Economic Report 2020

ECONOMIC REPORT 2020

their climate goals will require an additional €350 billion of energy investment within Europe over the next decade compared to the previous one. 14 In the UK context, over the last decade, almost £220 billion of capital has been invested in the UK energy system. This investment spans hydrocarbon production and refining, gas distribution and electricity generation and associated networks, with around half committed to the oil and gas sector. However, annual energy investments as a proportion of GDP have fallen to less than 1 per cent in recent years. To help achieve net zero whilst maintaining a secure and affordable energy supply,

investment across a diverse range of energy sources will need to continue to expand in the decades to come. The Climate Change Committee estimates that annual net zero investments may need to grow to the equivalent of 2 per cent of GDP, or up to £50 billion per annum until 2050. The correct commercial and regulatory frameworks must be in place to enable this scale of investment at a national and global level. Companies need long- term certainty of the conditions upon which they can make robust investment decisions. Companies are also adapting their strategies in line with increasing

UK Energy Investment

Oil & Gas Extraction Electricity Gas Distribution Coal & Refined Petroleum Products Energy Investment Vs GDP

30

1.8

1.6

25

1.4

20

1.2

1.0

15

0.8

10

0.6

0.4

5

0.2

Energy Sector Capital Investment as a Percentage of GDP

0

0

Energy Sector Capital Investment (£billion - 2019 Money)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: BEIS, ONS

14 https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_1598

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