The U.K. government is squandering an opportunity to move towards a zero carbon future by pumping billions of stimulus cash into fossil fuels and all but neglecting renewable energy, according to a major new report released today.
Contrary to Prime Minister Boris Johnson’s claim that Britain could become the “Saudi Arabia of wind power,” the report by Finnish power firm Wärtsilä Energy reveals that the U.K. has allocated $5 billion in stimulus commitments to fossil fuels, while clean energy will receive $158 million—just 3% of the injection intended for hydrocarbons.
The disparity indicates that current stimulus measures, intended to kickstart an economy ravaged by the coronavirus crisis, will cement fossil fuels’ place in the energy system, making it harder for the U.K. to achieve its target of a 57% reduction in greenhouse gas emissions by 2030.
“The UK has enormous potential for stimulus to build back better. We have the finances and the technology,” said Ville Rimali, growth and development director at Wärtsilä Energy, speaking to Forbes.com. “Stimulus can also support a cleaner and more resilient energy system, while also delivering vital new jobs and supporting our green economic recovery from COVID-19. The government has proposed a green budget and this is a once in a generation opportunity to avoid baking GHG emissions into the economy through to 2030.”
The report points out that, according to International Renewable Energy Agency calculations, government policy incentives and stimulus injections for renewables can expect to leverage additional private investment by a factor of three to four. Therefore, if the U.K. government was to put its $5 billion fossil fuel generation stimulus into renewable energy, $16.5 billion in investments could be leveraged, delivering a 60% renewable energy system. This could, in turn, deliver 58% lower carbon emissions from the power sector, putting the U.K. on track to meet its 2050 net-zero carbon goal.
Additionally, as management consultancy McKinsey reported earlier this year, every $10 million spent by the government on renewables creates around 75 jobs, compared to just 27 jobs when that money is spent on the fossil fuel sector.
The report, Aligning Stimulus With Energy Transition, focuses on the potential of five large economies—United States, Brazil, United Kingdom, Germany, and Australia—to reconfigure their energy systems by deploying stimulus packages as large-scale investments in renewables.
Wärtsilä describes the raft of national stimulus plans seen globally as a “once-in-a-generation opportunity for a clean energy revolution” to “to boost economic growth, create millions of jobs and put global greenhouse gas emissions into structural decline.”
But in the U.S., too, the fossil fuel versus renewable energy disparity is glaring: the current energy stimulus stands at $100 billion USD, of which $72 billion has been allocated to fossil fuels. Wärtsilä found that by putting the same amount into renewables, the country could build 107 gigawatts of new renewable energy capacity, producing a 6.5 % rise in the share of renewable electricity generation—from 17.5% to 24%. Such a stimulus would create 544,000 new jobs in the clean energy sector—175% more than will be delivered in the fossil fuel energy industry.
Download the Wärtsilä Report “ALIGNING STIMULUS WITH ENERGY TRANSFORMATION” here.
Continue reading the article on the Forbes website.