Energy industry faces funding gap, warns CBI

THE UK is failing to attract the investment needed to build a low-carbon infrastructure, according to the employers’ body, the Confederation of British Industry (CBI).

A report by the body shows the UK’s power industry needs private sector investment of £150bn over the next 20 years to hit emissions reduction targets and replace some existing sources of energy.

In ‘Risky Business: Investing in the UK’s low-carbon infrastructure’, the CBI warns that senior business leaders are not convinced that the UK can attract low-carbon investment at the scale and pace required.

Regional director Damian Waters said: “We know the North West 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 in the region 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.

“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. 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 CBI has called on the Government to develop a long-term, low-carbon growth strategy and delivery plan for the UK and send the right investment signals through reform of the electricity market. It also wants the planning system to tackle the backlog of energy infrastructure projects waiting approval.

The body’s findings were based on in-depth interviews by the consultant Accenture with a range of different investors from utilities, manufacturing and property owners.