The government must listen to the public, and take decisive steps to prevent global warming and encourage greater investment in new renewable energy projects, by establishing a more stable regulatory framework
To blow your own trumpet can feel very un-British. As a nation, we typically shy away from talking about our accomplishments. We'd rather discuss what isn't great or what we can do better, than what we excel at. And as a nation that is currently quite divided, it's important to realise that there's a lot that makes Britain great, particularly when it comes to renewable energy.
For many years, the UK has been quietly establishing itself as a renewable energy hub and dare I say it one of the world's leaders in renewable energy development. While much of this activity is out of the public's line of sight, investment in the UK's renewable industry today is benefiting the entire population.
The UK is now home to Europe's largest floating solar park in Walton-on-Thames, as well as the world's largest offshore wind farm, Thanks to developments such as these, figures from the Department of Energy and Climate Change (DECC) show that renewable energy accounted for a record breaking 25.1% of total electricity generation in the UK in the first quarter of 2016,
What's more, we achieved a significant milestone earlier this year, after the UK briefly powered itself without burning any coal for the first time in more than 100 years.
Meanwhile, investment in renewable energy production is growing. Investment levels in the UK increased by around 25 per cent during 2015, despite the price of fossil fuels falling, according to the REN21 Global Status Report. As such, the UK is now ranked as Europe's largest renewables investor and the fourth largest in the world, ahead of India and just behind China, the US, and Japan.
Fuelling further growth - how the UK can maintain its green credentials
Despite making great headway, the UK's position at the forefront of the green revolution is not a certainty. Future growth can be threatened by the outcomes of the recent referendum and policy changes, which are impacting investor confidence. Without a stable regulatory backdrop, investors are less willing to make funding available for renewable energy projects in the UK.
This means that many planned developments may never be realised, while the UK's 2020 emissions targets and those agreed at COP21 last year could quickly become unachievable.
To give investors the confidence to invest in long-term buy and hold assets, such as wind and solar projects, the government must support a stable environment that will attract institutional investors looking for reliable and long-term returns. But how can the regulatory and policy risks be mitigated?
1. Adopt a long-term approach. Investment cycles extend far beyond the four or five year terms that political parties are typically in power, and there must be a willingness to reconcile these two competing timeframes.
2. We must develop policies informed by international case studies. The stable investment environment in Germany is a good example to follow. The shift to the auction regime for solar has not been without its problems, but capacity deployment continues apace and investors benefit from a high degree of Government support and long-term policy certainty provided through the Energiewende.
3. Communication, often one of the biggest stumbling blocks, must be improved. Governments can reduce uncertainties through better-communicating the rationale behind decisions - demonstrating they are driven by robust evidence rather than ideology.
Provided political and regulatory risks are managed, energy infrastructure offers an attractive proposition for private capital. Renewable energy assets are a known quantum - providing long-term inflation-linked investment returns and could provide liability matching assets for pension schemes in particular. Institutional investors such as pension funds could make an enormous contribution to developing the clean energy sector of the future.
With a stable regulatory framework in place, renewable energy can offer attractive returns to institutional investors, as evidenced by three major pension funds in continental Europe recently announcing plans to boost investments in low-carbon industries by more than $31bn (£20bn) by 2020. Further inspiration can be sought from major retailers such as IKEA and Marks & Spencer, which have unveiled ambitious green investment plans.
Not only can renewable energy combat climate change, it has been proven to bring down the wholesale costs of electricity significantly, so it's unsurprisingly popular with voters, as was shown in the DECC Wave 17 Attitude Tracking survey earlier this year.
The government must listen to the public, and take decisive steps to prevent global warming and encourage greater investment in new renewable energy projects, by establishing a more stable regulatory framework for renewable energy assets both operational and in development. Only then will institutional investors truly appreciate the compelling financial and climate case for investment.
With the official signing of the Paris Agreement, the UK has a responsibility to meet its 2020 emissions targets in what is a global effort to reduce carbon emissions. Here at Low Carbon, we believe that we must achieve a true low-carbon economy, and act now to stop or reverse climate change before the damage is irrevocable. Investment in renewables is indispensable to this process and goes hand-in-hand with the cultural shift that we need to take place, where we reduce our reliance on fossil fuels.
A broader, more diverse energy mix in the UK which includes solar and wind, for example, will not only benefit our environment but will also enhance the sustainability of our energy industry as a whole, making sure we don't trail behind other countries in Europe and globally who already have this as a priority. In generating a quarter of the UK's electricity supply, it is clear that renewable energy is a core, resilient electricity source that is here to stay, and we need to shout about this from the rooftops.