牛津经济研究院-为未来提供资金-全球背景下的英国能源转型（英文原版）.pdf

The UK’s energy transition in a global context Part of The Clean Growth Gap – a series of reports and economic analysis from Energy UK, supported by Oxford Economics Funding the FutureFunding the Future: The UK’s energy transition in a global context 2 Executive Summary: The UK’s Energy Transition in a Global Context Net Zero presents knotty challenges of global collaboration and competition. This is especially true in our world of globally connected finances, where investment flows across borders to where it can be put to best use. These flows are shaped by the decisions of governments around the world, and if we are to understand how to attract investment to the UK, we must first appreciate how the UK compares to other countries. “Funding the Future” - the second in Energy UK’s “The Clean Growth Gap” series - sets out what governments around the world have done to attract investment in their clean economies and what this means for the UK as it considers its next steps in the energy transition. Investment is key to the energy transition Investment is the way the world will fund the transition to a Net Zero economy and in turn shape all our futures. The UK’s energy security, future prosperity and the potential to achieve our climate goals are all reliant on the ability to attract investment. Around the world, this investment mostly comes from the private sector (60% in 2022 according to The International Energy Agency (IEA) 1 ), but government action and strong policy support is vital to unlocking it. The world is investing China dominates global activity, boasting nearly half of the world’s clean technology investments in 2022. Its $546 billion spend in low carbon technologies was over three times the spend of the European Union which totalled $180 billion in 2022 (Fig. 1). The United States came in third, with $141 billion invested. Governments have made significant, long term financial commitments There has been a recent flurry in new, large scale investment incentive regimes. The $369 billion Inflation Reduction Act in the United States and the European Union’s REPower EU initiative (€270 billion) and Recovery and Resilience Fund (€250 billion) are by far the largest. Multi-billion dollar incentives in other key markets including Japan, China and India make the competition for clean investments even more intense. China dominates global activity, boasting nearly half of the world’s clean technology investments in 2022. There has been a recent flurry in new, large scale investment incentive regimes.3 Funding the Future: The UK’s energy transition in a global context This is already having an impact Even though these schemes are very new, signs of a surge in activity are emerging. Bloomberg NEF has found that since the introduction of the IRA, automotive and battery sectors have announced 20 times more funds for new factories than in 2021 2 . Equity price data suggests that markets viewed the passage of the IRA as being something that would notably boost US clean technology companies’ future profits. These shifts have major implications for the UK The UK has significant strengths as it faces the challenges of decarbonisation. These include our world-leading universities and financial services, and our early success in offshore wind and established industries (such as in the digital and oil and gas sectors) that can support clean growth. However, the UK ranks 30th out of 38 OECD nations on the average proportion of capital investments businesses are able to recover 3 and is yet to see new investment incentive regimes that can meet the scale of global competition. The rest of The Clean Growth Gap series will explore in more detail the importance of clean investment for the UK and how the Government can take action to address it. Fig. 1: Energy transition investment, 2022 ($, billion) India 17 Germany 55 US 141 Japan 23 China 546 European Union 180 Italy 16 France 29 UK 28 Source: Bloomberg NEF; Oxford Economics Since the passage of the IRA, automotive and battery sectors have announced 20 times more funds for new factories than in 2021. 2 The UK is yet to see new investment incentive regimes that can meet the scale of global competition.Funding the Future: The UK’s energy transition in a global context 4 Fig. 2: Technologies eligible for Investment and Production Tax Credits Eligible for ITC or PTC Eligible for ITC Eligible for PTC Technology Specific Tax Credits • Solar • Wind • Tidal • Municipal solid waste • Geothermal • Energy storage technologies • Microgrid controllers • Fuel cells • Geothermal (heat pump and direct use) • Combined heat Oxford Economics 3% 10% 11% 21% 55% Corporate Tax Incentives Grants Consumer Tax Incentives Loans Federal OperationsFunding the Future: The UK’s energy transition in a global context 6 European Union: a changing tune from Brussels Green Deal Industrial Plan Largely in response to the US IRA, in February 2023 the European Commission unveiled a ‘Green Deal Industrial Plan’. This is based on four pillars: a predictable regulatory environment, enhancing skills, open trade and access to funding. The funding predominately consists of previously announced measures, e.g., €250 billion of the Recovery and Resilience Fund for the green transition fund, and €270 billion through REPower EU (detailed below). 