UK green growth ambitions are ‘muted’

The level of UK ambition on low carbon technology is “muted” as other major economies come forward with new subsidy and incentives regimes, Energy UK has warned.

A new report points to the UK’s significant strengths as it faces the challenges of decarbonisation, such as world-leading universities and financial services as well as early success in rolling out offshore wind.

But even though it has had a “good start” on transitioning to a net zero economy, the UK “risks falling behind other countries in years to come” as they come forward with generous incentives and subsidies, like those available under the US Inflation Reduction Act. .

Of the world’s largest eight economies, the UK is forecast to have the slowest growth in low carbon electricity generation between now and 2030 at 2.9%, estimates the report, which was carried out for Energy UK by consultancy Oxford Economics.

“Low expected levels of investment in the UK are a significant factor behind this downbeat forecast,” says the report, pointing to the country’s ranking 30th out of 38 OECD nations on the average proportion of capital investments businesses are able to recover.

Increasing incentives for clean technology investment in other jurisdictions means future investment in UK clean technology looks “increasingly under threat”, while new investment incentive regimes to meet the scale of global competition have yet to be seen, it says: “In contrast to ambitious incentive schemes being provided around the world, the level of UK ambition looks muted.

“We have a great position to start from but must consider the global context in how we compare to other countries, when boardrooms around the world are deciding where to invest.”

The report, entitled Funding the Future: The UK’s energy transition in a global context, is the second in Energy UK’s ‘Clean Growth Gap’ series.