Following an eight-month long inquiry, during which the Committee heard from a number of individuals and organisations including the European Commission, the Secretary of State for Energy and Climate Change, Bloomberg New Energy Finance, the CBI, WWF and power companies, the Committee’s alarm at the degree of uncertainty and complacency about affordable, secure and low carbon energy supplies has grown.
Commenting on the report, Lord Carter of Coles, Committee Chairman, said:
“It is clear to us that investment is urgently required, notably in a low carbon, interconnected and innovative energy system, that makes us less reliant on imports of highly volatile and dirty fossil fuels. Such investment would help to deliver secure and low carbon energy, boost European economic growth, and stabilise household and industrial costs.
The value of energy companies has slumped since 2008, the public purse is severely constrained, but more than enough money is around in the investment community. This should be a great time to invest in long term assets, such as energy, but clear policy is needed in order to release it. No country is an energy island, so EU policy is particularly important. We need leadership and direction from the EU and its Member States in developing and agreeing an energy policy framework through to 2030.
At the heart of that framework, we see two core policies. First, a revised EU Emissions Trading System (ETS). The ETS has failed but it is not dead. It needs to include a minimum price for carbon, providing governments and investors with the confidence to support innovation through investment. Second, and contrary to UK Government policy, a target for the proportion of energy to be delivered through renewable energy until 2030 is required.
There are no easy answers to meeting these challenges and keeping Europe competitive in the global market. But unless we find a way of doing this, our future energy could well be highly polluting, unaffordable and insecure.”
Other recommendations from the Committee include:
- better use by Member States of fiscal policies to unlock investment;
- the Commission and Member States working with large-scale investors to highlight opportunities within the energy sector;
- assessments by the Commission of the impact of national energy policies on neighbouring Member States;
- a regulatory approach to boosting carbon capture and storage;
- development of a regulatory structure for the exploitation of shale gas in the EU;
- a greenhouse gas reduction target of 40% compared to 1990 levels, in line with an 80% reduction by 2050;
- development of electricity interconnections between Member States;
- better public engagement on the benefits of new energy infrastructure
- avoiding excessive reliance on capacity mechanisms, such as that proposed in the UK, to pay companies to guarantee a supply of energy; and
- that the UK Government also examine the potential for a regulatory framework to increase gas storage.