A major event is happening next month to inject speed into the transition. Led by the Energy Industries Council (EIC) it will address why globally, the pace of net zero has stalled and how to kick start rapid acceleration if we are to meet our goals.
Stuart Broadley, the CEO of EIC, sat down with ELN to discuss the major issues stopping so many clean tech projects getting to Final Investment Decisions (FID), where money is actually put in to make something happen.
The start of the carbon capture hub in the North East is an example of this, investment is also starting to flow into new nuclear including fusion research, yet we are still at the stage where despite the UK making big strides we have delays to getting clean tech to market.
Across the world there are still far too many FIDs for new fossil fuel plants, despite all the policies announced to try and force the transition, so why is it that companies and the markets are not putting their cash into green generation.
Stuart’s reply to this question is simple…
Why do companies invest? They don’t invest because the policy says invest. They invest because they see the commercial opportunity. So, the fundamental problem with net zero right now is not enough work is flowing from the policy landscape to the order intake.
“This government and many governments around the world have to unlock the potential through actually moving projects, through to the final investment decision.
Around the world we’re producing and using more coal, oil and gas than any other time in history. So, although we have these very ambitious net zero targets, most of the money is not flowing there yet. It’s flowing still into the hydrocarbon world. So, you have to ask question, what’s going wrong?”
“It is because it’s not economical, it is because of most of these renewable projects are not profitable enough for investors and developers to press the button. So, the policies are in place, that’s fine. But ultimately you then have to line up all the stakeholders in the value chain for those projects to move forward.”
So, who’s to blame for this?
“That’s the hard work of government right now. And you know, when governments are changing policies so quickly, it is hard for any of those key stakeholders to know what’s coming next.”
The next area is obviously finance, how do you convince the money people to put their cash into clean tech?
“That’s about return on investment, isn’t it?
“So, when you look at the renewable projects right now, let’s say in Western Europe, you could look at it globally as well. Where does the technology come from? Right. So, what are we talking about? Solar PV that comes predominantly from China, EVs that’s now being dominated increasingly from China.
“So now we look at offshore and onshore wind, which has been dominated by Western European manufacturers, and they are also really struggling to be competitive. And there’s this sort of decision point.
“Do we need to…
Read More: How do we get net zero moving faster?