There is increased nervousness among some investors looking at energy projects in the UK, the Energy and Climate Change Committee have warned in their report. Investor confidence has been dented by a series of sudden policy changes since the election, which may lead to a hiatus in project developments and threaten the UK’s ability to meet its energy security and climate change objectives.
Energy & Climate Change Committee 3rd March 2016 read more »
Sudden cuts to UK renewables subsidies have spooked investors and could lead to higher energy bills, MPs say. Ministers said they needed to cut subsidies to force bills as low as possible. But the Energy and Climate Change Committee says the government’s sudden policy shifts on energy have hit investors’ confidence. It warns lenders may respond by putting a risk premium on future investments in clean energy. This in turn may lead, perversely, to bills increasing not decreasing in the long run. Angus MacNeil, committee chair, said: “Billions of pounds are needed to replace ageing energy infrastructure, maintain secure energy supplies and meet climate change targets. “The government made a number of sudden and unexpected changes to policy. This has spooked investors. “In the same way that someone with a poor credit rating will have to pay higher interest rates when they take out a bank loan, so an energy project that is perceived to be higher risk will have to pay a higher risk premium.
BBC 3rd Mach 2016 read more »
A series of short-sighted and contradictory policy shifts has put billions of pounds of investment in the UK’s energy system at risk at a time when the money is urgently needed, MPs have warned. Consumer costs could jump because of sudden policy changes since the Conservatives won last year’s May election, says a highly critical report by the cross-party House of Commons energy and climate change committee. “It is clear that the confidence of many investors has been dented by the government’s actions since the election,” the MPs say. A month after the election, ministers began unveiling plans to cut subsidies for onshore wind and solar power; scrap a zero-carbon homes measure; pull funding from the Green Deal energy efficiency scheme; cut a tax exemption for renewable generators and cancel a Â£1bn carbon capture and storage competition. “T his has spooked investors and left them wondering what will be next,” said Angus MacNeil, the Scottish National party MP who chairs the committee.
FT 3rd March 2016 read more »
Mixed messages, lack of transparency and a history of sudden announcements by the government has undermined investor confidence in the UK’s energy system, according to a committee of MPs.
Carbon Brief 3rd March 2016 read more »
Scottish Energy News 3rd March 2016 read more »
The government needs to lay out “a credible, long-term vision for the future of the UK’s energy system” in order to calm the nerves of investors, according to a report released by the Energy and Climate Change Committee (ECCC). The paper said that policy changes over the summer of 2015 – such as the early closure of the Rewewables Obligation – “took many stakeholders by surprise” and “raised serious questions” about the government’s plans for decarbonisation. It said although it was “too early to provide hard data” there was “anecdotal evidence of a pause in investment”. Committee chair Angus MacNeil said: “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?’”
Utility Week 3rd March 2016 read more »
The energy regulator Ofgem is to be handed sweeping new powers to manage the country’s electricity supplies, switch off factories and request emergency back-up generation, under energy market reforms being considered by Whitehall. Documents seen by The Times show ministers are considering three main options designed to strip National Grid of its role as the UK’s power system operator, a role that grants it huge supervisory influence. Alarmed by the country’s growing reliance on importing electricity and a lack of new domestic power station developments, ministers are leaning towards a “lead option” which involves the creation of a not-for-profit company modelled loosely on Network Rail. Overseen by Ofgem, it would manage Britain’s electricity system, a role that has traditionally been handled independently by National Grid, one of the nation’s biggest co mpanies. The new organisation would be responsible for balancing the UK’s electricity system and preventing blackouts by calling on extra supplies or requesting that big industrial users temporarily power down to curb demand.
Times 3rd March 2016 read more »