Pinchbeck warns against complacency on renewables

The UK is “resting on its laurels” from past successes in rolling out offshore wind and has under-estimated the speed of progress elsewhere, Emma Pinchbeck has said.

The Energy UK chief executive also warned that increased competition for investment makes it important for Britain to maintain its cross-party consensus on tackling climate change, during an online ECIU briefing to mark the first anniversary of the US Inflation Reduction Act (IRA),

She said the simplicity and scale of low carbon technology incentives through the IRA had been a key factor in shifting investors to focus on the US.

In addition, UK renewables projects face increased competition for supply chain resources and rising debt costs, Pinchbeck said: “In the UK, we’re slightly resting on our laurels from 10 years ago and there’s an underestimation of the speed of change.”

The combination of these factors necessitates an urgent response from the government, she said.

Noting the importance of the cross party consensus on net zero, Pinchbeck said: “Any risk to [net zero] means that investors might look to other markets.

“The response to both the Ukraine war and IRA is to crack on with delivering net zero and we would like to hear that from our politicians.”

She added: “The IRA has been a game changer for the investment landscape. The UK’s world-leading role in the development of clean energy has given us strengths in terms of expertise and experience – but we have no divine right to this position.

“With growing global competition for private investment that can choose its location, a failure to respond will see us quickly fall behind and jeopardise ambitious targets for increasing our own sources of clean energy and decarbonising our whole economy. While we can’t necessarily replicate what the US has done, resting on our laurels and successes so far would be a very serious mistake.”

She also told the briefing that when the UK was developing its CfD (Contracts for Difference) renewable energy subsidy regime, offshore wind was a “niche” technology.

However the sector’s development means that the US has been able to scale up its offshore wind supply chain, which had taken the UK a decade, Pinchbeck said.

But she said that the UK remains an attractive destination for renewable energy investors as the world’s second biggest offshore wind market.

Johanna Lehne, programme lead at consultancy E3G, added: “While the UK watches from the sidelines, the US and EU are ramping up industrial strategy investments in a bid to capture green growth markets and compete with China. The UK government has argued that it lacks the spending power to respond in kind but on this front it can learn from the EU’s response. Beyond scaling up green subsidies, the EU has deployed a set of regulatory levers to back nascent industries, scale up technologies and send strong market signals, all of which are available to the UK.

“The UK has a broad range of tools and valuable assets in the form of its regulatory framework and its expertise on net-zero technologies, through which it could still lead and drive the green transition in key supply chains. But it must act quickly, or risk being left behind, just as the race to net zero gets underway.”