PRIVATE sector investment in the UK’s energy sector rose to £11.6bn last year, a £1.6bn rise from the year before, new research said yesterday.
The investment led to a £24bn direct contribution into the UK economy and over 600,000 jobs, according to a report by Ernst & Young for industry body Energy UK.
The energy sector contributes around three per cent of the UK’s GDP and paid around £3bn in tax revenues last year, £1.2bn of which was corporation tax.
“The UK energy sector has, in recent years, consistently delivered higher levels of both investment and employment across the country,” said Tony Ward, head of power and utilities at EY. “In 2012 investment levels haven’t lost momentum, despite slow progress towards a reformed energy policy.”
The new research follows a furious political debate on energy market reform over the past six weeks, with Labour leader Ed Miliband proposing to freeze energy bills if elected.
While applauded by consumer groups, business groups and the energy industry argue that this would detract much-needed investment into the sector.
“While near term affordability of energy is the dominant issue at the moment, it is being debated at a time when the fruits of recent massive capital investment, and an effective focus on energy efficiency are beginning to be seen in consumption patterns,” said Ward.
“Long term consumer choice over energy consumption is driven by an expectation of absolute future security, as much as affordability of unit price.”