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Energy capers do little for investor confidence

David Cameron and his Liberal Democrat Energy Secretary, Ed Davey have announced seemingly different energy policies.

Speaking at Prime Minister’s Question time yesterday, Mr Cameron said energy providers would be forced to put consumers on the lowest tariffs, however Mr Davey’s speech to a CBI conference this morning set out the forthcoming Energy Bill, and mentioned nothing of Cameron’s policy.

Ironically, Mr Davey’s speech was intended to provide certainty to investors, who could “unlock billions in energy infrastructure investment vital for keeping the lights on, emissions down and bills affordable.”

Mr Davey said he wanted to make Britain the best place in the world to invest in new, clean energy infrastructure.

Speaking at the same CBI conference, CBI deputy director-general, Neil Bentley, said: “We are seeing UK energy policy get increasingly political. Are you for green or for growth? Are you for renewables or for gas? Fruitless debates over these false choices can seem like they’re just noises off, but they really matter.

“With every new story that adds to the sense of uncertainty, I hear of more phone calls from overseas head offices to UK executives asking whether it is worth putting further work into scoping out possible investments in the UK.”

Mr Davey outlined the Energy Bill, and said it would centre around giving certainty to investors through the likes of a call for evidence by National Grid, which would inform how the first strike prices are set for the Government’s Contracts for Difference.

Dr Bentley noted the important role Europe had to play, and said: “There is no business case for putting billions of pounds into these long-lived assets if investors cannot see a long-term, stable policy framework. Right now, the policy future looks too much like a blank canvas.

“We mustn’t forget that an effective framework begins at the European level. Far too little emphasis is being placed on securing the future of the EU Emissions Trading Scheme, and much of the policy complexity at home is being constructed to compensate for the lack of a European vision beyond 2020.”

He added: “The case has been made for a more managed market – and the Government should be upfront and make clear that this is where we are heading.

“We appreciate the Government’s efforts to consult thoroughly and get those changes right. But we mustn’t fall victim to paralysis by analysis – the longer we go on without finalised policy, the longer investment stalls or goes abroad.”

This was posted in Bdaily's Members' News section by Tom Keighley .