Potential investors in the energy sector could be deterred by the five-year review set into the government’s commitment to reach net-zero greenhouse gas emissions by 2050, experts have claimed.
Speaking at Utility Week Energy Summit last week, RWE Generation’s chief commercial officer, Tom Glover, said the caveat that the UK would review its net-zero target in 2024, to see how other countries are progressing with their own plans, was “not ideal”. He called on the government to set out immediate policies to show investors that it was serious about its 2050 commitment.
His words were echoed by Dr David Joffe, who authored the Committee on Climate Change’s recent report on reaching net-zero. Joffe said it was vital that government did not delay enacting policies or “we will have failed before we’ve started”.
Meanwhile, Nina Skorupska, chief executive of the Renewable Energy Association (REA), stressed that there was also an onus on the industry to unite to push for the changes needed to hit the 2050 target.
The panel spoke last Thursday, the day after the government announced its pledge to amend the Climate Change Act 2008 to commit to achieving net-zero emissions by the middle of the century.
Commenting on the detail of the policy during last week’s panel session, Glover said: “I understand the view of government that they want to review where everyone else is in five years’ time but from an investor point of view, it’s not ideal.
“As an investor you think –do I want to set myself up for this but then they’re going to review it in five years’ time?”
He added: “My message to government would be, stop faffing around trying to be academically excellent. Set simple policies and accept they might not all be 100% right straight away. If you stopped being academic and sent a clear signal that we’re going for this target then it’s easier as an investor to see it instead of trying to work out all the things around the edges.
“There are lots of investment opportunities around the world and people like me have to get on a plane to Japan, because that’s where the best investment opportunities are at the moment. I’m really happy if I can stay in London and do it.”
Joffe agreed that the danger of the five-year review was it could “dampen the signal of setting net-zero in legislation”.
He said: “People are not going to invest without the policies in place. There needs to be an urgency in government to say they will put policies in place and not wait for that five-year review. Otherwise we are failing before we have started.”
He added: “We know what we have to do, now we have to get on with it. Government knows all the actions that will be required so we urgently need that to be translated into policy.”
Meanwhile, Skorupska replied to a question from the audience about whether a new body should be created with responsibility for ensuring the UK hits the net-zero target.
She said: “While that is attractive in some senses I feel like let’s just make what we have got work better. We need to get our regulator working better, get the government to frame what happens next properly. We don’t need any more layers.
“We as an industry all have to come together now if we are going to meet these goals. We need to make it happen.”