7 Moreover, there are also funds available through other programmes such as Horizon Europe, Invest EU or the Innovation Fund. Although this total funding exceeds that of the US IRA’s, these programs and funds have a wider scope than the green transition making it hard to compare the generosity of the two regimes. Compared to the US IRA however, a lower level of funds will be directed towards incentivising private investment in low carbon energy. Removing Red Tape The Net-Zero Industry Act is an initiative stemming from the Green Deal Industrial Plan which aims to scale up the manufacturing of clean technologies. A central pillar within this is the simplification of the administrative and permit-granting processes for investment in Net Zero technologies. Permits must be assessed within 12 months for projects with a capacity of under 1GW, and within 18 months for those above. Priority will be given to ‘strategic projects’, i.e. investments, which could boost EU supply chain competitiveness or reduce over- dependence on single countries for imports. Relaxation of State Aid Rules The only new measure in the Green Industrial Plan regarding funding is the ‘Temporary Crisis and Transition Framework’ (TCTF) which relaxes State aid 8 rules until end-2025. However, funding for this must come from individual EU member states, rather than the EU itself. With the TCTF, EU member states may grant aid for investments relating to the Net Zero economy (e.g. batteries, solar panels, wind turbines, heat pumps, electrolysers, CCUS, key components and critical raw materials to produce such equipment). The following aid is now allowed: • “Anti-relocation” aid worth up to 15% of the firm’s investment costs, with a cap of €150 million. 9 • In certain instances, “Matching” aid on an individual basis to “match” a subsidy available for an equivalent investment outside the European Economic Area (EEA). 10 To qualify some investment must be located in an EEA assisted area (i.e., an economically deprived area). For both types of aid, the investment must last at least five years (three years if an SME) and the aid must be granted by the end of 2025. Companies must demonstrate that the investment would not take place in the EEA without the aid. 11 REPower EU Launched in May 2022, the REPower EU Plan is aimed at rapidly decreasing the European Union’s dependency on Russian fossil fuels following the invasion of Ukraine. The Plan will involve an investment of approximately €300 billion. The majority of this funding (95%) will go into speeding up and scaling up the clean technology transition. 12 To support this, €225 billion in loans have been made available through the previously announced Recovery and Resilience Facility (RRF). Furthermore, additional grants of €72 billion will be made available to finance investments and reforms, some of which will come from the Innovation Fund and frontloading Emission Trading Scheme (ETS) allowances. China: a centrally planned transition In 2022, China spent $546 billion on clean technology investment, the largest expenditure in the world. In June 2023, China unveiled a $72.3 billion package of tax breaks over four years for EVs and other green cars. 13 The purchase tax amounts to as much as $4,170 per vehicle. 7 Funding the Future: The UK’s energy transition in a global context Joint ventures between public and private investments (often occurring as a result government mandates) have also helped to increase investment. For example, in May 2020, China Energy signed a cooperation agreement with Donghu Development Zone and Wuhan ITRI of Geo-resources and Environment Co. to establish a hydrogen industry fund in Donghu with a budget of $146 million for the first phase. 14 The Chinese government has announced that it aims to have 1 million hydrogen-powered cars on its roads by 2030, served by 1,000 refuelling stations. 15 The city of Beijing plans to offer a subsidy of as much as $741,405 for each new hydrogen power charging station which meets certain requirements. It has also promised subsidies to facilities that generate and store hydrogen power. 16 China’s centralised model of government also means that any targets that the country sets are likely to be a particularly powerful signal for investors. The latest 5-year plan (2021-2025) indicated that the state will be accelerating the development of non-fossil fuel energy and increasing its proportion of total energy consumption to about 20%. 17 Japan: catching up at pace In 2021, Japan announced its $18 billion ten-year Green Innovation Fund. Over the next 10 years, the government aims to realise $1 trillion in public-private investment to finance Japan’s green transition. 18 In order to realise these levels of investment the government plans to raise $144 billion through issuing sovereign bonds. The initial plan for the funds raised from the bonds is to target technologies that are still in development such as ammonia, hydrogen, CCS/ CCUS etc. where private sector engagement is yet to be substantial. In 2021, Japanese tax reform introduced tax incentives for products that accelerate decarbonisation. Projects where the investment does not exceed $500 million and that pass other eligibility requirements can receive a 5% to 10% tax credit or 50% special depreciation. 19 India: a new competitor In 2023, the Indian government promised to make $4.3 billion in investments towards the country’s energy transition. 20 Initiatives include: • $1 billion of central government money in electricity transmission lines which can transport 13GW of solar energy from the Himalayas to more populated regions. • The National Green Hydrogen Mission which has a total financial outlay of $2.4 billion. Electrolyser manufacturing incentives have been allocated $540 million whilst green hydrogen production incentives have been allocated $1.6 billion. 21 The programmes are scheduled to be implemented between financial year (FY) 2025-26 and FY 2029-30. • $455 million in viability gap funding for battery storage companies. This scheme is designed to cover risks that projects won’t turn out to be economically viable. 22 How do these different schemes compare? Tax credits such as those provided by the US IRA tend to be quicker to disperse and are less cumbersome for firms than a subsidy-based scheme such as the EU provides. The administrative burden associated with subsidies means that large, established companies are more likely to apply, rather than smaller start- up companies which are often more innovative. 23 Moreover, compared to EU subsidies (and India and Japan’s incentives), US IRA funding is less technologically selective which creates more room for new technology to develop. However, many of the incentives provided by the US IRA are conditional on local content requirements. For example, all steel that is used in a structural function must be mined, produced or manufactured in the US. This can push up costs of projects and can undermine the price-reducing effects of the subsidy.