The green energy revolution is coming but how will it be financed?
As the UK enters its steepest recession since the 1970s, it is tempting to ignore some of the macro trends that were already gaining momentum before the Covid-19 virus arrived on British shores.
One of these was the financing of the country’s clean energy infrastructure. Empty skies and cleaner air in April may have reminded many UK residents – and investors – of the potential for a less polluted planet.
We are already seeing evidence of the green energy revolution the length and breadth of the United Kingdom with the wind farms on our skylines and distant horizons being the most obvious evidence of what is happening. The UK has also this year demonstrated its ability to derive over half its electricity from non-fossil fuel sources.
But as the country struggles to come out of lockdown, can the momentum achieved with financing clean energy be maintained?
We all like to talk about the coming green energy revolution, but much of this cannot and will not be financed by the tax payer. A big slice of the financing of the UK’s clean energy infrastructure will likely come via private investment. With fossil fuels rapidly falling from favour with many investors, it is possible that alternative energy will become a major source of economic and employment growth when we emerge from the current crisis, not just for the UK, but also further afield.
According to the International Renewable Energy Agency (Irena), renewable energy could power a global recovery by providing up to USD 100 trillion in GDP gains between now and 2050.
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First published in ESG Clarity.