We have a tendency in the UK to label our successes as ‘world-leading’. This might help flatter a weary electorate, but superlatives like this cloud our ability to look beyond the past and focus on the challenges we face today. This is particularly true when it comes to the energy transition.

The UK has made genuinely impressive progress in a relatively short amount of time. But as Energy UK is exploring in its The Clean Growth Gap series, our past successes are no indicator of future prospects when it comes to the rollout of clean energy. The UK is no longer at the front of the pack, and international developments are likely to erode our position further unless we recognise the challenges that face us, play to our strengths, and make the most of the opportunities presented by the energy transition.

The temptation to boast about the UK’s progress is easy to understand. In reducing emissions from our power sector by two-thirds since 1990, the UK genuinely has been in the vanguard of decarbonisation. A large part of this success (alongside phasing out coal) has been our deployment of offshore wind, which truly is among the best in the world, behind only China.

Among large economies, the UK is unique in that a large proportion of our low-carbon electricity comes from offshore wind: 23% in the UK compared to just 5% in Germany. This has not happened by chance; favourable geography of the shallow, windy North Sea and concerted policy efforts in the form of the Contracts for Difference (CfD) programme led to the success of offshore wind in the UK.

Yet even in our celebrated offshore wind sector, there are growing concerns. The government has set a target of 50 GW of offshore wind by 2030, but the upcoming auction is likely to deliver at least 4.8 GW of capacity less than would be required to keep us on that trajectory. This has been exacerbated by the decision of one developer earlier this summer to stop work on its 1.4 GW project that would have provided enough cheap, clean energy to power 1.5 million households. And that is the sector where the UK is supposedly doing well.

Not just about electricity    
But the energy transition is not just about one sector. We need to use a range of low-carbon technologies to generate our electricity, including wind, solar and nuclear. We also need to shift how we use energy, from electric vehicles (EVs) and batteries to heat pumps and smart meters, to decarbonise the whole economy. When we consider this full suite of clean technology, it becomes clear how far the UK is from global leadership.

The UK has less low-carbon generation capacity per person than our key competitors in the developed world, including the US, Japan and the European Union. At 1.8 kW per person, Germany (with its solar and onshore wind) and France (with its vast nuclear fleet) have twice the UK’s 0.9 kW/person of low-carbon generation.

Fig 1: Per capita installed renewable electricity generation capacity in 2022 (kW per capita)   
Source: Oxford Economics

It’s not just in low-carbon generation we are further behind than we think. In 2022, Germans bought twice as many EVs as Brits, and Germany produces €650mn worth of batteries a year, against the UK’s €20mn. More concerningly, the UK is starting the race with a distinct handicap in the decarbonisation of heating. Our old, drafty houses leak more heat than anywhere else in Western Europe, making the push to electrify our heating much harder than for our European neighbours.

Even if we ignore how the UK is doing today, there are growing concerns that our plans for the future simply don’t go far enough. This is where comparisons between the UK and other countries become the least flattering. Of the largest economies in the world, the UK is due to have the slowest growth in low-carbon electricity generation, at just 2.9% per year to 2030, compared to 6.4% in the US and an incredible 10.6% in India.

Fig 2: Forecasts of average annual growth in low-carbon electricity output, 2023–2030   
Source: Oxford Economics

The UK is starting the race with a distinct handicap in the decarbonisation of heating – our old, drafty houses leak more heat than anywhere else in Western Europe, making the push to electrify much harder than our European neighbours.

Projected growth is ‘anaemic’    
To understand why growth in the UK is set to be so anaemic, we need to understand that the next stage of the energy transition is fundamentally different in the challenges it brings. To date, the UK’s priority has been to establish new technologies and ramp them up in scale and sophistication to drive down the price to compete with unabated fossil fuels. In this, we have seen stunning progress: in the 10 years to 2019, the cost of solar fell by 89% and the cost of onshore wind fell by 70%. The UK offshore wind programme we keep coming back to is a textbook example of how government support to scale up technology drives down the price.

Although there are some technologies that are still in their infancy (such as carbon capture, use and storage (CCUS), hydrogen and industrial electrification), for key areas such as renewable power and EVs we now have the tools we need to make the energy transition happen. That makes today’s challenge one of deployment – building low-carbon generation and other clean technology at a scale we haven’t seen before.

The only way that is going to happen is by unlocking private sector investment. It will take £1.4tn of investment for the UK to reach net zero, and 70% has to come from outside the government.

Unlocking that private sector investment is now the greatest hurdle the UK faces in its energy transition. Led by the US and European Union, governments around the world are putting their money where their mouth is, and providing incentives worth hundreds of billions of dollars that will unlock trillions of dollars of investment. We expect a response from the UK Chancellor at the Autumn Budget but, given the fiscally constrained position the UK finds itself in, any movement now risks being too little too late.

Although the recent increase in the CfD fifth allocation round is welcome, it will be nowhere near enough to reach our ambitions and the last-minute nature of the intervention will do little to inspire confidence in the sector. Some would argue that the UK does not need to worry about the incentives on offer for clean development elsewhere, because those countries are simply attempting to catch us up. When we look around, we can see that this is simply not true.

If the British exceptionalism of ‘world-beating’ boasts is one disease infecting our politics, the other is thinking we are so hopelessly lost and useless that there is little point in trying. Both strains of thought are dangerous.

On the one hand, we risk being lulled into a sense of false complacency as the rest of the world tears past us in what is increasingly shaping up to be a global race. Success in the first two decades of the 21st century will play only the smallest part in our decarbonisation goals for the middle of it. On the other, recognising the strengths the UK has and embracing them is the only way of securing our energy future.

The UK has a stable regulatory environment and deep and globally connected capital markets – releasing that private capital is the best way of getting the investment we need. The UK has historic strengths in sectors such as nuclear, automotive and oil and gas as well as a highly skilled workforce and some of the best universities in the world. We are ideally placed to be a test bed of the next wave of clean technologies including small modular reactors, CCUS, tidal and flexible energy retail products.

The importance of getting this right cannot be understated. In addition to the obvious need to tackle the climate crisis, unlocking investment in clean technologies is vital for the economic future of all countries, including the UK. The UK renewable energy economy already employs 247,000 people in the country, with a turnover of £54bn. By 2030, we could add an additional 725,000 jobs, with a clean economy worth £1tn.

Look forward, not backwards    
The British government – and the country as a whole – must face difficult decisions and respond to the world as it is, rather than how we would like it to be. We need to set our direction of travel by looking forward, not in the rear-view mirror.

It is not too late for the UK to set itself on a path to being a true global leader in the energy transition, but that will only be possible if we take bold action that recognises our shortcomings and embraces our strengths.