Green Madness: Britain’s Unilateral Carbon Targets May Cost £330 Billion By 2030
Britain will need to invest 330 billion pounds in its energy sector, excluding networks, by 2030 and return its economy to growth to meet carbon emissions reduction targets, the London School of Economics said in a report on Thursday.
Britain aims to cut carbon emissions by 34 percent below 1990 levels by 2020 and by 80 percent by 2050, but does not have a binding target for 2030.
The investments are needed to build new power plants, retrofit existing ones with carbon-reduction technology and to limit energy demand.
“The key question will be how do we attract pension funds, which are one source of capital, and generally the financial sector, being banks and insurance companies, to join the market?” said Volker Beckers, chief executive of RWE npower, which commissioned the report.
He said only around 30-40 percent of the investment can be covered by balance sheets and project finance of British energy companies, leaving the lion’s share of money needed to other investors.
Experts have forecast Britain’s energy investments at 200 billion pounds until 2020.
A separate report showed on Wednesday that Britain’s power grid alone needs a yearly investment of 1.6 billion pounds to connect renewable energy.
If Britain wants to reach its long-term climate change targets, it also needs to return to stable economic growth and the eurozone debt crisis has to be resolved, the LSE said.
This scenario is one of three pathways the report outlines, setting out the most optimistic option for Britain’s energy system, but also the most expensive one.
“It involves a financial services sector in good health, that has not only recovered sufficiently to channel higher levels of inward investment and to attract international investment in the UK,” the LSE said in its report.
The school estimates that by 2030 around 67 gigawatts (GW) of power plants in Britain will be a mixture of gas plants fitted with carbon capture and storage (CCS) technology (10 GW), traditional fossil fuel plants (40.5 GW) and nuclear power stations (16.5 GW).
This will be paired with around 50 GW of renewable energy capacity, such as wind and solar farms.