RES Says Future U.K. Green Investment at Risk Without Carbon Cap
Renewable Energy Systems Ltd., the developer planning to attract as much as 2 billion pounds ($3 billion) into U.K. wind this decade, says investment beyond 2020 is at risk unless power industry carbon emissions are capped.
The company may look to other markets should the U.K. fail to set a limit for 2030, Gordon MacDougall, chief operating officer at RES U.K. & Ireland Ltd., said in an interview.
“There is a risk that given the uncertainty and increasing political risk, other markets probably offer better long-term prospects and we may look at allocating more development capital to those,” he said. “We can be quite sure that our peers and manufacturing supply chain would be doing likewise.”
The developer is among utilities, environmental groups and lawmakers from all three main political parties calling for a so-called decarbonization target next year. Vestas Wind Systems A/S (VWS) is among companies saying the lack of a goal would increase the risks attached to committing to long-term investments.
“You’re not going to invest in the infrastructure and manufacturing capability if it’s only going to serve us a few years,” MacDougall said. His comments come after regulator Ofgem said consumers will see bills rise as higher gas imports counter closing oil and coal-fired stations.
RES, based in Hertfordshire, plans to build more than 1,000 megawatts of U.K. and Irish wind power by the end of the decade, with 1.5 billion pounds to 2 billion pounds of investment, said MacDougall. Projects can take 10 years to build, he said.
The government proposes deciding on the carbon target in 2016 after opposition from Chancellor of the Exchequer George Osborne, who has pushed for gas-fired generation as cheaper than renewables. Lawmakers are scrutinizing legislation that seeks to spur 110 billion pounds of new power infrastructure.
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