More than £900 billion in new spending may be required to get Britain’s power supply networks to Net Zero by mid-century, a leading renewables finance institution says today.

New research commissioned by NatWest from Boston Consulting quantifies the need, as well as policy precursors including consistent spending signals from ministers, closer working between the Treasury and private investors, and steady commitments from energy companies to put new technologies on the market.

Flagging up the scale of spending needed, the duo highlight more investment in renewables and  network switches and cables, and new technologies such as energy storage systems, carbon capture and storage, and hydrogen.  The study draws on recent analysis by bodies such as analysis as the Climate Change Committee, the International Energy Agency and the Intergovernmental Panel on Climate Change.

The report suggests businesses should deliver change by working together to test low-carbon solutions, building greater security and resilience into the energy system, and unlocking revenue from UK participants.

“Investment in green infrastructure will help to pay for itself through generating jobs and economic growth, so it’s vital the entire value chain works together to make this happen,” said Andy Gray, the bank’s managing director of commercial mid-market operations.

“The UK needs clean, stable and affordable energy supplies, but huge capital expenditure is needed to make this a reality.”

“To decarbonise the UK’s energy supply, the industry needs to scale its infrastructure and technology, all of which will require finance. It’s clear that there needs to be greater collaboration between policy, regulation and finance to enable this to happen,

“This report estimates that the UK’s energy supply needs over £900 billion to reach net zero by 2050. Mobilising the capital needed will be complex, and the findings serve as a clear call for all actors across the system to work together to find solutions.

“Society has gone through energy transitions in the past — but nothing like this one”, Boston Consulting partner Eriola Beetz added.   “We are just at the beginning of the journey.

“As the clock keeps ticking, one of the key challenges we face is plugging a substantial investment gap to support the quick roll out of solutions and innovation we desperately need. Financial institutions are in an excellent position to leverage the learnings and experience from backing technologies such as wind and solar over the last decade.”

NatWest Group has targeted its provision of £100 billion of Climate and Sustainable Funding and Financing by the end of 2025. In 2020, was ranked 1st in UK project finance renewables lending.

Read the report here


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