Fundamental ideological disagreements within the government about renewable energy have turned away droves of potential investors in crucial new green electricity generators, according to damning new research. Green energy investment has more than halved in the past three years.
Britain needs to attract tens of billions of pounds of private investment in low-carbon energy in the next decade, to ensure the lights stay on while meeting ambitious environmental targets.
But alarming new research shows that investment in essential industrial-scale wind, water, solar, biomass and nuclear power projects has more than halved in the past three years, in the face of government indecision over its green energy policy.
Furthermore, last week’s energy bill failed to provide many would-be investors with the reassurance they need to “pull the trigger” on key renewable energy projects, warns Michael Liebreich, head of Bloomberg New Energy Finance, the researcher behind the report.
Experts blame the ideologically divided coalition for its failure to agree a coherent renewable energy policy and its, sometimes public, disagreements about low-carbon electricity subsidies and whether to introduce firm targets to reduce carbon emissions.
They say the resulting uncertainty has shaken the confidence of potential financiers who need a clear sense of their likely returns along with certainty that the government is in favour of green energy and won’t suddenly change its policy.
Michael Liebreich, head of Bloomberg New Energy Finance, said: “Yes, the coalition could have moved faster to eliminate uncertainty, especially in the past two months with the rise of the ‘dash for gas lobby’ and the sudden lurch to the sceptical which is very destabilising.”
Mr Liebreich is referring, in part, to David Cameron’s decision in September to replace pro-renewable energy minister Charles Hendry with John Hayes, a well-known opponent of wind power. Since his appointment, Mr Hayes has continued to voice his opposition to wind power – saying Britain was already “peppered” with onshore windfarms and that “enough is enough” – even though his stance contradicts the strategy of his boss, energy secretary Ed Davey, for whom the technology is key. Meanwhile, George Osborne, is set to announce formally place gas – a non-renewable, fossil fuel – at the centre of Britain’s energy strategy in his autumn statement tomorrow.
“Swapping out Charles Hendry seems pretty extraordinary, to be honest, if they want to attract investment,” said Mr Liebreich, adding that last week’s long-awaited and fiercely-negotiated energy bill was nonetheless a step in the right direction because it “establishes the principle of energy diversity and provides a good framework to achieve this.”
But although most experts agree that last week’s bill represents a progression, many are discouraged by the decision to drop a legally-binding target to make electricity generation almost entirely green by 2030. This was proposed by Mr Davey but later overruled by George Osborne and its removal has left many potential low-carbon investors unconvinced about the government’s commitment to renewable energy – although there is a possibility of an amendment to return it to the bill as it passes through Parliament.