Almost all of the UK's energy firms say more favourable policy could lead to up to £115billion of investment in the sector.

96% of the 100 “business decision makers” surveyed across the UK energy sector said they would "increase investment into either existing or new sustainable/green projects in the UK", while nearly two-thirds (63%) said they have moved or are planning to move investment out of the UK to a more "sustainable-friendly" market.

The report from the UK Sustainable Investment and Finance Association (UKSIF) adds that nearly nine in 10 (87%) of UK energy businesses agreed that policy changes are "essential" to make the UK an attractive place to invest in green energy.

And more than three-quarters (81%) agreed with the statement that the UK is falling behind other governments in the race to become the most investible market for low-carbon energy.

Emma Pinchbeck, CEO of Energy UK, adds that investor confidence must be restored to justify long-term funding in the sector.

She said: "Reaching Net Zero will require an estimated five-fold increase in current investment levels by 2030 – and around two-thirds of this will come from the private sector. This will only happen if investors have the confidence and the right environment to justify committing funding to the UK over the long term.

"The UK can rightly point to becoming the first country in the G7 to halve its emissions, mainly driven by the way we generate our electricity. We cannot rest on past achievements however and, as it stands, the UK is forecast to have the slowest growth in low-carbon electricity generation of the world’s eight largest economies between now and the end of the decade.

"We need to match the levels of ambitions set by our targets and unlocking private capital is the way to do that, while also bringing benefits to the whole economy. Analysis has shown that the most ambitious approach to Net Zero could boost the UK’s GDP by 6.4% - or £240 billion - by 2050, roughly equivalent to the current size of our manufacturing sector."

A trio of recommendations

The report makes three recommendations to ensure increased investment and a faster delivery of the UK's net zero goals.

  • Overhaul planning rules to remove obstacles and reduce the time taken to bring large energy projects online
  • Ensure there is adequate grid capacity to reduce connection times
  • Reform energy pricing mechanisms to incentivise long-term investment in UK low carbon power capacity, including the Contracts for Difference auction process to better support UK supply chain investment

"The UK’s planning system and consenting rules urgently need to be streamlined and shortened, with timeframes for decision-making set out clearly and proper resourcing provided for planning authorities," accorfing the Nathan Bennet, the director of strategic communication at RenewableUK.

He adds: "It currently takes longer to get consent for an offshore wind farm than it does to build it. Similarly, our electricity grid badly needs an upgrade or we’ll continue to see renewable energy projects which could be generating low cost power for billpayers held back, in many instances into the next decade."

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