CBI says policy uncertainty stifles low-carbon investment
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The CBI has warned that that the UK is failing to attract the level of investment needed to build low-carbon infrastructure.
With emissions reductions targets to meet and a third of the country’s energy supply due to close in the next decade, the UK’s power sector alone needs £150bn of private sector investment over the next twenty years, the CBI (Confederation of British Industry) said.
In a new report entitled Risky Business: Investing in the UK’s low-carbon infrastructure, the CBI shows that senior business leaders are not convinced that the UK can attract low-carbon investment at the scale and pace required.
‘Businesses want to get on with building new low-carbon infrastructure, but there is still too much policy uncertainty,’ said Katja Hall, chief policy director for the CBI. ‘We need the government to set a clear direction of travel and to stick to it.
‘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 that there are no more sudden policy shifts as we saw with the Carbon Reduction Commitment.
‘The Green Investment Bank needs to issue bonds as soon as possible to provide a secure bridge between pension funds and capital-intensive technologies.’
The report’s findings were based on interviews conducted by Accenture with investors from utilities, manufacturing and property owners on their views on potential barriers and solutions to securing investment.
‘The companies we spoke to were clear — few believe that the UK is on track to meet its emissions-related targets,’ said Omar Abbosh, UK and Ireland managing director of resources at Accenture. ‘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.’
Commenting on today’s report, Tom Foulkes, director general of the Institution of Civil Engineers (ICE), said: ‘Low-carbon infrastructure will underpin our long-term economic recovery, driving our international competitiveness, and so it is crucial that government gives investors the certainty they need to deliver it.
‘The Green Investment Bank, alongside planning and energy market reforms and the second National Infrastructure Plan, can play a critical role in de-risking investment, however, it is vital that government demonstrates continued commitment to the principle of an enduring, independent bank — not a fund vulnerable to abolition by changing governments — if it is to succeed in generating investment on the scale needed.’
Related Files
Risky Business: Investing in the UK’s low-carbon infrastructure
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Readers' comments (4)
Brian Pollard | 28 Apr 2011 1:43 pm
This document contains a great deal of verbiage about banks and contracts, with no vision at all about how to do the job, apart from a mention of wind power.
The government's published renewable energy strategy is not much better though it does include biomass, tidal and wave energy (all in fact having a very small capability compared with wind) and is looking at heat pumps and electric cars as part of the solution without mentioning that they will increase further the need for electricity, which is only planned to be 30% renewable by 2020.
I'm afraid it is a case of the blind complaining about the lame in this case.
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Anonymous | 28 Apr 2011 3:12 pm
Again.... while foreign industry marches on and gets on with it...with the full support of their Governments the UK falls further behind the rest of the planet....... procrastination and bureacracy is not the only industry left to be funded by the public purse..and is not sustainable....
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S. Martin | 2 May 2011 1:00 am
There are plenty of viable options, but again it is short sightedness and lack of knowledge which is the problem.
Alternative and traditional fuels are available, but no real investment in them, recirculating geothermal steam for electricity generation, but no investment.
The issue is simple, Government needs engineers to advise on the options of what is available, worthwhile, and economically viable. What we have got is the same old, same old, wind, wave, and solar power; all excessively expensive and blight the landscape.
Did engineers not warn of the noise of wind turbines? yes, and they were ignored, and many are up but not running, or have limited operating conditions due to noise.
How about looking to the past, one solution is the water wheel, once the preserve of the corn grinding, then industry.
How about using these on rivers and streams, constant power, cheap, and very basic and reliable technology. How many weirs do we have on the countries rivers? Simple by-pass channels and water wheels, free power source, no emissions, and electricity. Maintainance, very little, low profile covered structures, so no blight on the landscape, they can be made to blend in.
For many years a good friend has owned an old mill with a water wheel, we refurbished and upgraded it. Onto the shaft is fitted a constant speed gearbox with an alternator, so nothing complex, costs of electricity for him? free. In fact its a winner as he gets paid for supplying the grid, so a money maker.
It can be done, simply, easily, and most of all, cheaply. It just needs the will to do it.
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Nick Woodward | 3 May 2011 2:45 pm
Surely the time is ripe for ratcheting up HYDROGEN production & storage infrastructures
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