The big question: How to pay for low-carbon future?
The UK is facing some serious energy challenges in the next several years: it has ambitious carbon reduction targets to meet and is also scheduled to shut down around one-third of its existing energy supply, including ageing nuclear power plants. That leaves the country with two critical tasks: build new energy supplies (and a smarter infrastructure) to offset the losses from those shutdowns … and find ways to pay for that construction.
So far, it’s falling down on the latter task, according to the business lobbying organisation CBI.
Looming changes in the emissions and energy landscape mean the UK’s power sector alone will need £150 billion in private-sector investment over the next 20 years, the CBI says. In a new report, however, the organisation finds that senior business leaders are not convinced the UK can attract low-carbon investment at the scale and pace required.
“We know the UK 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,” says Katja Hall, chief policy director for the CBI. “Businesses 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.”
The CBI is calling for the government to:
- Develop a long-term, low-carbon growth strategy and delivery plan for the UK.
- Send the right investment signals through reform of the electricity market.
- Implement a planning system that will facilitate growth and aim to tackle the backlog of energy infrastructure projects waiting approval.
- Make the “Green Deal” for energy efficiency workable for investors by designing a viable financial model where no party will bear a disproportionate level of financial risk.
- Allow a Green Investment Bank to issue government guaranteed bonds as soon as possible.
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