Despite the economic impact of Brexit and a global pandemic, green finance is set to continue its steady growth across the world.
Speaking at the Green Horizon Summit on Monday, November 9th, Rishi Sunak said he wants the UK to lead the charge. The Chancellor laid out plans to issue our first green bonds (or green gilts) in 2021. This is just one part of a plan Sunak claims will make the UK a world leader in carbon reduction.
The fight against climate change has gained serious momentum over the past two years. Sunak’s announcement not only confirms the UK’s commitment to a green recovery plan but the building of a green economy for the future. This signifies the promise of clean energy projects and the inevitability of a transformed energy sector.
Why is Renewable Energy a sensible investment right now?
The UK has become increasingly attractive to renewable energy investors, especially after lifting its onshore subsidies ban which blocked financial support for onshore wind projects. Now renewable energy is another green sector in which the UK wants to become global leaders. Earlier this year the Prime Minister went so far as to pledge that every home would be powered by offshore wind within a decade.
The cost of renewable energy has seen a considerable drop over the past few years. In fact, wind and solar have become the cheapest energy option in many cases according to an IRENA report. Then there are the thousands of clean energy jobs that can revitalise local economies. Making renewable energy an attractive option in a post-Covid economy.
According to IRENA, the renewable power generation capacity commissioned in 2019 was more than twice that of 2010, but it only required 18% more investment. This means investment dollars are going further in renewables. Yet another reason why the UK would want to lead in green finance and renewable energy generation.
Can green finance lead to a clean energy transformation?
There are sceptics who doubt the reliability of renewable energy investments, in part because of their generation volatility. Some economists say that with current technologies, renewables will only ever be able to produce up to 80% of the world’s electricity. However, this only bolsters the case for finding financing for green projects like green tech and energy efficiency.
Technology in the renewables sector is evolving at a rapid pace. Solutions for improved storage, efficiency, and transportation are already emerging. Investment in green tech has seen a surge, with a recent £134 million awarded to green technologies and innovative start-ups from the government.
Energy optimisation will also play a large part in the strength and economic certainty of renewable energy worldwide. By making everything from buildings to dishwashers more efficient, we reduce our demand on the energy system and therefore decrease our reliance on imported energy and fossil fuels.
What does a green economy mean for the future?
By working in earnest to build a green economy and becoming a leader in green finance the UK could do far more than achieve net zero carbon emissions by 2050. We could also secure our resilience in a time of financial and social fluctuation and recovery.
In addition to announcing the UK’s first green bonds, Rishi Sunak announced that we will become the first country to mandate the Task Force on Climate-related Financial Disclosure (TCFD) by 2025. This will require that large listed and private companies disclose the threats of climate change to their business.
This level of transparency will make a clean transformation of the energy industry inevitable. And while reporting and disclosures may seem like a nuisance, there are opportunities for growth to be found in building a green business. Renewable energy paired with energy optimisation is quite simply the most cost effective and sustainable option for any organisation moving forward. At Monarch, we can help simplify your green energy procurement and optimise your resource efficiency. Our goal is to help you flourish in a future green economy.
If you’d like to learn more about the technology leading the green energy revolution download our Renewable Energy Guide.