The UK could net a return of £100 billion to support the British economy if it invested £5 billion in energy efficiency and renewable energy, and delivered it via a dedicated Net Zero Development Bank, according to local leaders. The package could create over 300,000 jobs, they say.
The call comes following research for a report sponsored by the Department for Business, Energy and Industrial Strategy, local energy network UK100 and major energy company Siemens.
The report found that participants in the local energy market are confused and frustrated by inconsistent policy and regulation as government and regulators grapple with evolving technology and the changing energy market.
The private sector can provide much of the development capital needed, but only if there is sufficient market clarity to provide confidence that it can generate an appropriate return for the risks it is asked to take. Regulatory constraints and inconsistent government policy do not yet provide the necessary level of market clarity.
Local authorities lack the development capacity to support local energy investment and deliver the Net Zero transition that their populations are demanding, despite being keen to do so. Their constrained resources are focussed on delivering their statutory obligations in other sectors and the current Covid-19 crisis has exacerbated this position.
Government support, provided in a coherent and consistent manner, could help to provide the necessary market certainty and stability to address the problem of the poorly developed supply chains which are needed to deliver this investment, thereby creating a large number of new jobs across the country, with the associated health and social benefits that our transition to net-zero offers.
Government already recognises the need for support with a range of programmes currently in place, but much more is needed. A Net Zero Development Bank which would bring together all government financing for the transition to Net Zero and kickstart local energy schemes which are at too early a stage to be attractive to private finance. The Bank would provide a single gateway to government support, replace lost funding from the EU within a more stable regulatory regime.
UK 100 believes that government support for local energy Net Zero investment would be delivered most effectively through a new Net Zero Development Bank, working in partnership with UK local authorities, to mobilise private investment by:
● becoming a centre of excellence for developing, procuring and delivering Net Zero project investment;
● scaling up investment opportunities to make them more attractive to institutional investors; and
● engaging with regulators and central government to ensure the necessary support for market development.
Read the summary report