Stimulus packages heavily support fossil fuels over renewables
28th October 2020 | Commercial Energy
A new report from global technology company Wärtsilä shows that the bulk of UK and US stimulus packages announced for energy have supported fossil fuel generation. The company said the measures to rebuild from the impact of the Covid-19 pandemic were missing the opportunity to create new green jobs and accelerate the transition towards a flexible, renewable-powered economy.
Wärtsilä’s report – Aligning Stimulus with Energy Transformation – highlights that $5 billion (£3.8 billion) stimulus commitments have been allocated to support fossil fuel energy compared to only $158 million (£121 million) for clean power generation. It pointed out this was not aligned with the UK’s ambitious targets to achieve 57% greenhouse gas reduction by 2030 compared with 1990 and net-zero by 2050.
The report models what could be achieved if UK energy stimulus was entirely dedicated to measures to cost-optimally increase renewable energy, aligning economic recovery with decarbonisation. Wärtsilä’s analysis identifies that UK energy stimulus, leveraged to unlock private sector investment towards the energy transition, could enable the UK to reach a 60% renewable power system by 2025. This would cut power sector carbon emissions by 58% compared to current levels and put the UK on track to meet its net-zero emissions target by 2050.
A cost-optimal 60% renewable power system would consist of 60GW existing and new renewable energy, supported by significant investment in energy storage and new flexible gas-based technologies, capable of operating on bio- and renewable synthetic fuels, including 7GW of battery energy storage and 14GW of flexible gas-based generation enabled for future carbon-neutral fuels, the company claimed. This could result in over 120,000 jobs in the renewable energy sector alone – 175% more than focusing stimulus on rebuilding legacy energy systems.
Wärtsilä Energy growth and development director Ville Rimali said, “In the UK across the G20 as a whole, the stimulus “scales” are too weighted towards support for legacy fossil fuel-powered systems, despite the agenda for rapid decarbonisation that’s underway worldwide. Refocusing stimulus towards renewable and flexible energy would accelerate this shift, create jobs and cut emissions.”
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