Installations of solar power in the UK are likely to top records this year, and could offset some of the expensive dependence on gas, research has found, but the global outlook for green energy is still gloomy.
Investment in clean energy around the world fell to $45.9bn (£29bn) in the third quarter of 2013, according to Bloomberg New Energy Finance, a 14% drop on the second quarter and a reduction of a fifth compared with the same period last year.
While investment in clean technology for the UK has risen, from $1.6bn (£1bn) to $2.6bn (£1.6bn), the sector is under threat as rising energy bills have prompted calls for green subsidies to be scrapped.
Michael Liebreich, chief executive of BNEF, said this would be a mistake and would not bring down bills: “Gas prices have risen more than 8% – we know that it is gas prices that are pushing up bills. I don’t follow the logic of how that has to do with green subsidies.”
Green energy could help to reduce bills, he said, pointing to some periods in the UK when, thanks to the contribution of wind power in particular, wholesale short-term prices had reduced considerably. “But that doesn’t get passed through to the consumer, because there is no transparency in the market, and so people don’t know about it. Yet you get this distortion of people saying [bill rises] are from green subsidies.”
His advice to the Conservative party is to articulate a clear energy policy that diversifies supply. “What the right needs to do is not pretend that climate change is not happening, not pretend that an energy transformation is not under way, and not to take refuge in fracking,” he said. “They need to come up with good Conservative policies that create the transition while controlling costs.”
Liebreich, who founded New Energy Finance in 2004, is widely lauded as a leading energy analyst.
He also criticised Ed Miliband’s pledge to freeze energy prices. “If you control the price, there is less investment, therefore less supply, therefore prices go up. Anyone who says you can reduce prices through controls has been asleep for the past 30 years.”
Investment in green technology has fallen in economies including China and the US, as well as most of Europe, in a continuing sign of weakness in the fledgling sector as the political will to transform energy infrastructure has waned in the wake of the financial crises and recessions, and in the US because of the bonanza in cheap shale gas.
In the US, total clean energy investment fell from $9.4bn in the second quarter of 2013 to $5.5bn in the third, with China down by a smaller margin, from $13.8bn to $13bn for the same periods. Investment in India also fell slightly, by $300m.
Investment in the UK was shored up by the falling price of solar components, which helped to spur installations. But “solar farms” taking up acres of land with solar panels have come under fire from some politicians and countryside campaigners.