Over half of Brits back faster switch to clean energy
Green groups call on government to deliver more ambitious clean energy transition plan, as Scottish Power boss warns UK risks squandering renewables opportunity
Over half of UK adults believe the UK should aim to end its use of oil and gas “as quickly as possible” and urgently ramp up efforts to improve energy efficiency and bring online more renewables capacity.
That is the headline conclusion from a new YouGov survey of 2,000 adults commissioned by the Warm This Winter coalition of fuel poverty and environmental charities, which found 54 per cent of Brits want to see an acceleration in the UK’s clean energy transition. In contrast, only 29 per cent said the government should seek a more gradual transition away from oil and gas, while just 10 per cent agreed the UK should aim to continue to meet its energy demand primarily with oil and gas for as long as is necessary.
The news came as the campaign group, which includes over 40 of the UK’s leading charities, delivered a 400,000-strong petition to Number 10 Downing Street calling on the government to take decisive action to solve the energy price crisis, which has left seven million UK households in fuel poverty this winter.
The petition calls on the government to provide additional financial support for households facing fuel poverty, launch a new national programme to undertake energy efficiency upgrades across the country, more than triple UK renewables capacity by 2030 and push through market reforms to help reduce the cost of clean power, and halt approvals for new oil and gas fields.
It joins an array of calls from business groups ahead of next week’s Spring Budget for the government to rethink plans to roll back its energy bill support programmes for households and businesses, pull forward plans to invest £6bn in energy efficiency programmes from 2025, and deliver on promises to lift the de facto ban on onshore wind farms.
The petition has secured support from Dragons’ Den star and environmental campaigner, Deborah Meaden, who urged the government to embrace energy market reforms that can curb bills and boost the roll out of renewables.
“There is simply no excuse in one of the richest countries in the world for people to be having to make the choice between heating and eating or being forced into public spaces simply to keep warm,” she said. “The UK’s reliance on costly fossil fuels has left this country vulnerable to oil and gas price fluctuations – an absolute catastrophe for energy bills in the wake of Russia’s invasion of Ukraine. It’s time we overhauled the current energy system, decoupled renewable prices from the global gas market and prioritised harnessing our abundant natural resources, including wind, wave and solar power in order to secure energy supply and bring prices down in the long-term.”
Tessa Khan, executive director of campaign group Uplift, said the results of the new survey showed “the public is way ahead of the government on how to solve the UK’s energy crisis and lower energy bills permanently”.
“Fix the leaks in our buildings to keep the heat in, crack on with developing cheap renewable energy, and move the UK off unaffordable fossil fuels,” she said. “Yet, because of the constant whispering of fossil fuel lobbyists, this government is dithering, while wasting public money subsidising new oil and gas drilling that will make zero difference to our energy security or bills… Unaffordable energy prices are at the root of so many of the problems we are currently experiencing, needlessly. Other countries are successfully bringing down bills by upgrading homes with insulation and heat pumps and by accelerating renewables, so why can’t we? This government just needs to get on with it.”
The intervention came as Scottish Power CEO, Keith Anderson, warned the UK government risked squandering a “God-given” opportunity to boost the economy and accelerate the shift to renewable energy by failing to ease planning barriers for new projects.
“It only takes us two years to physically build an offshore wind farm but the planning process is fundamentally flawed and means it takes us more like 10 years,” he said in an interview with the Financial Times. “We have got a God-given project of work in this country that’s ready to go, the money is there. It would kickstart the economy after Covid and the gas crisis and spread investment throughout the country, with money filtering down through local supply chains.”
Calls for planning reforms are at the top of the list of asks from the renewables industry ahead of the Budget, alongside calls for new capital allowances to help the sector remain competitive in the face of the new green industrial subsidy packages announced in the US and EU.
Meanwhile, think tank Common Wealth today published a major new report arguing that a publicly-owned energy firm could help save Britons nearly £21bn a year. The report calculates that a state owned provided of electricity could cut power costs for homes and businesses by £20.8bn or £252 per household.
The analysis will be seen as a boost to the Labour opposition’s proposals for a publicly owned energy company, dubbed Great British Energy.
The Common Wealth report argues that huge savings could be realised by creating a state-owned investment vehicle to buy out clean energy assets such as wind, solar and biomass generators on older contracts and running them on a non-profit basis.
“The energy system faces two acute challenges: the staggering profits being made by generators, and the need to rapidly decarbonise generation,” said Common Wealth director, Mathew Lawrence. “A publicly owned generator can address both these pressing issues, rebuilding out energy system around the public interest. That is the fastest, fairest, most effective way to build a clean, secure, affordable power system.”
The proposals are likely to prove controversial given they could require a dedicated government bond issuance or some form of compulsory purchase process. Previous attempts by the government to encourage generators with long term clean power contracts to switch to new, more competitive contracts faltered, ultimately leading to the introduction of a windfall tax on clean power generators.
However, Labour has argued its plans for a state-owned energy company would simply replicate the approach taken in many European countries where government-backed ventures have played a key role in the development of their renewables industry and are now major investors in the UK’s energy sector.
In further renewables news, a report today from the Oxford Sustainable Finance Group revealed how electric utilities with a higher share of solar and wind power capacity have a lower cost of equity and debt than fossil fuel focused peers on a global scale. The trend is particularly pronounced in Europe, the report found, implying that climate-friendly policies and actions have been successful at making investments in clean energy generation a highly cost-effective energy source.
Globally, the cost of debt of renewable electric utilities is at six per cent, compared to 6.7 per cent for fossil fuel electric utilities, the report concluded.
Similarly, utilities focused on renewables have a cost of equity of 15.2 per cent, compared to 16.4 per cent for fossil fuel-focused power suppliers.
Moreover, in Europe the cost of equity gap between lower-carbon electric utilities and higher-carbon peers has been widening over time. For example, from 2015 companies with a higher proportion of solar and wind in their energy mix have seen a decrease in the cost of equity from 17 per cent to 14 per cent, while those with a lower proportion saw the opposite trend.
The same trends are apparent in extractive industries. The report shows that globally, coal mining has the highest cost of capital, with the cost of debt increasing to 7.9 per cent in 2021 and the cost of equity increasing to 18.2 per cent, followed by oil and gas production and renewable fuels.
“The cost of capital is a major determinant of the total cost of different energy technologies and reflects the risks financial markets perceive, for example, how quickly coal might be displaced by renewables,” said Dr Ben Caldecott, director of the Oxford Sustainable Finance Group.
The report found that cost of equity gap varied by region, suggesting the experience in Europe could yet be replicated in other countries that adopt more ambitious clean energy policies.
“In North America, we don’t see a consistent trend in the cost of capital for renewable versus fossil fuel power,” said lead author Dr Gireesh Shrimali. “What remains to be seen is whether the policy landscape can shift, particularly with big changes such as the recent Inflation Reduction Act.”
