MPs slam government鈥檚 lack of long term vision in energy policy

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A parliamentary committee has slammed the government鈥檚 lack of long term vision in energy policy, claiming it is damaging investment in power generation schemes and could lead to higher bills.

The report by the energy and climate change select committee has concluded current policy faces a 鈥渃liff-edge鈥� by 2020 unless drastic action is taken to remedy a series of issues, including a lack of transparency, sudden and numerous policy announcements, inconsistent and contradictory approaches and insufficient consideration of investor impacts.

The select committee also found that the impact of a 鈥渓ost decade鈥� of power generation could result in higher energy bills.

Giving evidence to the committee, Statkraft UK, which invests in hydropower, onshore and offshore wind farms, said: 鈥淭he biggest risk is that UK is seen as risky and unreliable destination for long term capital-intensive investments 鈥� precisely what EMR [Electricity Market Reform] was designed to avoid. This won鈥檛 stop investment, but it will make everything more expensive for investors and 鈥� ultimately 鈥� consumers.鈥�

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The committee said the attractiveness of the UK as a destination for international investment is being called into question following a number of 鈥渟udden and numerous policy announcements鈥� and a lack of transparency over a string of policy changes.

The reported noted that in 2014, almost two thirds of investment in renewable energy across the EU was ploughed into UK projects, noting that 鈥渇inancial investors invested nearly 鈧�6.4bn in equity in EU renewable infrastructure in 2014, of which nearly 鈧�4.0bn was invested in the UK鈥�.

Giving evidence to the committee energy producer E.ON said the combination of policy changes had 鈥渓eft a void鈥�. E.ON said: 鈥淚nvestors have been left questioning the future direction of Government policy and its commitment to long term targets鈥�

Angus MacNeil MP, chair of the energy and climate change committee said: 鈥淏illions 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.

鈥淪ince 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 鈥榳hat will be next?鈥欌��

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