Investment strategies in the UK energy transition

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Achieving net-zero by 2050 in the UK presents a considerable investment challenge, requiring investments of £50 billion per year by 2030 in low-carbon technologies and infrastructure. Substantial investments across sectors, such as electricity, buildings and transport, will be required to decarbonise. Different investors have different strategies when investing in low-carbon technologies, these different private strategies and motivations for investing in low-carbon assets make the energy sector transition a complex challenge.

A key challenge for policy-makers is to understand the uncertainties posed on the UK pathway to net-zero by the different investment strategies of existing and new investors in low-carbon technologies. This will help to inform policies that can create an attractive investment environment for investors.

This policy brief explores:

• who should finance the net-zero transition of the UK electricity sector
• how modelling approaches are useful to capture investors’ diversity and inform effective policies to encourage low-carbon investments
• the need for a stable and strong policy regime, coordinated with the diversity of investors’ strategies, to support low-carbon investments
• to provide opportunities to scale-up investments in renewable energy technologies, market diversification – including the growth of local investors – needs to be encouraged

Read ‘Investment strategies in the UK energy transition’

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This Policy Brief is part of The Bartlett's Together for climate action campaign.

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Authors:

• Elsa Barazza (UCL ENERGY INSTITUTE, elsa.barazza.14@ucl.ac.uk)

• Pei-Hao Li (UCL ENERGY INSTITUTE)

• Brunilde Verrier (UCL ENERGY INSTITUTE)

• Neil Strachan (UCL ENERGY INSTITUTE)