The UK’s energy supply could require more than £900bn in capital expenditure to achieve net-zero by 2050, opening up a significant opportunity for public and private capital in enabling a successful transition, according to a new report published by NatWest and Boston Consulting Group (BCG).

Signalling the scale of investment needed, NatWest and BCG said that for the transition to be successful, it would be essential for banks and investors, regulators, policy makers, energy companies and supply chains to work together to overcome the challenges to mobilising this investment.

Several key market developments would be needed to enable the transition, including clear and decisive government policy, co-operation between banks and investors to address the challenges to scaling investment, and strong commitments from energy companies to put new technologies on the market.

Eriola Beetz, MD and partner in Boston Consulting Group, said: “To reach net-zero by 2050, the energy system must undergo a tectonic shift. Society has gone through energy transitions in the past — but nothing like this one. Changes are already underway with energy sources such as renewables, the accelerated expansion of electricity networks, and the scale up of new energy technologies, but we are just at the beginning of the journey.”

To derive a realistic estimate for the capital expenditure need per technology, BCG combined insight from internal models and experts and all prices have been rebased to 2023 levels. Capex is defined as costs at the time of financing in a given year and excludes cost of borrowing.

---