Energy Policy U- Turns ‘may cost households £120 a year’
The Energy & Climate Change Committee (ECC) have warned the Government that they must restore investor confidence in the UK energy sector.
They claim that there is increased nervousness among some investors looking at energy projects in the UK. Their confidence is dented by a series of sudden policy changes since the election.
Angus MacNeil MP, chair of the ECC stated “Billions of pounds of investment is needed in order to replace ageing energy infrastructure, maintain secure energy supplies and meet our legally-binding climate change targets. Since coming to office in May, the Government has made a number of sudden and unexpected changes to policy. This has spooked investors and left them wondering 'what will be next?”
The Government have cut support for on shore wind and solar, ended the Green Deal, removed zero carbon standard from Building Regulations as well as cancelled long term commitments to carbon capture and storage.
Mr MacNeil also stated “Two months ago, a historic new global climate agreement was signed in Paris. But when the UK Government talks about using more gas while simultaneously cutting funding for carbon capture and storage or the need to control costs while halting onshore wind, which is the cheapest form of low-carbon energy, investors begin question how committed the Government really is to tackling climate change. The Government must set out a credible, long-term vision for the future of the UK’s energy system.”
The ECC wants the Government to look at long term investment rather than short term costs:
"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.
We are concerned that the Government is only considering short-term costs to consumers when it makes energy policy decisions. It needs to pay more attention to the impact of its decisions on the energy prices paid by the next generation of bill payers. Cutting support for low-carbon energy today may prove to be a false economy in the long-run.”
In the report it states: “Octopus Investments calculates that the UK may be paying an extra £3.14bn per annum in investment costs.” Which if applied to domestic consumers would add as much as £120 per year to the average household bill.
Elmhurst has commented on all of the major policy changes by this current Government over the last year in various news articles. They have undoubtedly all cause major investment disillusionment amongst also anyone wanting to invest, but also the existing industry trying their best to carry out those short termed policies.
We fundamentally believe there must be a long term strategic plan; that exists beyond short term political goals. We wholeheartedly want to see this plan, and start to all run in the same direction, not the start/stop mentally of the past years, which is unhelpful to consumers and Industry.
Stuart Fairlie – Head of Technical, Elmhurst Energy
The Energy & Climate Change Committee Report:
The Guardian view: