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Government must restore investor confidence in UK energy sector

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Staff writer ▼ | March 4, 2016
There is increased nervousness among some investors looking at energy projects in the UK, the Energy and Climate Change Committee have warned in their report.
UK energy
Energy   The Energy and Climate Change Committee
Investor confidence has been dented by a series of sudden policy changes since the election, which may lead to a hiatus in project developments and threaten the UK’s ability to meet its energy security and climate change objectives.

Angus MacNeil MP, chair of the Energy and Climate Change Committee said: "Billions of pounds of investment is needed in order to replace ageing energy infrastructure, maintain secure energy supplies and meet our legally-binding climate change targets.

"Since coming to office in May, the Government has made a number of sudden and unexpected changes to policy. This has spooked investors and left them wondering 'what will be next?'"

The Government has cut support for onshore wind and solar, ended the "Green Deal" energy efficiency programme and cancelled a long-standing competition to deliver carbon capture and storage.

The Committee heard that the contradictory signals coming from Government were causing some investors to put projects on hold, until there was more clarity on energy policy.

Other factors affecting investor confidence include a lack of transparency in the policy decision-making process and a policy "cliff-edge" in 2020.

The report also argues that the Government needs to factor the impacts that its decisions are having on investor confidence more explicitly into the policy making process.