UK faces strong competition in clean energy investment and deployment

A recent report suggests the UK will experience rising competition threatening its historical leading position in the global renewables and nuclear industry without taking necessary action to enhance industrial plans in the US, the EU and Asia. The report from trade organisation EnergyUK represents companies with a collective responsibility for approximately 80% of national power generation.

The analysis delivered by Oxford Economics compares the rate of the energy transition in the UK. The report explores how this shift will likely evolve over the next few years with the existing funding government plans. The findings for short-term investment in low-carbon electricity generation in the UK are relatively low compared to 10.6% in India, 7.2% in China and 6.4% in the US. EnergyUK’s forecast for average annual growth in low-carbon electricity output in the UK stands at 2.9%. This figure could improve when the UK responds to the significant clean energy subsidy plans introduced in the US and the EU.?

EnergyUK and other leading trade organisations and think tanks are urging the UK Government to plan a strategy that matches the scale of increasing global competition with funding levels, strategic measures and the range of technologies included. EnergyUK recognises that the UK cannot meet or exceed the US investment in the Inflation Reduction Act (IRA). However, the organisation notes that the UK contains other strengths, and even with a lower package, the country could benefit from a clear and modern approach to expanding clean energy industries.?

Emma Pinchbeck, the CEO of EnergyUK, explains that the leading role in developing clean energy has given the UK the strength regarding expertise and experience, but cannot assume they will maintain this position. With increasing competition for private investment that is flexible with location, failing to action quickly could see the UK fall behind and impact its ambitious targets for increasing clean energy sources and decarbonising the national economy.

Aside from the US IRA, the report includes the EU Green Deal Industrial Plan, the $564bn investment in clean technologies in China, the $18 billion Green Innovation Fund in Japan and $4.3 billion clean energy investment plans in India for next year. Ministers hope to end fossil-fuel-powered electricity generation by 2035 and have received consistent pressure from trade groups, analysts and policymakers to deliver a clear pathway to make this achievable, which is critical in the transition to a net zero future.

Maintaining a leading position in the EV market

As well as observing low-carbon electricity, the report looks at other vital clean tech sectors. There is one where the UK remains in a leading position and hopes to maintain this – the electrification of vehicles. EnergyUK has discovered that the UK is the only one within the eight largest global economies to develop more pure-electric and hybrid models than conventional petrol and diesel vehicles. Eight out of ten manufactured vehicles in the UK are exported, which sends a powerful signal to other countries. The UK has a smaller vehicle manufacturing capacity than the other eight nations, aside from India. The largest manufacturer is China, followed by Germany and the US.

There is a warning the UK cannot necessarily guarantee its leading position in electric vehicle manufacturing. The US is becoming an increasingly strong market in the short and medium term. Automotive and battery businesses in the US have confirmed as much as 20 times more funding since the IRA launched last year. The EnergyUK report explains that the automotive industry is an area where the UK has multiple strengths, but these must ensure the country succeeds in the transition.?

While the UK has made good progress on transitioning to a net zero economy, it potentially risks falling behind other nations in the future without taking decisive action and implementing the necessary supportive measures.

https://blog.greenjobs.co.uk/2023/08/29/uk-faces-strong-competition-in-clean-energy-investment-and-deployment/

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