U.K. to Miss $67 Billion Mark Needed for Energy Shift, Lords Say

Written by
Will Mathis
Written by

Will Mathis

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(Bloomberg) -- The British government hasn't created enough incentives to attract the 50 billion pounds ($67 billion) in annual investments needed this decade to transform the energy system and effectively eliminate carbon emissions by mid-century, a House of Lords committee said Friday.

Prime Minister Boris Johnson's administration has failed to provide enough details on policies and funding models to deliver on his government's goals to decarbonize the electric grid by 2035 on the way to achieving net-zero emissions by 2050, the Industry and Regulators Committee said in a report. The importance of shifting the country away from fossil fuels as quickly as possible is being amplified by Russia's invasion of Ukraine, which sent prices of oil and natural gas soaring.

“We now need to have some clarity and some clear sets of principles and financial incentives that can usher in this big investment in this transformation in a timely fashion,” Clive Hollick the committee chairman, said in an interview. “Otherwise, given the lead times that there are, we'll simply miss the boat.”

The committee urged the government to create a Transformation Task Force that would report directly to the Prime Minister and work across departments to deliver on the energy-transition goals. This new body would develop and implement policies, coordinate between departments and monitor progress.

There also should be a review of how to fund the massive investment required to cut emissions. Particularly, the government should review its opposition to using public borrowing as a source of funds. Failing to do so could add to the growing burden consumers face from rising energy bills, the report said.

It also recommended that the U.K. make clear what role natural gas will play in the long term. Since it likely will be critical to the energy system, the government should “take all steps to facilitate the exploration and exploitation of our own resources,” the report said.