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Accelerated net zero transition could boost UK economy by £240 billion

  • Publish Date: Posted about 1 month ago
  • Author: Steve Walia

​Energy UK, representing over 100 companies in the UK's energy sector, has called on political parties to recognise the economic advantages of a swift transition to Net Zero. A study by Oxford Economics, commissioned by the trade association, reveals that accelerating the transition could enhance the UK economy by £240 billion by 2050, equivalent to the entire manufacturing sector.

 

The analysis suggests that private investment could increase by £165 billion, providing more flexibility for public spending on other priorities. Regional economies outside London and the South-East could see a GDP boost of £141 billion, with overall regional growth between 5.4% and 7.5% higher than the current trajectory.

 

Energy UK's findings also highlight the negative consequences of slowing progress towards Net Zero. Past reductions in green policies contributed an additional £9.8 billion to energy bills in 2022/23. The transition to electric heating and improved home insulation could protect households from future gas price spikes. Continued dependence on gas could make the UK over 40% more vulnerable to price spikes in the late 2020s, with vulnerability increasing significantly in subsequent decades.

 

The trade body emphasises the need for regulatory and political stability to attract private sector investment, crucial for funding the transition to Net Zero. The UK has the opportunity to lead in technologies such as hydrogen, carbon capture, and floating offshore wind. Prompt action is essential to capitalise on these opportunities amid growing global competition.

 

Energy UK's manifesto, "Energy Matters," proposes a partnership between the next government and the industry to unlock investment, transform the economy, and ensure a fair and efficient transition to Net Zero. The organisation stresses that achieving Net Zero will ultimately be less costly for taxpayers than delaying action and facing higher future expenses.