Britain brings green focus to investment summit as it seeks net zero funds

Prime Minister Keir Starmer hails £24 billion investment as 'vote of confidence' before UK summit

New offshore wind farm contracts were awarded in a recent UK auction as the Labour government aims for a clean power grid by 2030. AFP

After a rocky first 100 days in power, Britain's Labour government will tout its flagship green policies as a key early win to the world on Monday, at an investment summit meant to raise funds for a march towards net zero.

The government said more than £24 billion ($31.36 billion) of green investment was already in the bag in what Prime Minister Keir Starmer called a “huge vote of confidence” in the UK, before the wide-ranging summit involving Google and banks such as Barclays and HSBC.

With a belt-tightening budget expected on October 30, Mr Starmer is relying on the private sector for at least two of his five “missions” to renew the UK, namely spurring economic growth and making Britain a clean energy “superpower”.

Labour has approved new solar farms, lifted a virtual ban on onshore wind parks and moved to set up an £8.3 billion ($10.85 billion) Great British Energy company in the hope of creating attractive conditions for investors.

Several offshore wind contracts were awarded in a September auction, after the last round under the previous Conservative government had flopped with no uptake from investors. Britain raised the pot available to £1.5 billion ($1.96 billion) to lure interest.

At least two thirds to three quarters of the investment needed for net zero will have to come from the private sector, said Ed Matthew, a director of climate think tank E3G. He said Labour's early moves will “send a very strong signal to investors globally that the UK is really serious”.

Ministers “are obviously coming under a lot of pressure in lots of quarters, but when it comes to clean energy there's absolutely no question that they've hit the ground running,” he told The National. “I think it's fair to say they've been pulling out all the stops since they came in.”

Green targets

Labour has set a target of generating exclusively clean power by 2030, in what has been described as a “stretch target” to spur the industry into action. Britain's last coal-fired power station symbolically went offline on September 30, but gas still provides a big chunk of its electricity, especially when wind is low.

Beyond cleaning up the power grid, Labour has ambitions for green steelmaking, carbon capture and trading in hydrogen fuel, backed by a £7.3 billion ($9.54 billion) National Wealth Fund. Ministers portray their plans as a boost for Britain's energy security as well as the planet.

The UK has also appointed a diplomatic envoy for climate change, Rachel Kyte, after the position had been left vacant under the Conservatives. Labour accused the previous government of damaging Britain's reputation on climate change.

At home, Energy Secretary Ed Miliband is a favourite target for the Conservatives in opposition, who accuse him of an overly meddlesome approach to net zero. Both remaining Tory leadership candidates, Robert Jenrick and Kemi Badenoch, attacked him in their party conference speeches.

However, Labour sees net zero as an area of progress, and appointed a team of clean power commissioners on Friday to oversee its 2030 plans. Businesswoman Poppy Gustafsson was named Investment Minister days before the summit in London.

The £24 billion of private funding already priced in by the government includes plans by Spanish company Iberdrola to double its investment in the UK, including in an East Anglia wind farm. Downing Street quoted its chairman Ignacio Galan as hailing Britain's “clear and stable policies”.

Wind farm contracts awarded to Danish energy giant Orsted and Portugal's Greenvolt will bring in a total of more than £10 billion, the government said. Orsted's chief executive Mads Nipper said there were signs that Britain “wants to work with businesses”.

Although Monday's summit will not raise all the money required, Labour will want investors to use it as an opportunity for announcements, Mr Matthew said. He said pushing for the clean power target could also help Mr Starmer achieve his economic growth mission.

“The UK is in a global competition for net zero technologies, and the world's beginning to ramp up deployment of renewables. The investment will flow to those countries that have the most attractive policies in place to make it happen,” he said. “There are plenty of other opportunities for investors around the world.”