U.K. Government Delaying Decisions May Threaten Green Investment

  • Carbon plan and clean energy auctions may be delayed to 2017
  • Change in leadership and new government stalls key decisions

The U.K. has delayed a raft of decisions needed to spur investment in clean-energy technologies from offshore wind to nuclear power, underscoring the challenges faced by the government after the country’s decision to leave the European Union.

The newly-formed Department for Business, Energy and Industrial Strategy may delay until next year publication of the fifth carbon budget, a key plan setting out how the U.K. will meet its carbon reduction targets for 2030, Climate Change Minister Nick Hurd said Tuesday. The four ministers at the BEIS have said they don’t want to be rushed into making choices that could shape the country’s post-Brexit economy. 

“I think there’s some flexibility around the publication,” Hurd said at a climate-change event in London. “It’s more important to get this right than to rush something out that doesn’t hit the target.”

Investors await publication of the report as a clear signal about how the country will meet its target of reducing carbon dioxide emissions by 57 percent compared to 1990 levels. A delay risks complicating the job of Secretary of State Greg Clark, who is responsible for drawing investments in new infrastructure while at the same time economically curbing carbon emissions.

Planned Auctions

The BEIS has already delayed the first of three planned auctions that will award contracts for new offshore wind farms and other low carbon energy projects. Bidding for the so-called contracts for difference is now due to take place in 2017. The previous energy minister, Andrea Leadsom, had expected the first auction at the end of this year.

“The renewables industry has now been waiting for two years since the last contract for difference auction,” said Stuart Pocock, the chief operating officer at London’s Renewable Energy Association, in an e-mailed statement. Clarification of the timeline would “provide some much needed certainty in these political times,” he said.

The delay to the carbon budget plan and auction would add to the growing list of infrastructure projects being reevaluated since the U.K.’s decision to abandon the EU in June. 

Other projects:

  • One of Prime Minister Theresa May’s first acts was to delay a decision on building two new nuclear reactors at Hinkley Point in Somerset, just hours after developer Electricite de France agreed to invest in the 18 billion-pound ($24 billion) project.
  • Energy Secretary Greg Clark missed an Aug. 31 deadline to decide on planning permission for National Grid Plc’s Yorkshire and Humber CCS Cross Country Pipeline, which would be used to transport carbon dioxide emissions from fossil-fueled power stations and industrial plants to a storage site under the North Sea. A spokeswoman for BEIS said a decision on the pipeline would be made in due course. 
  • Other energy and transportation building plans left hanging by the U.K.’s vote to leave the EU include a high-speed rail line from London to the north of England, an expansion of airport capacity and urban transit improvements.

The government’s clean energy policy “now amounts to no more than delayed decisions, broken promises, and projects on ice,” said Barry Gardiner, Labour’s Shadow Energy and Climate Change Secretary, in an e-mail. “This paralysis from the new department is absolutely unacceptable and will do nothing to restore investors’ plummeting confidence in Britain.”

The government didn’t immediately respond to requests for comment.

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