UK will fail to meet carbon targets due to falling renewable investment, MPs warn
Falling investment in renewable energy projects over the last two years threatens Britain’s ability to meet its legally binding carbon targets according to a new report from MPs.
The Commons Environmental Audit Committee blamed falling investment on changes in government policy.
It said that current trends suggest that the UK will “struggle” to meet its fourth (2023-2027) and fifth (2028-2032) carbon budgets between 2023 and 2032.
“Recent figures show that clean energy investment has fallen dramatically since 2015,” the report states.
“In cash terms it fell by 10 per cent in 2016 and by a further 56 per cent in 2017. Annual clean energy investment in the UK is now the lowest it has been since 2008 and the rate at which we are installing new renewable capacity is slowing.”
It said ministers urgently needed to “plug the policy gap” with a delivery plan to ensure the targets for reducing carbon emissions are met.
The falling cost of generating electricity from wind and solar power means that we can now secure clean energy capacity at lower prices, which to some extent may have cushioned the impact of cash reductions.
However, it also looks likely that a series of sudden changes to low-carbon energy policy in 2015 undermined investor confidence and led to a reduction in the number of projects in development.
Making a swift transition to a sustainable low-carbon economy will require billions of pounds of infrastructure investment in clean energy, transport, homes and industry, the committee said.
“Given that these budgets are only a few years away, ministers must urgently plug this policy gap and publish a delivery plan to secure the investment needed to meet the fourth and fifth carbon budgets – without relying on carrying over a surplus from previous budgets,” the report said.
The committee said a series of sudden changes to the low-carbon energy policy in 2015 – including removing the Climate Change Levy exemption for renewables and cancelling a zero-carbon homes policy – appeared to have undermined investor confidence in the sector.
Disruption from the privatisation of the Green Investment Bank and a reduction in lending from the European Investment Bank following the Brexit referendum may also have played a part, it added.
It urged ministers to look at how “green bonds” could be used to kickstart new investment in the sector, saying the UK was lagging behind other countries.
Committee chairwoman Mary Creagh said ministers needed to set out how exactly they intended the targets to be met.
“Billions of pounds of investment is needed in clean energy, transport, heating and industry to meet our carbon targets,” she said.
“The government’s clean growth strategy was long on aspiration, but short on detail. It should provide greater clarity on how it intends to deliver the clean growth strategy by the 2018 Budget.”
A BEIS spokesman said: “The UK is a world-leader in cutting emissions, with 50 per cent of our electricity coming from low-carbon sources and recently going 72 hours without burning coal.
“We’re committed to meeting our climate change targets and will have invested £2.5bn on low-carbon innovations by 2021.
“We will consider this report carefully and respond in full in due course.”