Posted on: 08/03/2016
Britain’s ability to meet its energy security and climate change objectives is under threat because investors are nervous about UK Government policy, MPs have warned.
Members of the Energy & Climate Change Committee have published a report that concludes that investor confidence has been “dented” by a series of sudden policy changes since the General Election.
MPs warned the nervousness among investors may lead to a hiatus in project development.
The report highlighted cuts to support for onshore wind and solar projects, the ending of the Green Deal energy efficiency programme and the scrapping of the carbon-capture and storage competition.
Angus MacNeil, Chair of the ECCC, said: “Since coming to office in May, the UK Government has made a number of sudden and unexpected changes to policy.
“This has spooked investors and left them wondering ‘what will be next?’”
He added: “Nervousness among investors will make it harder and more expensive to build the new energy infrastructure that we need.
“Any increase in the cost of project capital will ultimately get passed on to consumers through higher energy bills.”
DECC’s 10 steps
The Department of Energy & Climate Change (DECC) published a response to the report, listing ten steps it was taking to secure investment.
“The government’s priority is clear – to ensure our families and businesses have access to the secure, affordable and clean energy supplies they can rely on now and in the future,” DECC said.
“To deliver this, long-term decisions are being taken to tackle a legacy of under-investment in the UK’s energy system – creating the right environment for businesses to invest in clean, affordable energy and building an energy infrastructure fit for the 21st century.
“At the same time action is being taken to keep bills as low as possible to protect consumers and ensure they get value for money, including by being tough on subsidies so that technologies stand on their own two feet.”
Meanwhile, EDF’s finance director has quit his post ahead of an expected final investment decision on the £18bn Hinkley Point nuclear power plant. Reports said his resignation was because he was concerned the project could jeopardise EDF's financial position.
> Download the report