Charlotte Salomon is Deputy Chairman Membership for Saffron Walden Conservatives.
When it comes to a young market, small decisions can have unpredictable consequences. The Government believed that developers no longer needed financial incentives to invest in clean energy; that generous subsidies had allowed the industry to inflate faster than ministers anticipated. This reappraisal lead to a dramatic loss of confidence in Britain’s green power projects. Planning applications for onshore wind developments plummeted by 94 per cent, and as many as 12,500 jobs have been lost since the government eclipsed solar power subsidies.
We’re drawing closer to a new-found economic freedom – an opportunity to re-launch Britain’s green industry on a global platform. Germany has dominated renewable energy in Europe, but after Brexit, Britain could be looking to green power giants such as China and Japan to diversify our renewable energy market. Forty-three per cent of global renewable jobs are found in China, while the solar industry accounts for 3.4 million jobs worldwide. For policymakers who are interested in job creation, investing in renewable energy is considerably more effective than investing in fossil fuels. In the United States one in 50 new jobs created in 2016 was in solar.
In 2017, the Conservatives served up an ambitious pledge to deliver the cheapest clean energy in Europe post-Brexit. But if Ministers consider this goal to be achievable, why is Britain rowing backwards on renewables? Global investors are running scared as subsidies continue to be slashed on solar power, and red tape slapped on onshore wind power. The lack of political decisions and shock taxes have hindered large-scale solar projects being installed on hospitals and factories, and the number of people putting solar panels on their homes is at a six-year low.
The headlines continue to paint a stoic picture of Britain tackling climate change and eradicating carbon footprints but, behind the curtain, the Government have pushed pause on renewable investment to make sure that the maths works out. Under the EU’s renewable energy plan, the UK is expected to be extracting 15 per cent of energy needs from renewable sources by 2020 (our share of energy from renewables was just under 10 per cent in 2016), Ministers are still required to meet the target despite Brexit but, according to the Energy and Climate Change Select Committee, this figure is unlikely to be met unless urgent action is taken.
As things stand, renewables will have to come to market without government support. Below radar, energy strategists believe that developers are nursing project pipelines ready to produce hundreds of megawatts of capacity. They’ll need to be hardy to move into an unsubsidised market, but the benefits of solar energy to Britain’s economy have already piloted successfully. Nevertheless, with the government’s energy policies remaining as clear as a sandcastle in a sandstorm, investors will keep their green hands in their greener pockets for the time being.
The decision to abolish the Department for Energy and Climate Change in 2016 drew criticism from green campaigners and MP’s alike. Renewables were left on the back burner until last month, when Theresa May waded back into green-blue territory, unveiling a new target to halve energy usage of new buildings by 2030. She highlighted the importance of climate action to the British economy, hailing it as “one of the greatest industrial opportunities of our time” as she talked up plans to place UK at forefront of global scientific research and technological development.
If we want to signal our country’s commitment to sustainable, low-carbon growth strategies and renewables, the Government could introduce a green sovereign bond. This will have a positive impact on the private sector investment case for green sectors. Raising a green bond can improve Government tracking of climate-related and sustainable expenditure, France and Poland set a precedent for this in 2016/17. Nigeria and Fiji were the first developing countries to issue the bond, and Hong Kong has announced plans for a green sovereign bond programme with a borrowing ceiling of HKD100 billion ($12.8 billion) as part of its budget for 2018/19.
Green Sovereign bonds have been neatly highlighted by the Green Finance Taskforce, which issued a report on accelerating green finance. Headed up by Sir Roger Gifford, this report isn’t policy, but contains a forward by two junior ministers, and makes for a promising read. Other recommendations include green mortgages, and making it mandatory for companies to publish their strategies for climate change. Global climate leaders have set a target of achieving $1 trillion in green finance by 2020, but if we’re going to achieve clean sustainable energy in the UK, we first need to establish clean sustainable finance.