Investment in renewables to 'fall off a cliff'

Investment in renewable energy will fall off a “cliff edge” within three years and requires government support if the UK is to meet its legally binding climate targets, a green think-tank has warned.

Analysing the government’s last three iterations of its infrastructure pipeline, the Green Alliance – an independent think tank – has found investment in wind, solar, biomass and energy-from-waste projects is set to fall by 95% between 2017 and 2020.

It added that renewables spending fell by £1.1bn in the last six months of 2016, due to a shrinking pipeline of projects.

In a briefing on the government’s infrastructure pipeline, the Green Alliance said: “This cliff edge needs to be avoided if the UK is to meet its world leading carbon budgets and Paris agreement pledge.”

However, the think-tank did praise the government for cutting £2bn from the cost of nuclear decommissioning.

It said: “This is good news because it frees the Department for Business, Energy and Industrial Strategy’s budget up, potentially enabling the department to spend on deployment of low carbon heat and efficiency rather than legacy clean-up costs.”

Low carbon transport spending, excluding HS2, rose by £2.3bn from spring last year, the think-tank found, as local authorities chose to spend transport funds on bus and light rail projects, as well as cycling and walking infrastructure.

Private sector investment in infrastructure is “rapidly moving away” from carbon-intensive schemes, the Green Alliance said, but in contrast public spending on high-carbon infrastructure is increasing, albeit slowly.

Looking at private low carbon investment, the think-tank said this peaks in 2017 before falling back, due primarily to a lack of low carbon policy in the early 2020s.

It said: “Nevertheless, the pipeline shows that divestment of high carbon assets can be matched by investment in low carbon ones, with the right policy environment.”

Commenting on the briefing, Renewable UK executive director Emma Pinchbeck said: “The infrastructure pipeline shows that the private sector understands the smart money is on the renewables industry – that is why they are moving from high carbon assets to low carbon ones.”