Business group slams plan for energy reform

BUSINESS leaders and MPs yesterday criticised the government’s draft Energy Bill, saying that in its current form it will fail to provide a secure and affordable supply of energy.

“The bill does not bring the clarity and certainty that investors require. This could mean a higher cost of capital and potentially higher bills,” said Corin Taylor, senior economic adviser at the Institute of Directors.

“Clean and affordable replacements for our ageing coal and nuclear stations are urgently needed, and unless the bill is substantially improved, the government will have to go back to the drawing board,” he added.

A report by the House of Commons energy and climate change committee, released yesterday, attacked Treasury intervention in the legislation, which aims to ensure Britain has a secure supply of low-carbon energy.

The report says the government’s decision to backtrack on a pledge to guarantee loans for energy projects – which would have reduced borrowing costs – will push up bills and put off potential investors in nuclear generators and off-shore wind farms.

Committee chairman Tim Yeo, who sits on the boards of several renewable energy companies, said the bill would not attract enough investment to meet future needs: “Nobody wants to see a blank cheque written out for green energy, but the government must provide investors with more certainty about exactly how much money will be available.”

The Department of Energy and Climate Change has estimated that up to £110bn of investment in new electricity generation and transmission infrastructure is likely to be needed by 2020, requiring the current rate of investment to double.