DECC: UK is still attractive place to invest in energy
The UK energy market is still an attractive and stable market to invest in, according to Energy Minister Andrea Leadsom.
Giving evidence in Parliament to the Energy and Climate Change Committee on how Government energy policy has affected investor confidence, Leadsom maintained that the impact had been minor.
She said: “The UK remains an attractive place to invest with continued interest from debt and equity markets.
"It is widely seen to be one of the most stable markets thanks to its constant risk and return profile, world class regulation, transparent policy development, strong financial markets and clear property rights.
“And that is backed up by a wealth of statements both from investors and sectors themselves."
In recent months, the attractiveness of the UK renewables market has been downgraded by consultancy EY to its lowest level ever, while CBI director general said that low-carbon businesses and investors were faced with deep uncertainty.
Several solar firms have also gone into administration, while parts of the Dogger Bank offshore wind farm will not be built, and Drax pulled out of the landmark White Rose CCS project, citing a “drastically different regulatory environment”.
When presented with this list of signals by the Committee, Leadsom appeared to accept that investor confidence may have taken a hit, albeit temporarily.
She said: “The policy reset is always going to lead to a period of uncertainty, but we’re trying to contain that to the shortest period possible. We’ve got to protect the bill payer; there’s no choice about that, so we’re trying to keep this period as short as we can.”
When asked how DECC planned to rebuild investor confidence going forward, Leadsom said that a lot depended on the spending review, due to be announced on 25 November.
She added that she couldn’t give a date, but that DECC would be making policy announcements with the “absolute goal of giving certainty to investors”.
Tuesday’s hearing marks the opening of the first of three inquiries into the Conservative Government's track record on the low-carbon economy and potential policy options going forward.
The ECCC will be scrutinising investor confidence in the UK energy sector, home energy efficiency and demand reduction, and low-carbon network infrastructure.