Populist politics and short-term thinking are risking crucial investment in energy and threatening our ability to reach climate change targets, the UK’s leading business lobby group has warned.
On Thursday, the CBI will publish a new poll of over 550 business leaders and 2,300 households that reveals growing concern over the future of the UK’s energy sector.
Some 96% of businesses and 94% of households say it is important that energy bills are kept affordable, and 70% of businesses and 76% of households say it is important that the UK takes action to prevent climate change.
Some 73% also say it is crucial that the nation’s energy supply is secure, yet 57% of businesses believe that the UK’s energy security is worse than it was five years ago.
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The CBI says that the lack of a consistent, long-term approach from politicians of all parties risks scaring away investment that is essential to achieving each of these objectives.
At the CBI Energy Conference in London today, deputy director-general Katja Hall will say, “Long-term certainty is needed but just as policies start to click into place, the political climate heats up again. It feels like a game of snakes and ladders.
“One careless comment or populist proposal – whether we’re talking about cutting support for onshore wind farms or freezing energy prices – can make businesses feel like they’re right back at square one.”
“For investors, this is a real worry. And when that investment can go anywhere in the world, it should be a real worry for politicians too.”
The survey also found that respondents named energy efficiency as the second best way to keep bills low – behind increasing competition in the energy market.
“Energy efficiency has for too long been the poor relation in this debate. We need investment in supply but this must be combined with a renewed push to cut our energy usage,” Hall will add.
“To date, we have over-promised and under-delivered. Energy efficiency needs to move up the rankings and be seen as a critical investment.”
This news comes shortly after MPs warned that it would take some £375 billion of investment to ensure Britain’s ageing infrastructure can weather the challenges of the future, including the need to cut carbon.
The public accounts committee calculated that as much as a third of this sum might have to come from private investment.
Energy secretary Ed Davey has dismissed the poll’s findings, telling the Telegraph, “This country faced the prospect of an energy crunch thanks to the under investment and neglect of the previous government but our policies have turned that around.
“Thanks to massive investment under the coalition, Britain’s lights will stay on and the concerns in this poll are no longer justified.”
However, the CBI is far from the first organisation to criticise the government’s approach to renewable energy.
In a report published last week, the National Grid said that the UK’s emission reduction targets could only be met with political commitment to tough environmental regulations supporting investment in low-carbon technologies.
The UK also slipped down the ranking in consultancy firm EY’s renewable energy Country Attractiveness Index this year, as the prospect of changing subsidies for solar and onshore wind farms troubled investors.
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