Despite the withdrawal of government subsidies, renewable energy is seeing unprecedented growth thanks to falling costs and increased private investment.
Support is also growing from multinationals. In October, Microsoft struck a deal with General Electric to source the electricity needs of its cloud computing services from a windfarm in Ireland. Other companies that have pledged to secure their electricity supplies using renewable energy include Ikea and Coca-Cola.
Published in June, Bloomberg’s New Energy Outlook 2017 expects $10.2 trillion to be invested in “new power generation worldwide to 2040.” Of this figure, 72% will go to renewables, with solar taking $2.8 trillion and wind $3.3 trillion.
In the UK, the cost of subsidies from offshore wind farms awarded in auctions dropped by more than 50% in September, largely as a result of falling construction costs. In fact, the price guaranteed to offshore developments has dropped to as low as £57.50/MWh. This figure is well below the £92.50/MWh guaranteed by the government to the developers of the new Hinkley Point C nuclear power plant four years ago.
At the end of September, the first solar power farm to be built in the UK without subsidies was opened in Milton Keynes by Anesco, a company specialising in solar and battery storage sites, backed by asset management company Alcentra.
Anesco’s executive chairman, Steve Shine OBE, said: “For the solar industry, Clayhill is a landmark development and paves the way for a sustainable future, where subsidies are no longer needed or relied upon. Importantly, it proves that the government’s decision to withdraw subsidies doesn’t have to signal the end of solar as a commercially viable technology.”
Claire Perry, minister for climate change and industry who opened the site, noted that: “Clayhill is a significant moment for clean energy in the UK.”
Speaking a few days earlier at the opening ceremony of Climate Week in New York, Perry reaffirmed the government’s support of investment into sustainable projects and infrastructure. In a statement published shortly afterwards, she expanded on government initiatives to boost green investment.
Perry noted that recent analysis from PwC showed that the UK is decarbonizing faster than any other G20 nation. Perry remarked: “Since 1990, we have grown our economy by two-thirds, while cutting emissions by more than a third. We should be proud of this progress; however the government knows that there is much more to do.” Furthermore, she announced that the government had established a new Green Finance Taskforce to “accelerate the growth of green finance.”
The City of London’s Green Finance Initiative was established in 2016 at the request of the government to promote the UK as a global centre for green finance. With the new Green Finance Taskforce, led by Sir Roger Gifford who also chairs the Green Finance Initiative, senior figures from the financial sector are now collaborating to take full advantage of this growth; including Nikhil Rathi, CEO of the London Stock Exchange and Rhian-Mari Thomas, managing director at Barclays.
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