The inclusion of a 2030 decarbonisation target for the energy sector in the energy bill has been defeated in the House of Lords. The target has seen support from investors.
The amendment was only narrowly defeated by 14 votes. If passed the amendment would have meant setting a decarbonisation target before April 1 2014, now a target is unlikely to be set before 2016.
Concerns have been raised about how the defeat will impact on investor confidence and as a result the future of clean technology in the UK.
Seb Beloe, head of sustainability research at WHEB Asset Management, said the defeat “creates the impression that the framework is unreliable”.
He added, “I imagine investors are as concerned as they have ever been. Whilst the rest of the world is ploughing on it looks like we are having second thoughts.”
Caroline Escott, head of government relations at the UK Sustainable Investment and Finance Association (UKSIF), commented, “Last night’s unsuccessful House of Lords vote on the 2030 decarbonisation target represents a missed opportunity for the government to provide the certainty that investors require in order to restore and update the UK’s aging energy infrastructure.”
Meanwhile, Peter Young, chairman of the Aldersgate Group, also spoke out about the need for a target in order to develop sustainable solutions.
Young said, “The conflict between the government’s green pretensions and it’s increasing determination to procrastinate while relying on high carbon, polluting technologies will send global investors elsewhere and slow sorely needed business growth in the UK.”
He added, “The uncertainty that this government has caused is already delaying desperately urgent UK investment. Meanwhile, our global competitors are developing tomorrow’s solutions with capital that could have been deployed in the UK.”
Thirteen EU member states also called for long-term EU level policy for a 2030 climate and energy framework.
By voting against the decarbonisation target, Greenpeace said the government has shown it is “more interested in assisting the fossil fuel industry than struggling households”.
Friends of the Earth echoed this sentiment. In a statement, the organisation said, “By voting against a clean power target the Lords are saddling us with an energy bill that’s bad news for bill payers, the economy, and the climate – letting the big six energy suppliers off the hook.”
Four of the big six utility companies have raised energy prices in recent weeks. One of the reasons companies gave for the increase was escalating wholesale prices on the global market, however Ofgem figures suggested that wholesale energy prices had remained flat.