As Prime Minister David Cameron reflects on a fruitful trade visit to China, a warning has come that the UK is not in the same league as the Chinese on energy investment.
Speaking at the World Energy Outlook conference yesterday, the executive director of the International Energy Agency, Nobou Tanaka, conveyed the message loud and clear; when it comes to investment, “the UK cannot compete with China by itself”.
Fatih Birol, chief economist of IEA, reiterated that “almost all of the growth comes from China and the rest of the emerging countries. China is the single most important contributor to the global energy demand.”
The IEA predicts that China’s energy policies will evolve rapidly as the country develops new technology and makes it cheaper and more effective for global distribution.
Mr Tanaka believes the way forward for Britain is to work together with European countries by developing the much talked about supergrid. “Connecting electricity grid lines or gas pipe lines between the neighbouring countries will enlarge the energy market and can use more of the renewable energy sources.”
That said, the UK government predicts that £200bn needs to be invested in green technologies and infrastructure. Attracting that investment will be difficult in this time of economic constraint, said Mr Tanaka. “It will be mostly private sector money, so the government must provide very stable and tough policy otherwise the private sector cannot invest.”
Mr Tanaka stressed the importance of investment if the UK is to meet its CO2 emissions targets, but he praised the coalition’s efforts so far. “The UK is contributing to the future of sustainability by investing in a difficult fiscal situation and that is an important model.”
The short-term target for world leaders is to meet the targets of the Copenhagen Accord Agreement among the G20 countries to phase out subsidies. Even if these targets are met, more aggressive measures to reduce emissions must be put in place. Mr Tanaka urged the seven countries involved that “quick action is what we want to see happen, because if we wait for the targets set up by the countries in the global deal, we may simply lose the opportunity.”
Mr Birol said some of the targets were “vague” and Mr Tanaka stated that “these moves still fall a long way short of what is required to set us on a path to a truly sustainable energy system”.
UK Energy Secretary Chris Huhne said of the IEA conference: “The Copenhagen commitments would soften predicted oil price increases, but the IEA still thinks prices could be some 40% higher by 2035. The age of cheap energy is over.”
He added: “We need to go further and faster in getting ourselves off the oil hook – and on to clean green growth. Greater energy independence – with more renewables, clean coal and nuclear – is the best way to protect our consumers and our country from energy shocks to come.”
Weaning UK consumers off fossil fuels will take time, but according to IEA’s report the UK must take action and invest sooner rather than later if the economy is to benefit from advances in renewable and eco-technology. Mr Tanaka’s final message was simple and clear: “Just don’t wait for the global climate to heal – act now in the actions that we can do. That is our strong recommendation.”