The U.K. energy market’s pace of reform is “frustrating” and risks falling victim to “paralysis by analysis,” the U.K.’s biggest business lobby group said.
Britain needs to encourage investment in a diverse energy mix including renewable energy, nuclear power, natural gas and carbon capture and storage, Neil Bentley, deputy director general of the Confederation of British Industry, said in an e-mailed speech he’s due to deliver today alongside Energy and Climate Change Secretary Ed Davey.
Davey, a Liberal Democrat, has advocated renewable energy as his department works to bring a draft energy law before Parliament this fall. Chancellor of the Exchequer George Osborne, a member of the Conservative Party, has supported gas and on Oct. 8 announced possible tax breaks for shale production.
“Let’s stop arguing over the energy mix and focus on attracting investment to create jobs and growth as quickly as possible,” Bentley said in the prepared remarks. “There is no business case for putting billions of pounds into these long-lived assets if investors cannot see a long-term, stable policy framework. Right now, the policy future looks too much like a blank canvas.”
In July, the U.K granted a tax credit worth 500 million pounds ($776 million) for gas drillers, a measure sought by Osborne, and cut subsidies for renewable energy.
The energy department on May 22 published a draft of a bill designed to attract the 110 billion pounds of investment needed to replace aging power stations and upgrade the grid by 2020. Bentley today will call for more detail to be included in the draft law that goes before Parliament later this year.
The CBI is calling for more clarity on incentives to the energy industry beyond 2015 and a proposed plan to pay power generators for providing back-up supply. Bentley will also demand relief for energy-intensive industries to exempt them from some of the additional costs of new regulations.