UK can’t match US green subsidies, Anderson warns

The UK cannot hope to match the US with subsidies to lure green energy investors but can make itself more attractive by offering slicker processes, Keith Anderson has said.

Speaking on a panel at energy consultancy Aurora’s Renewables Summit, the Scottish Power CEO responded to widely held concerns that the tax breaks and subsidies on offer in the US government’s Inflation Reduction Act will lead to the UK missing out on renewables investment.

Anderson said: “The UK cannot possibly try and match fiscally what the US is doing. It’s not even a competition, we’re just being blown out of the water so let’s not worry about trying.”

Instead, he said the UK needs to increase its attractiveness to investors by cutting the time it takes to grant planning and award grid connections.

“Speed and certainty of decisions is worth a huge amount for investors and speed and certainty around  decisions cost nothing,” Anderson said. “Another great thing about speed and certainty is that it’s completely within control of the country.”

And while its federal government is offering attractive incentives now, the US has a track record of turning the investment taps on and off, Anderson added.

He added: “Providing speed and certainty in a long-term framework is an incredibly good way of attracting investment.”

But the government’s current moves to reform processes are too small-scale, such as improved resourcing of planning, he said: “They’ll take one or two years off the process. We need a much, much more radical view.”

Instead Anderson said the time to award consents for offshore wind projects should be cut from the average of seven years now to two.

This would involve taking a more strategic view of key projects, such as the transmission lines already identified as priorities for investment in exercises like Ofgem’s Accelerated Strategic Transmission Investment framework, he said: “Otherwise, with every one of these projects, we will go from town to town or village to village having exactly the same conversation.

“That’s not about riding roughshod over the democratic process but it’s about saying this is critical infrastructure for the future of this country and unless you do that radically, it’s not going to happen.

“We’re not acting as if it’s an emergency in any way, shape, or form. We are setting lovely big targets. We’re putting in place funding and financing mechanisms, which is great but we’re doing nothing about the speed of delivery.”

Alex O’Cinneide, CEO and founder of renewable energy investor Gore Street Capital, told an event on the following day that that the US federal government’s incentives are a bug lure for investors.

Speaking at an online event, organised by the ECIU, he said: “The US is a much more attractive investment destination, certainly than Great Britain and to some extent mainland Europe.

“Investors in energy storage will get 30% of cap ex back from federal government. Of course, they will focus on areas where get a 30% reduction in cap ex.

“That will be felt across the sectors: the US already had a solar and wind boom driven by cost reductions and that has just been accelerated.”