Too busy debating fossil fuels to notice renewables can save us trillions?

Nov 9, 2022
Naturesave
News

The war in Ukraine. The energy crisis. Rampant inflation. Political instability. Yet another COP summit…

The chaos we currently face may not inspire you to have a positive outlook. But there is some real hope. It’s now clear that decarbonising our energy system and switching fully to renewables is not only possible, but is also expected to save the global economy around £10.7 trillion ($12 trillion).¹

Doesn’t the UK already lead the way in emissions reductions?

The UK Government has led the way by setting out its Net Zero Strategy, which is one of the most ambitious emissions reductions targets in the world. Unfortunately, the reality of reaching those targets is proving more difficult. The UK initially led the way in cutting emissions, primarily due to closing down old coal fired power stations and sending much of our manufacturing overseas. Since those achievements, emissions reductions in most sectors have been lacking. It’s also unfortunate that these targets fall short of what the science tells us is necessary to limit warming to 1.5 degrees². One of the reasons for this is that our targets do not include the emissions that we import. This is a particular issue for the UK, as it is the largest net importer of CO2 emissions per capita in the G7³. The final issue is that our targets also include the existence of as yet unproven emissions removal technologies such as Carbon Capture and Storage.

Renewables are great but don’t we still need oil and gas?

Oil and gas will remain part of the energy mix for some time. The pressing issue is whether we exploit new reserves. From a climate perspective fossil fuel expansion is wholly unsustainable, as it would remove any chance we have of staying within the carbon budget. If we are serious about reaching net zero by 2050, we need to reach certain milestones along the way. This is reflected by the fact the UK government pledged to reduce emissions by 78% by 2035⁴. This effectively means that rapid cuts need to commence now, not years down the road.

This is why the decision to approve new oil and gas drilling licenses in the North Sea is so contentious. It is also contrary to advice from the International Energy Agency (IEA) which warned that governments and corporations needed to stop investing in new fossil fuels – immediately. In practical terms, there also appears to be little evidence that this additional supply will have any impact of energy prices as any oil or gas extracted will be sold on the international markets. It is also worth noting that these projects can take many years to get off the ground, which won’t help impact the current issues with energy prices.

The good news is… it does not have to be like this.

Not only possible, but profitable

While the environmentalists have been warning of our reliance on oil and gas for years, there has always been a view that we cannot move too quickly, as it would be too costly and renewables are just not up to the job. Fortunately for all of us, in the past five years an influx of scientific studies has now made it clear that the idea that of going green is not only possible, but it will save us trillions⁵.

Economic benefits

It is interesting to note that moving to 100% renewable energy was explored and discussed in the mid-1970s when we were in the middle of an energy crisis and the cost of oil was at an all-time high. Sounds familiar?
Today UK energy bills for an average-sized house have risen by 80%⁶. Before the UK government’s support scheme was put in place, energy bills were set to average at £3,549 per year⁷.

UK offshore wind power is now an incredible 9 times cheaper than electricity generated from gas. The renewable energy projects (most of which will use wind power) will generate electricity costing on average £48 per megawatt hour (MWh) compared to the cost of gas-fired power stations which cost £446/MWh to run. These projects will start within the next five years⁸.

Geopolitical benefits

Renewable sources of energy such as solar, wind and hydropower are constantly available and boundless. Supply is diversified and ‘spread out’ which greatly improves energy security, compared to centralised power plants which are an energy security risk. In addition, with renewables there is no need to transport raw materials from extraction source to power plants, as they generate clean power at the same location as the inputs (sun and wind) are collected.

Can it be done?

The good news is – yes! According to the Fossil Fuel Exit Strategy, the twin challenge of phasing out fossil fuels and building up our renewable energy capacity is possible using established technologies that already exist. Critically, researchers found that every continent on the planet has enough renewable energy potential to provide renewable energy access to its population. In fact, the report notes that solar and wind energy could potentially power the world more than 50 times over⁹.

What is Naturesave’s role?

Underwriter influence

Naturesave’s overriding aim is to create more awareness of the link between the insurance industry and climate change. We hope this will help drive change, especially in relation to the impact insurance has on enabling new fossil fuel production. We believe that growing public awareness will accelerate change across the industry.

The same arguments apply to the insurance industry’s investments in fossil fuels which are second only to the pension sector. Through our Campaign for Insurance Divestment, Naturesave have campaigned for insurers to take further, and more rapid action to decarbonise their investments. We have also called for a red line for insurers, when it comes to providing insurance for new fossil fuels projects.

Reducing our impact

Naturesave have pledged to plant a tree for every insurance policy we issue. The trees are planted in the Scottish Highlands as part of a reforestation programme coordinated by the charity Trees for Life and funded by our charity, The Naturesave Trust. Read more about our “Buy One Get One Tree” policy.

Renewable energy insurance

In addition to home and business insurance, we are a market leader in providing specialist insurance cover for renewable energy projects. We cover hydro, wind turbine and solar energy.

We also offer some of the most comprehensive cover for domestic renewable energy systems on the market.

Our long history of providing cover for new and innovative technology, driven by a genuine belief in supporting the urgent transition to renewable energy means we’re experts in this field. With Naturesave you could reduce your carbon footprint and save money.