“Hindsight is a wonderful thing.” That was David Beckham’s response when asked whether England might have won the 2002 World Cup were it not for his being injured. Back then, weeks of headlines over one fractured metatarsal seemed proportionate. After all, the UK was in the middle of the longest sustained period of growth in post-war history, leaving us free to worry about other things. But in hindsight an essential part of the economy was, like Goldenballs’ famous foot, broken.
Growth was being driven entirely by consumption - much of it fuelled by debt. No net increase in economic output came from business investment or trade. Today, as the recovery finally takes hold, we know growth needs to be more balanced, with a bigger contribution from manufacturing, exports and technology.
Our renewables sector can deliver all three. It can boost our manufacturing supply chains. There is demand across the world for the UK’s renewable expertise and for the technology we have pioneered. We even have a helpful natural resource in being, as Secretary of State Ed Davey has pointed out, “the windiest place on earth.”
Add to this the environmental imperative of reducing greenhouse gas emissions and the rising demand for electricity, with worldwide consumption due to increase by 50 per cent by 2050, and the opportunity seems clear.
The Government’s latest annual energy statement showed £31bn of private-sector investment in renewable electricity since 2010 - supporting up to 35,000 jobs - and work is underway to attract more investment through the Offshore Wind Industry Council. But there’s more we need to do to achieve a thriving green economy.
The problem is that short-term political thinking is being allowed to hold sway. While it is quite right that energy prices are the subject of debate, it seems quite wrong that renewables are seen as part of the problem, not part of the solution.
The Government’s own analysis shows that ongoing reforms to boost low-carbon generation will help to reduce wholesale electricity prices and lower average household bills in the long term. But actions such as the review of so-called ‘green levies’ undermines the Government’s wider aim of supporting renewables investment.
We need a coherent public policy framework which gives investors confidence. That should include an ambitious 2030 decarbonisation target, with the Government reconsidering its position on this as the Energy Bill continues to work its way through Parliament.
Recently we saw a group of major investors write to the Chancellor saying a lack of clarity on green energy policy is stalling investment here. With £110bn needed for UK energy infrastructure by the end of this decade, that is regrettable.
Insurers play their part by helping to manage the operational risks renewable energy producers face. At RSA we insured the world’s first onshore turbines in the 1970s and today we insure around 80 per cent of the world’s offshore wind facilities as well as solar, biomass and small-hydro installations. Our own experience is that renewables have plenty to offer to the economy, the environment and the communities we operate in.
Until recently, politicians from all parties thought the same, backing renewables because they believed that was in the UK’s best interests. It still is.