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Business warns on need for investment in energy

United Kingdom
Financial Times
Brian Groom, Business and Employment Editor

The UK is in the last chance saloon to secure investment in its creaking energy infrastructure, ministers are being warned by a leading business group. The EEF manufacturers federation is urging the new government to show leadership by setting out a timetable for action, or risk undermining energy security within five years.

There is only a limited window of opportunity to implement new policies and market reforms to generate the estimated £200bn of investment the UK needs in the next decade, the EEF argues in a report published on Monday. It says the energy industry must make far-reaching investment decisions as early as 2012 to secure finance and mobilise supply chains.

The EEF says the early signs from the Con-Lib coalition are mixed. It welcomes its commitment to make market reforms to enhance energy security and encourage investment, but worries that ministers desire to expand renewable energy further and faster than Labour will be expensive for energy users. Not only do we have to replace our ageing infrastructure and face the risks of relying on increasing imports of our most widely used fuel meaning gas at the same time we are trying to achieve renewable energy targets which are among the most costly and ambitious in the world, said Steve Radley, EEF director of policy.

He added: Time is now of the essence and the UK is in the last chance saloon as far as delivering the scale of investment required in our energy infrastructure. Government must demonstrate it grasps the urgency of the situation and show leadership in setting out a timetable for action. The EEF wants the government to keep to the existing timetable for replacing nuclear power stations and reversing nuclears declining share of electricity generation. That means completing planning reforms later this year and finishing assessment of new reactor designs by next year.

It says the two main support programmes for renewable energy the renewables obligation for large-scale technologies and feed-in-tariffs for smaller ones are poor value for money and need reform. Labours target was for renewables to reach 15 per cent of consumption by 2020, a sevenfold increase, as part of a European Union commitment. The coalition wants a higher target but the EEF says this should be reviewed in progress reports to the European Commission and dropped if not cost-effective.

It urges the government to achieve a stable and consistent carbon price by converting the existing climate change levy into a tax on the amount of carbon used. It also wants an obligation placed on energy suppliers to invest in gas storage facilities: the UK has only 16 days of storage compared with 99 in Germany and 122 in France. It says the UK is falling behind on carbon capture and storage and calls for a winner to be chosen for a demonstration project by the end of this year.

El contenido de las noticias que se presentan en esta sección es responsabilidad directa de las agencias emisoras de noticias y no necesariamente reflejan la posición del Gobierno de México en este u otros temas relacionados.


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