It is promising to see the UK Government launch its first sovereign green bond to finance investment in tackling the climate crisis and aid recovery from Covid-19. The pandemic has been a watershed moment for sectors across the entire economy, and with much discussion of how best to bounce back, strategies for a green recovery are at the centre of the agenda.
Sovereign green investment has become increasingly present across Europe, with Germany, France and the Netherlands all having issued their own green bonds. As recently as September, European Commission president Ursula von der Leyen said that 30% of the EU’s coronavirus recovery programme should be funded in this way.
So, it is exciting to see the UK reaffirm the importance of the fight against climate change in its own strategies for economic recovery, with the bond helping to fund investment in UK low-carbon energy infrastructure, reducing transport emissions and retrofitting homes to make them more environmentally friendly – which was also a central focus in the summer statement this year, including a £3bn green investment package from the Chancellor.
With the UK also committed to its goal of net-zero emissions by 2050, one market stands out. The solar power industry clearly has an exciting future ahead. In fact, it is a market in which the UK has become a notable global player, having expanded its capacity from a mere 12 megawatts in 2006 to over 13,000 megawatts last year. In June, government data revealed that renewable energy made up 47% of the UK’s electricity generation in the first three months of the year, breaking all previous quarterly records.
In 2018, turnover in the UK low carbon and renewable energy economy (LCREE) was estimated to be £46.7 billion, a rise from £40.4 billion just three years previously. And as the UK emerges from the financial maelstrom of the coronavirus pandemic, economists and analysts argue that this will only grow, with renewables playing a pivotal part in visions for a green economic recovery.
But solar is not just about making a sound long-term investment; it’s about taking responsibility for our environment. In fact, burning coal, oil and gas to produce electricity generated around 20% of the UK’s total CO2 emissions in 2017. This is a promising step in the right direction and represents a 38% reduction in emissions compared to 1990, but there is still much more to be done. Estimates suggest that there is a need to increase renewable energy sources by up to five times its current level.
At Kajima Partnerships, we are proud to be part of the change, through our own investment programme as governments across Europe recognise the appetite for green investment opportunities. Working alongside Low Carbon Alliance and landowners across the UK, we are looking to develop ground-mounted solar farms harnessing the UK’s surprisingly good levels of irradiation rolling out investment in clean energy projects and playing our part in decarbonising the UK’s power supply.
If you are interested in hearing more, discussing this further or finding out how you can get involved, please contact Chris Gill at Chris.Gill@kajima.co.uk