National Grid Plc cut its outlook for U.K. power-plant connections, saying investors aren’t building new capacity because the direction of the government’s energy policy isn’t clear.
The operator of Britain’s electricity network sees 2,500 megawatts of new capacity being completed in the next 2 1/2 years. That’s short of the 2,000 megawatts a year it forecast previously, Chief Executive Officer Steve Holliday said today.
“There is no sign at the moment of anyone wanting to build new generation,” Holliday said in a phone interview. “It’s clear that generators are not willing to invest in the U.K. at the moment until there’s certainty around the energy bill and the whole stability of the environment.”
A draft energy law before parliament aims to attract 110 billion pounds ($178 billion) of investment in new power stations and grid upgrades by 2020 to avoid shortages as aging plants close. The bill has come under fire from developers and industry who say it lacks detail on how incentives will work.
Some 7,500 megawatts of generation was shut last year including more than 4,000 megawatts of coal retiring due to emissions rules. A “mere 700 megawatts,” mainly wind, started this year, Holliday said.
“It’s important that the energy bill gets through and it’s important we have stability around that and regulation in the U.K. so that people will come in and invest the hundreds of billions of pounds that are required in new generation,” he said.
National Grid boosted investment in electricity transmission by 3 percent to 703 million pounds in the six months through September as it connected new power plants, invested in a link transporting renewable energy between Scotland, England and Wales and the London Power Tunnels project.
The company reported today that pretax profit fell 7 percent to 979 million pounds in the fiscal first half as financing costs rose.