Investment of £5bn could unlock £100bn green recovery, study finds
Initial government spending of £5bn could unlock £100bn of private investment for green projects as the UK looks to build back from the coronavirus crisis, new analysis has found.
Published in a report sponsored by the Department for Business, Energy and Industrial Strategy, the findings highlight how £40bn could be generated for energy efficiency alone – far exceeding the promised target of £9.2bn in the Conservative manifesto
The analysis, carried out by Siemens and UK100, also found that over 300,000 jobs could be created through the package, helping deliver on the government's commitment to level up all parts of the country.
This comes after a separate study by UK100 – a network of over 100 mayors and local leaders – found that one in 10 workers will need access to new skills and training as part of a green recovery.
“If ministers are to meet their manifesto promise on energy efficiency in our homes, which are some of the leakiest in Europe, they need to kickstart a renewable revolution,” said UK100 director Polly Billington.
“This would help hard-pressed consumers save on their fuel bills, support hundreds of thousands of jobs and protect the environment. £5bn now would unlock £100bn to rescue the UK economy and deliver on the prime minister’s ambitions of levelling up and meeting net zero.”
The study involved analysis of five regional energy hubs, set up by the government in 2018, which currently have a pipeline of 183 projects valued at £850m.
It found that the initial £5bn development funding could increase the potential pipeline by more than 100 times, from £0.85bn to £100bn.
This includes £40bn for energy saving and efficiency in homes and businesses, £10bn for renewables such as solar, wind and biomass, £30bn for low-carbon heating such as district heating networks, £10bn for smart energy systems, and £10bn for low-emissions transport.
UK100 also called for the establishment of a 'Net Zero Development Bank', which would bring together all government financing for the transition 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.
“There is an urgent need to scale up local, sustainable, energy if the UK is to have any chance of meeting net zero by 2050,” said Carl Ennis, the UK CEO of Siemens. “This requires a collective national effort with government, business and the public all playing our part.”
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Chris Seekings is a reporter for TRANSFORM