The Energy and Climate Change Committee has launched an inquiry into whether increased uncertainty around energy policy is undermining investor confidence.
Energy and Climate Change Committee Chair Angus MacNeil MP:
"Energy projects like offshore wind farms and nuclear power stations can take years from planning to completion, so maintaining investor confidence is crucial if we want to upgrade our energy system.
Energy experts have told us that the Government has spooked investors with a series of sudden energy policy changes announced over the summer without proper parliamentary scrutiny.
We will be looking at what steps Government must take to restore confidence in the UK’s energy sector and improve DECC’s policy making processes."
Commenting on the Renewable Energy Country Attractiveness Index (PDF 4MB) (external site), the Chair said:
"Just today we have learnt that the UK has lost its place in the top ten markets for clean energy, as investors look to more attractive markets overseas."
DECC estimates that £110 billion investment is needed in our electricity infrastructure over the next decade. Responses to the Committee’s ECC priorities call for evidence highlighted concerns that policy uncertainty was weakening the case for investment in energy infrastructure in the UK. This could mean that projects will become more expensive to deliver (as investors demand a greater return on their investment to compensate for increased risk) or that projects simply do not go ahead. This could hamper our ability to meet climate, energy security and affordability objectives. Many stakeholders suggested that the recent series of policy announcements may have damaged investor confidence. Others pointed to the lack of clarity on the long-term direction of policy in this area as a problem.
Purpose of the inquiry
The Committee will be investigating the factors that contribute to investor confidence in the energy sector and to build an understanding of how DECC’s policy-making process might impact on investor decisions.
Send a written submission
The Committee invites responses addressing some, or all, of the following questions in no more than 3,000 words:
- Where is future investment in the energy sector going to come from? Which types of entities/organisations will invest? What are their criteria for investment decisions?
- How does the UK compare with other countries in terms of policy risk? Are there examples of best practice that the UK could learn from?
- How well does DECC consider the needs of investors in its policy making process?
- What steps could DECC take to reduce policy uncertainty and increase investor confidence?
- How does DECC’s use of evidence affect investor confidence? Can you provide any specific examples where evidence has been used well or poorly?
Deadline for submissions: Monday 26 October 2015
Submissions should be submitted via the Investor confidence in the UK energy system Inquiry Page.
You can tweet @CommonsECC about #UKEnergyInvestment