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The Clean Growth Gap

Clean Growth Gap Summary

In Summer 2023, Energy UK commissioned consultancy Oxford Economics to understand the current investment climate for low-carbon technologies in the UK. The five reports published for the Clean Growth Gap series looked at how the UK can once again lead the way in attracting investment in clean energy and respond to the challenge posed by growing competition from the USA and Europe.

Paper 1: How low carbon energy investment can transform the UK

The first paper in the series, ‘How low-carbon energy investment can transform the UK’, launched the project and highlighted the challenges in attracting the huge amount of private sector investment required to fund the energy transition.

Paper 2: Funding the Future – the UK’s energy transition in a global context

The second paper, ‘Funding The Future’, examined in-depth the scale of support that is available for clean investment around the world, including in the USA, EU and China, and how it compares to the UK. It also set out what strengths the UK should build on as it enters the next phase of the energy transition, such as its existing skills, R&D sectors, access to capital through the City of London, and mature policy frameworks such as the Contracts for Difference scheme. This paper specifically looked at how the USA’s Inflation Reduction Act had influenced world markets and the competition for capital.

Paper 3: Path to Prosperity

The third paper, ‘Path to Prosperity’, looked at four different scenarios for reaching Net Zero, ranging from the current state of play (baseline), to a scenario where many policies are delayed, and then a more ambitious scenario than at present. This looked at what would happen under the scenarios where Government policy can either help stimulate investment, innovation and technological advances or, in contrast, where delayed action and reduced ambition has the opposite effect. 

Paper 4: Community Capital

The fourth paper, ‘Community Capital’, looked at how different regions of the UK could benefit from the energy transition by building on existing strengths in industry and manufacturing, as well as leveraging geographic advantages.

Paper 5: Accelerating Action

The final paper, ‘Accelerating Action’, looked at how the UK can attract the investment needed to maintain its world-leading role in clean energy, and ensure a secure, homegrown energy supply in years to come.        

With an estimated 70% of the funding required for the Net Zero transformation likely to come from the private sector, the report highlighted seven actions the UK should take to attract this investment.

Key stats from the series of reports:

The final seven recommendations for the Government were: