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1、The UKs energy transition in a global contextPart of The Clean Growth Gap a series of reports and economic analysis from Energy UK,supported by Oxford EconomicsFunding the FutureFunding the Future:The UKs energy transition in a global context2Executive Summary:The UKs Energy Transition in a Global C
2、ontextNet 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 i
3、f 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 UKs“The Clean Growth Gap”series-sets out what governments around the world have done to attract investment in their clean economies and
4、 what this means for the UK as it considers its next steps in the energy transition.Investment is key to the energy transitionInvestment is the way the world will fund the transition to a Net Zero economy and in turn shape all our futures.The UKs energy security,future prosperity and the potential t
5、o 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
6、investingChina dominates global activity,boasting nearly half of the worlds 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 bi
7、llion invested.Governments have made significant,long term financial commitments There has been a recent flurry in new,large scale investment incentive regimes.The$369 billion Inflation Reduction Act in the United States and the European Unions REPower EU initiative(270 billion)and Recovery and Resi
8、lience Fund(250 billion)are by far the largest.Multi-billion dollar incentives in other key markets including Japan,China and India make the competition for clean investments even more intense.China dominates global activity,boasting nearly half of the worlds clean technology investments in 2022.The
9、re has been a recent flurry in new,large scale investment incentive regimes.3Funding the Future:The UKs energy transition in a global contextThis is already having an impactEven though these schemes are very new,signs of a surge in activity are emerging.Bloomberg NEF has found that since the introdu
10、ction of the IRA,automotive and battery sectors have announced 20 times more funds for new factories than in 20212.Equity price data suggests that markets viewed the passage of the IRA as being something that would notably boost US clean technology companies future profits.These shifts have major im
11、plications for the UKThe UK has significant strengths as it faces the challenges of decarbonisation.These include our world-leading universities and financial services,and our early success in offshore wind and established industries(such as in the digital and oil and gas sectors)that can support cl
12、ean growth.However,the UK ranks 30th out of 38 OECD nations on the average proportion of capital investments businesses are able to recover3 and is yet to see new investment incentive regimes that can meet the scale of global competition.The rest of The Clean Growth Gap series will explore in more d
13、etail the importance of clean investment for the UK and how the Government can take action to address it.Fig.1:Energy transition investment,2022($,billion)India 17Germany 55US 141Japan 23China 546European Union 180Italy 16France 29UK 28Source:Bloomberg NEF;Oxford EconomicsSince the passage of the IR
14、A,automotive and battery sectors have announced 20 times more funds for new factories than in 2021.2The UK is yet to see new investment incentive regimes that can meet the scale of global competition.Funding the Future:The UKs energy transition in a global context4Fig.2:Technologies eligible for Inv
15、estment and Production Tax CreditsEligible for ITC or PTCEligible for ITCEligible for PTCTechnology 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&power Microturbine
16、s Interconnection costs Biomass Landfill gas Hydroelectric Marine and hydrokinetic Clean Hydrogen (intensity of less than 0.45 kg CO2e/kg H2)NuclearHow investment incentive regimes vary around the worldGovernments in major economies(US,EU,China,Japan and India)are undertaking significant programmes
17、to attract private sector investment into their clean technology sectors.It is vital to understand what is going on in the world around us to appreciate how the UK compares.United States:America leading the wayThe US Inflation Reduction Act(IRA)was introduced in August 2022,and most provisions becam
18、e effective from 1st January 2023.4 The IRA has a total budget of$369 billion for the period 2023 to 2031 with the majority of the funding($216 billion)in the form of tax credits for corporations.These are designed to catalyse private investment in clean technology,transport,and manufacturing.Howeve
19、r,these figures are only budgets and actual sums spent may be larger or smaller depending on the extent to which various tax credits are used.The IRA uses a range of incentives to encourage private sector investment,including loans and grants,as well as tax credits.Corporate Tax CreditsCorporate Tax
20、 Credits make up the majority(59%)of total IRA funding.Investment Tax Credits(ITC)and Production Tax Credits(PTC)allow businesses to deduct a percentage of the cost of low-carbon energy systems from their federal tax bill.5 Renewable energy projects are eligible for either the ITC or PTC,but not bot
21、h(Fig.2).Various labour requirements need to be met in order to qualify for tax credits and bonus credits of an additional 10%are available for i)projects that meet domestic content requirements and ii)are located in deprived communities or brownfield sites.The IRA has a total budget of$369billion f
22、or the period 2023 to 2031 with the majority of the funding($216 billion)in the form of tax credits for corporations.5Funding the Future:The UKs energy transition in a global contextInvestment Tax Credit:30%tax credit relief(from 2025 the rate is 6%for projects over 1MW).Production Tax Credit:6 Rene
23、wable technologies that began after 2021 and before 2025 receive between 1.3 and 2.6 cents per kWh of zero carbon electricity produced.This amount may be adjusted annually for inflation.After 2025,projects will have to meet wage and apprenticeship requirements to receive this credit or will otherwis
24、e receive a credit of 0.5 cents per kWh.Clean Hydrogen Production Tax Credit:A tax credit of up to$3 per kg of hydrogen produced is available to projects with a lifecycle greenhouse gas emissions intensity of less than 0.45 CO2 kilograms per kilogram of hydrogen(kg CO2e/kg H2).The credit will be adj
25、usted for inflation.Prevailing wage and apprenticeship requirements need to be met in order to qualify for the full credit.Nuclear Production Tax Credit:Up to 1.5 cents per kWh for power produced at a qualifying nuclear facility.The credit will be adjusted for inflation.Prevailing wage requirements
26、need to be met in order to qualify for the full credit.Grants Grants make up 21%of total IRA spending(Fig.3).One third($27 billion)of grants will go towards the Greenhouse Gas Reduction Fund.This will be awarded on a competitive basis to individual clean technology projects as well as projects that
27、reduce greenhouse gas emissions.There will be an emphasis on projects that benefit low-income and disadvantaged communities.The rest of the grant money($55 billion)is being allocated by the federal government to projects that will be crucial to enabling Net Zero,including grants for the domestic pro
28、duction of electric vehicles(EVs),zero-emission home renovation and pollution reduction grants to air pollution agencies and local governments.LoansLoans make up$40 billion(11%)of total IRA spending.Technologies eligible for the loans include renewable energy projects,carbon capture,nuclear energy,c
29、ritical minerals processing,manufacturing,and recycling.Fig.3:Energy and climate change funding in the Inflation Reduction ActSource:McKinsey;Oxford Economics3%10%11%21%55%Corporate Tax IncentivesGrantsConsumer Tax IncentivesLoansFederal OperationsFunding the Future:The UKs energy transition in a gl
30、obal context6European Union:a changing tune from Brussels Green Deal Industrial PlanLargely 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 acce
31、ss 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 E
32、urope,Invest EU or the Innovation Fund.Although this total funding exceeds that of the US IRAs,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 towa
33、rds 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
34、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 competitivenes
35、s 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 aid8 rules until end-2025.However,funding for this must come from in
36、dividual 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
37、aid is now allowed:“Anti-relocation”aid worth up to 15%of the firms 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 m
38、ust 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 th
39、e aid.11REPower EULaunched in May 2022,the REPower EU Plan is aimed at rapidly decreasing the European Unions 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 u
40、p 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
41、 will come from the Innovation Fund and frontloading Emission Trading Scheme(ETS)allowances.China:a centrally planned transitionIn 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 fo
42、ur years for EVs and other green cars.13 The purchase tax amounts to as much as$4,170 per vehicle.7Funding the Future:The UKs energy transition in a global contextJoint ventures between public and private investments(often occurring as a result government mandates)have also helped to increase invest
43、ment.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.14The Chinese government has announced that it aim
44、s 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 gen
45、erate and store hydrogen power.16Chinas 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 en
46、ergy and increasing its proportion of total energy consumption to about 20%.17Japan:catching up at paceIn 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 Japans green transitio
47、n.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 engage
48、ment 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.19India:
49、a new competitor In 2023,the Indian government promised to make$4.3 billion in investments towards the countrys 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 popula
50、ted 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 betwee
51、n 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 wont turn out to be economically viable.22How do these different schemes compare?Tax credits such as those provided by the US IRA tend t
52、o 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
53、 Moreover,compared to EU subsidies(and India and Japans 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
54、 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.Funding the Future:The UKs energy transition in a global context8Early indicators show that incentives are having an impactMa
55、ny countries around the world have legally binding Net Zero targets and know that increasing their clean technology supplies will be crucial to meeting these.Most will want to attract private sector funding to pay for the cost of the investment.The private sector will is there,companies are looking
56、to invest in clean technology projects as they know returns will be delivered in the long-term.So,it becomes a matter of where these companies choose to invest.If governments are successful in attracting this private investment,this will increase the rate at which they can develop their own green in
57、dustries and achieve Net Zero.To the extent that they cause capital to leave other jurisdictions,these incentives will hinder the development of other countries(such as the UKs)clean technology industries.Furthermore,by decreasing the cost of producing clean technologies,incentives can further under
58、mine the development of other countries clean technology industries.Therefore,it is important to investigate the preliminary evidence on whether the schemes are successful in attracting private sector investment.Our analysis focusses on the impact of the IRA on boosting investment in clean technolog
59、y in the US.We have selected this example because it was one of the first,and because of its size.It should be stressed that given the Act only came into operation in January,it is too early to have a definitive answer about the impact of the IRA-however the following early indicators suggest that i
60、t is associated with a significant expansion of clean investment in the US.In April of this year,Bloomberg NEF announced that since the passage of the IRA,automotive and battery sectors have announced$52 billion in planned new factories(Fig.4).It estimates this is more than 20 times the amount annou
61、nced in 2021.24The following three data sources have been selected because of their timeliness:1.The first is a keyword search of global media mentions of new low carbon technology sites in the US.(Technologies include solar,batteries,EVs,nuclear and offshore and onshore wind.)These have nearly doub
62、led since the act has come into presence.25 Average monthly media mentions for new clean technology sites/plants in the U.S were 4,400 between January 2020 and July 2022;monthly mentions rose to 9,700 between August 2022 and June 2023.2.The second is monthly data on manufacturers shipments of power
63、transmission equipment and batteries(Fig.5,on page 9).The uptick in shipments,particularly evident in batteries,may be indicative of the US IRA facilitating a boost in production through an increase in investment.However,its not possible to draw strong conclusions here as other factors such as the p
64、ost pandemic recovery and the easing of supply chain bottlenecks could also be at play.Fig.4:Announced US electric vehicle and battery manufacturing investments since the passage of the Inflation Reduction ActOct 22Dec 22Feb 23Mar 23Source:Oxford Economics;Bloomberg NEF$13 bn$28 bn$35 bn$52 bn9Fundi
65、ng the Future:The UKs energy transition in a global context3.The third is an analysis of share-price data for companies specialised in low carbon technologies based in the US.As well as reflecting a companys current performance,share prices also reflect how profitable investors believe the company w
66、ill be in the future.Therefore,they are a good indicator of the impact of the US IRA on investment in low carbon technologies.For the purposes of this analysis,clean US technology companies listed on the NASDAQ or New York Stock Exchange were selected.26 Figure 6,below,shows the average daily change
67、 in equity price of these clean technology producers on key announcement days for the Inflation Reduction Act.For the three key dates shown below,all three clean technologies reported higher daily changes in equity price than the average of the NASDAQ and NYSE Indices.This finding is consistent with
68、 a Brookings analysis which found that on these announcement dates clean energy Exchange Traded Funds had a positive excess return relative to the S&P 500.27 All else being equal,this evidence indicates that markets viewed the passage of the IRA as being something that would significantly boost clea
69、n technology companys future profits.28Fig.5:Manufacturers shipments of generators and turbines,and batteries in the United States(Index January 2015=100)Source:Census Bureau;Oxford Economics0060Turbines,generators&other power transmission equipmentBatteries0181716Fi
70、g.6:Daily change in equity prices,US clean energy companies against NASDAQ/NYSE average2.9%1.7%3.5%1.5%4.6%4.2%3.1%3.5%3.7%3.4%4.3%Source:Oxford Economics;Bloomberg NEFAverage NASDAQ and NYSEAnnouncement of agreement of IRA,27th July 2022Senate passage of IRA,7th August 2022House Passage of IRA,12th
71、 August 2022Hydrogen producersEV producersBattery producers-0.1%Funding the Future:The UKs energy transition in a global context10How does the UK compare?To date,the UK has enjoyed a position of leadership in clean technology,thanks largely to the support of successive governments.However,in an incr
72、easingly competitive global environment for business investment in clean technology,alongside an urgent focus on accelerating efforts to enable Net Zero,understanding the strength of the UKs clean technology industry is crucial.Of the worlds largest eight economies,the UK currently produces the seco
73、nd highest share of low carbon electricity output behind France(Fig.8).In 2023,66%of British electricity output is forecast to be low carbon.The UK has an expertise in low carbon technologies that is different from the worlds other largest economies(Fig.9).Relative to other countries,the UK has the
74、highest specialisation in both offshore wind and biofuels.In 2022,the UK was home to 22%of the worlds total installed offshore wind capacity(Fig.9).Although the UK is still very much a dominant player in this area,its global share has more than halved since 2012,when the UK had 56%of the worlds tota
75、l installed offshore wind capacity(Fig.10).This is the result of other countries not least of all China rapidly increasing their offshore capacity,illustrating the need for the UK sector to continually strive to not be left behind.Fig.7:Key strengths of the UK clean energy industryTransferable exper
76、tise from established industries:The UKs well established oil and gas sector means it is well placed to become a leader in carbon capture usage and storage technologies(CCUS)and floating offshore wind as there is considerable potential for transfer of expertise between these sectors.Substantial expe
77、rtise in fixed bottom offshore wind also contributes to the UK being well placed to become a world leader in floating offshore wind technologies.World leading universities:Drive innovation and a highly skilled workforce.Offshore capabilities:Being an island nation means the UK has been able to posit
78、ion itself as one of the leaders in offshore wind.The UKs natural resources also mean it is well placed to become a world leader in tidal technologies.Financial services:The UKs expertise in financial services means it has positioned itself as a leader in green finance with London ranking first in t
79、he Global Green Finance Index.Digital:UK digital capabilities means it has potential to become a leader in smart grids.The UK currently produces the second highest share of low carbon electricity output behind France).In 2023,66%of British electricity output is forecast to be low carbon.11Funding th
80、e Future:The UKs energy transition in a global contextFig.8:Estimated low carbon electricity output,share of total(2023)Fig.9:Make up of different countries installed low carbon energy capacity,2022(%)Source:Oxford EconomicsSource:Oxford EconomicsFrance92%US43%Germany54%Japan35%UK66%China35%Italy46%
81、India27%SolarBio gas-liquid-solidsNuclearOtherHydroOnshore windOffshore windGermany42375365264UK24242311143France141716511China322833025111Japan54316233India372528US263216222Funding the Future:The UKs energy transition in a global context12The automotive sector is another area where the UK has relat
82、ive strengths,but these need to be capitalised on to make a success out of the transition.Of the worlds largest eight economies,the UK ranked fourth in 2022 for the number of electric and hybrid vehicles it produced per unit of population(Fig.11).Although these technologies are not necessarily an ob
83、vious UK strength,out of these eight economies the UK is the only economy to produce more electric and hybrid vehicles than traditional cars29(which rely solely on internal combustion engines).Given that the UK has had a relatively low car manufacturing base in which to switch production,the UK has
84、performed reasonably well in developing its EV and hybrid manufacturing base.As 8 out of 10 cars made in the UK are exported,this industry is an important export market for the UK.30 Moreover,there are some promising future developments in this area for the UK.In July 2023,after securing State aid f
85、rom the British government,Tata Group announced that it will build a$4 billion battery factory in the UK to supply Jaguar Land Rovers EVs.31Fig.10:UK installed offshore wind capacity vs UKs share in world offshore wind capacitySource:Oxford EconomicsSource:Oxford Economics;LMC Automotive14,00012,000
86、10,0008,0006,0004,0002,00004540353025200403020100Installed UK offshore wind capacity,MW(LHS)Internal combustion vehicleElectric vehicle and hybrid vehicleUKs share in offshore wind capacity,%(RHS)2012JapanFranceGermanyChinaUKUSItalyIndia2000022Fig.11:Inter
87、nal combustion engine vehicles and electric and hybrid vehicle production 20122022,vehicles per 1,000 population13Funding the Future:The UKs energy transition in a global contextAlthough the UK has made a good start on transitioning to a Net Zero economy,it risks falling behind other countries in ye
88、ars to come.Helped by generous incentive schemes,other economies have been increasing their clean technology capacity at a faster rate than the UK.Of the worlds largest eight economies,the UK is forecast to have the slowest growth in low carbon electricity generation between now and 2030(Fig.12).Low
89、 expected levels of investment in the UK are a significant factor behind this downbeat forecast.Although the UK has made a good start on transitioning to a Net Zero economy,it risks falling behind other countries in years to come.Fig.12:Forecasts of average annual growth in low carbon electricity ou
90、tput,20232030Source:Oxford EconomicsFranceUSGermanyJapanUKChinaItalyIndia10.6%7.2%6.4%6.0%5.2%3.2%3.1%2.9%Funding the Future:The UKs energy transition in a global context14What does this mean for the next stage of the energy transition?As a result of increasing incentives for clean technology invest
91、ment in other jurisdictions,future investment in UK clean technology is looking increasingly under threat.In contrast to ambitious incentive schemes being provided around the world,the level of UK ambition looks muted.For example,the UKs tax regime means that it does not provide globally competitive
92、 capital allowance rates.Excluding temporary full expensing,it ranks 30th out of 38 OECD nations on the average proportion of capital investments businesses are able to recover.32Although the UK has strengths in many low carbon technologies,the lack of incentives for investment means the UK risks fa
93、lling behind in the global race to decarbonise.A recent illustration of this is that in July of this year,Swedish utility company Vattenfall announced that it would halt the development of its British Norfolk Boreas offshore wind project.The company warned that Britain could struggle to meet its win
94、d targets without improved incentives for investment.33 The planned project had a capacity of 1,400MW which is 2.4%of the UKs current installed low carbon operating capacity.The UK must not rest on its laurels,otherwise more projects like this will either stop during development,or simply never be c
95、onceived.We have a great position to start from but must consider the global context in how we compare to other countries,when boardrooms around the world are deciding where to invest.The rest of the Clean Growth Gap series will consider what the UK can do to attract investment in the face of the st
96、iff global competition outlined in this report,and show how this investment has to be at the heart of the countrys future prosperity,supporting jobs,economic activity and communities across Britain.The UK ranks 30th out of 38 OECD nations on the average proportion of capital investments businesses a
97、re able to recover.Read the full series of reports here:https:/bit.ly/CleanGrowthGapThe CleanGrowthGap15Funding the Future:The UKs energy transition in a global contextEndnotes1.IEA,2022,“World Energy Investment 2022”,2022,accessed August 2023.2.Bloomberg NEF,“Energy transitions new industrial lands
98、cape”,5 April 2023.3.Excluding temporary full expensing which expires in April 2026.Tax Foundation,“Capital Cost Recovery Across the OECD,2022”,April 2023.4.United States Environmental Protection Agency“Summary of Inflation Reduction Act provisions related to renewable energy”,updated 1 June 2023,ac
99、cessed August 2023.5.United States Environmental Protection Agency“Summary of Inflation Reduction Act provisions related to renewable energy”,updated 1 June 2023,accessed August 2023.6.DSIRE,“Renewable Electricity Production Tax Credit”,updated 9th September 2022,Accessed August 2023.7.Allianz,“A Fa
100、ustian bargain:Europes answers to the US IRA”,07 February 2023.8.European Commission:“Within the EU a company that receives government support gains an advantage over its competitors.Therefore,the Treaty generally prohibits State aid unless it is justified by reasons of general economic development.
