new competition to select the best small modular reactor technologies for development by Autumn.
Simon Bowen, GBN Interim Chair said: “This marks the next step in the UK’s nuclear renaissance, offering real value for money and providing a more stable energy future for our country.”
Chris Hewett, Chief Executive of trade association, Solar Energy UK also welcomed the “clear indication” from the government that it wants the UK to take “full advantage of solar energy’s vast economic potential”.
He said: “We look forward to working closely with ministers to lay the path towards a five-fold increase in solar capacity in the UK by 2035.”
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