The UK could lose out on billions in clean energy investment if it does not take measures to protect companies amid a “hostile environment”.
That’s according to a new report by trade association EnergyUK which highlights that the investment climate for low carbon generation has deteriorated significantly in recent months, threatening to undermine the UK’s climate ambitions and damage the wider economy.
In particular, the report notes that a range of factors such as inflation, interest rates, supply chain difficulties, poorly designed windfall taxes and policy uncertainty are all driving costs up for low carbon projects.
Some developers have reported cost increases of 50% for certain projects, putting them at risk of not being built, EnergyUK has said.
Analysts have estimated that the UK could lose nearly £62 billion in green investment between now and 2030 if policymakers don’t take further action.
In the report, Energy UK recommends a range of measures that the government should urgently consider in order to reverse the current trend, including a rethink of fiscal policy to ensure the country remains an attractive location for international investment.
Energy UK’s Chief Executive Emma Pinchbeck said: “As we look to emerge from an energy crisis that has caused huge difficulties for customers, businesses and the wider economy, both the government and the energy industry have been absolutely clear that the answer lies in rapidly expanding our own sources of clean, cheap power and escaping a dependence on expensive fossil fuels that has cost us dearly in recent times.
“However, the UK is in increasing danger of undermining its own ambitions and failing to deliver on its commitments. In many ways, the UK has led the way in the transition to clean energy – witness our world-leading offshore wind industry – but we risk squandering this position and driving the investment that we need elsewhere.”
The Department for Energy Security and Net Zero has been contacted for comment.