The UK’s prime minister has outlined plans for a “green industrial revolution” in what is expected to mark the beginning of the country’s path to net-zero emissions.
Boris Johnson’s 10-point plan, covering clean energy, transport, nature and innovative technologies, is expected to allow the country to “forge ahead with eradicating its contribution to climate change by 2050”.
The plan “will mobilise £12bn (€13.2bn) of government investment to create and support up to 250,000 highly-skilled green jobs in the UK, and spur over three times as much private sector investment by 2030”.
The investments are intended to quadruple offshore wind production by 2030, help develop the first town heated entirely by hydrogen and to push ahead with nuclear as a clean energy source.
Investments will be made to fund car manufacturers to enable them to speed up the transition to electric vehicles and also make homes and public buildings greener.
The plan coincides with a report by PwC commissioned by the Global Infrastructure Investment Association, which has revealed how £40bn investment per year is required in new low carbon and digital infrastructure if the government’s 2050 target is to be met.
In response to the prime minister’s announcement, Richard Lum, co-CIO at Victory Hill Capital said any move to support the energy transition and secure a more sustainable future was to be welcomed. “However, it is clear that in many ways the ‘10 point plan’ does not go far enough,” Lum said.
Lum added that the pledge to quadruple offshore wind power in a decade was an admirable goal, “but it is important the UK ensures the infrastructure to store and carry this power to our homes is put in place”.
He said: “The UK’s electricity network requires investment, as it was not originally designed to accommodate these modern, renewable sources of energy, nor store the extra capacity generated on particularly sunny or windy days.
“We would suggest the government address this issue before grandiose plans are put in place to increase the amount of renewable energy being pumped into an ageing system.
“Likewise, the announced funding for nuclear power raises its own problems, particularly how we plan to handle and store masses of waste that will remain highly radioactive for thousands of years.”
Tony Dalwood, CEO of Gresham House, said the move to ban the sale of petrol and diesel cars by 2030 was an ambitious step by the government to reduce carbon emissions and will have a significant impact on the automotive sectors as well as consumers to make more sustainable choices in future.
“However, this will also increase pressure on businesses and the government to continue building our UK infrastructure to ensure that enough charging stations will be available to support this shift.”
He said: “We have seen a growing appetite from long-term investors in the last decade to back sustainable and ESG-driven projects and to provide a greener future for all, providing both financial returns but also meaningful societal and environmental benefits.
“We are also seeing funding from the private markets into green infrastructure and ESG funds increasing and undoubtedly this will continue over the next year.
“Alternative fund managers are well-placed to manage this growth in asset allocation through their existing platforms in the long-term future as demand for sustainable investment continues.”
Ian Simm, CEO of Impax Asset Management, said there was no denying the impressive ambition of the plan and that the UK government should be given credit for the breadth of its scope.
It suggests that climate action will be central to the UK’s drive to build back better after COVID-19 Simm said, adding that, if followed up with detailed sectoral strategies and policies, it will enable the UK to set an example as it hosts the 26th UN Climate Change Conference of the Parties in Glasgow next year.
“The challenge now will be turning the lofty ambition into action – and fast. The UK’s leadership in setting a net-zero target still needs to be underpinned by a set of clear and credible sectoral roadmaps setting out the changes which need to be made across the economy in order to deliver the prime minister’s bold vision,” Simm said.
Simm said the 10-point plan may whet appetites, but its stated aim of mobilising more than £30bn of private capital will only be achieved if it is followed up quickly by the publication of detailed analysis of investment requirements and strategies for attracting private investment, starting with the much-delayed energy white paper.
“Top of investors’ wish list would be market reform needed to facilitate development of a smart power grid; a roll-out plan for financing EV charging infrastructure; while accelerated plans for hydrogen gas blending now can help underpin an attractive investment pipeline for later in the decade.”
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