101、”9.Covington Competition,“The Commission adopts its TCTF”,March 2023.10.EEA countries include the EU plus Iceland,Liechtenstein and Norway.The EEA agreement brings these countries into the EUs internal market which means that the same state aid rules apply in these countries.11.UK in a Changing Euro
102、pe,“UK-EU regulatory divergence tracker:7th edition”,May 2023.12.European Commission,“How Repower is funded”,accessed August 202313.Reuters,“China unveils$72 billion tax break for EVs,other green cars to spur demand”,21 June 2023 14.Lynx,“Hydrogen energy”,December 2020.15.South China Morning Post,“C
103、hinas largest fuel-cell producer Sinofuelcell expects sales to double as government promotes hydrogen-powered vehicles”,25 May 2023.16.Caixin Global,“Chinese capital to subsidize charging stations for hydrogen-powered cars”,23 August 2023.17.CSET,“Outline of the Peoples Republic of China 14th five-y
104、ear plan for national economic and social development and long-range objectives for 2035”,13 May 2021.18.GR Japan,“Overview of Japans Green Transformation”,January 2023,accessed August 2023.19.EY,“Japans 2021 tax reform introduces tax incentives for carbon neutrality and digital transformation”,15 A
105、pril 2021.20.Climate Home News,“India announces$4.3 billion investment in clean energy”,1 February 2023.21.Mercom,“Ministry unveils 175 billion program for electrolyzers,green hydrogen production”,29 June 2023.22.Industry Outlook,“India To Offer$455 Million In Incentives For Battery Storage Projects
106、”,6 June 2023.23.The Economist,“What European business makes of the green-subsidy race”,14 February 2023.24.Bloomberg NEF,“Energy transitions new industrial landscape”,5 April 2023.25.Meltwater Press search.Search from Jan 2020 to July 2022,compared against August 2022 to June 2023.26.Companies were
107、 selected on the basis that i)a substantial part of their business was involved in the manufacture of clean technologies(i.e.,hydrogen,batteries and electric vehicles)ii)they had a manufacturing presence in the US.27.Brookings Papers,“Economic Implications of the Climate Provisions of the Inflation
108、Reduction Act”,March 2023.28.To note,this analysis is a simple comparison and no additional statistical methods have been incorporated to better identify whether the IRA had a causal impact on the equity prices of clean technology companies.If these announcements were already fully expected,the pric
109、e movements on the day may just be a coincidence,as the information would have been incorporated into the equity prices earlier.29.Production figures form LMC Automotive,a Global Data company.Alternative production figures may differ due to different definitions of EVs/hybrids/internal combustion en
110、gines.30.SMMT News UK Manufacturing,“UK car production down but electric vehicle output surges to new record”,26 Jan 2023,Accessed August 2023.31.Gov UK,“Tata Group to invest over 4 billion in UK gigafactory creating thousands of jobs”,19 July 2023.32.Tax Foundation,“Capital Cost Recovery Across the
111、 OECD,2022”,April 2023.33.Reuters,“Vattenfall halts project,warns UK offshore wind targets in doubt”,20 July 2023.Energy UK is the trade association for the energy industry with over 100 members-from established FTSE 100 companies right through to new,growing suppliers,generators and service provide
112、rs across energy,transport,heat and technology.Our members deliver nearly 80%of the UKs power generation and over 95%of the energy supply for 28 million UK homes as well as businesses.The sector invests 13 billion annually and delivers nearly 30 billion in gross value-on top of the nearly 100 billio
113、n in economic activity through its supply chain and interaction with other sectors.The energy industry is key to delivering growth and plans to invest 100 billion over the course of this decade in new energy sources.The energy sector supports 700,000 jobs in every corner of the country.Energy UK pla
114、ys a key role in ensuring we attract and retain a diverse workforce.In addition to our Young Energy Professionals Forum,we are a founding member of TIDE,an industry-wide taskforce to tackle Inclusion and Diversity across energy.Oxford Economics was founded in 1981 as a commercial venture with Oxford
115、 Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost independent global advisory firms,providing reports,forecasts and analytical tools on more than 200 countries,1
116、00 industries,and 8,000 cities and regions.Our best-in-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic,social and business impact.We employ 450 staff,including more than 300 professional econo
117、mists,industry experts,and business editorsone of the largest teams of macroeconomists and thought leadership specialists.Our global team is highly skilled in a full range of research techniques and thought leadership capabilities from econometric modelling,scenario framing,and economic impact analy
118、sis to market surveys,case studies,expert panels,and web analytics.Oxford Economics is a key adviser to corporate,financial and government decision-makers and thought leaders.Our worldwide client base now comprises over 2,000 international organisations,including leading multinational companies and
119、financial institutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.www.energy-uk.org.uk energyukcomms Energy UKTo discuss the findings of this report please contact mark.williamsenergy- OxfordEconomics oxford-economicsTo discuss the findings of this report please contact July 2023