10 ways DECC is boosting investor confidence in the UK's energy market (according to DECC)
The Department of Energy and Climate Change (DECC) has released a list of ten ways it will stimulate investor confidence in the UK's energy market in the wake of widespread criticism aimed at numerous abrupt policy amendments.
With the Energy and Climate Committee report published last week (3 March) stating that investor confidence had been severely ‘dented’ by the ‘'sudden and numerous’ energy policy changes, Energy Secretary Amber Rudd has published a list aimed at alleviating the energy market.
While some are sick and tired of the criticism aimed at Government, others are concerned about the green policy Jenga approach, and are warning that it is only a matter of time before the final brick is pulled and the market collapses.
Under this Government the UK has fallen out of the top 10 for renewable energy installations, with the long-running feed-in tariff saga and last Friday’s unexpected changes to the Renewable Heat Incentive, prime examples of unstable environment investors are expected to operate in.
Despite wielding the axe, Rudd has moved to reassure investors and NGOs alike.
Here are the ten ways she aims to restore confidence to the market
1) Reforming the Capacity market to protect clean energy sources and send a clear signal to investors that the UK is building energy infrastructure fit for the 21st century.
2) Commit to the construction of the Hinkley Point C nuclear plant, which will power six million homes for 60 years and create 25,000 jobs in the UK.
3) Boost innovation funding to more than £500m which will include a £250m funding pot for nuclear innovation.
4) Support the 10GW capacity of new offshore wind projects scheduled for the 2020s, with a further three auctions scheduled if cost reduction conditions are met.
5) Close all unabated coal-fired power stations by 2025 if there is evidence that a shift to gas can compensate for the closures.
6) Allocate £295m to invest in energy efficient schools, hospitals and other public services through new designs and retrofitting.
7) Introduce a new five year energy efficiency supplier obligation set a £640m a year, which will help more than one million homes reduce carbon emissions.
8) Double the support given to households and businesses to decarbonise heating by raising support from £430m to £1.15bn.
9) Allocate more than £300m to deliver 200 heat networks which will raise more than £2bn through private investment alone.
10) Raise the UK’s climate finance commitment by 50% to £5.8bn over the next five years to help the world’s poorest countries adapt to climate change.
Walk the walk
The majority of these pledges have been issued before, with Rudd releasing a similar list in response to criticism over the ‘energy gap’ that DECC could create through its policies.
Reports suggesting that EDF’s chief financial officer Thomas Piquemal has quit the company due to concerns over Hinkley Point’s investment decisions will do little to ease economic concerns. The decision to scrap a £1bn investment fund into carbon capture & storage fund adds little weight to the innovation pledges.
With investors able to play a vital role in reducing carbon emissions and creating stable markets, attentions will turn to next week’s Budget (16 March). With the Autumn Budget revealing that DECC's spending will be reduced by 22% over the next four years, next week’s reveal could shape the future of the energy market.