Business leaders fear the UK will not attract the low-carbon investment needed to meet energy needs, a poll has revealed.
A CBI report, Risky Business: Investing in the UK’s low-carbon infrastructure, saw 24 interviews conducted with chief executives across the energy, finance, manufacturing and property sectors.
Chief policy director for the CBI, Katja Hall, said: “We know the UK needs a balanced energy mix to cut emissions and grow the low-carbon economy, but the big question now is how we pay for it.
“Businesses want to get on with building new low-carbon infrastructure, but there is still too much policy uncertainty. We need the government to set a clear direction of travel and to stick to it.”
The report’s findings were based on in-depth interviews by management consultants Accenture with a range of different investors from utilities, manufacturing and property owners on their views on potential barriers and solutions to securing investment.
The total annual investment needed in low-carbon energy alone to meet emissions reduction targets and replace old plants is expected to be between £7.5 billionand £10bn a year.
Accenture managing director UK & Ireland, resources, Omar Abbosh said: “The companies we spoke to were clear – few believe the UK is on track to meet its emissions-related targets.
“If the government reduces investment risks, low-carbon spending can happen sooner, driving economic growth and cutting the cost to the end consumer. If not, investment could be attracted to other countries with more appealing incentives.”
Among the measures recommended in the report are that the government:
- Sends the right investment signals through reform of the electricity market.
- Implements a planning system that will facilitate growth and aims to tackle the backlog of energy infrastructure projects waiting approval.
- Makes the Green Deal for energy efficiency workable for investors by designing a viable financial model where no party will bear a disproportionate level of financial risk.
- Allows a Green Investment Bank to issue government guaranteed bonds as soon as possible.
Ms Hall said: “Electricity Market Reform is a positive start but more needs to be done to provide wider policy certainty for low-carbon investment. It is particularly important that the planning system delivers timely decisions and there are no more sudden policy shifts as we saw with the Carbon Reduction Commitment.”