With energy prices increasing, Cameron recently said he was keen to help reduce people’s bills, and suggested that green regulations and charges were only adding to the cost of energy.

Reacting to his comments, the Chair of Energy and Climate Change Select Committee Sir Robert Smith has written to the Prime Minister calling for him to step carefully when reviewing ‘green levies’, such as the Energy Company Obligation (ECO).

In his letter, Smith wrote: “If the Government is to unlock the £110bn of investment needed for new electricity generation and transmission infrastructure by 2020 industry confidence is vital.

“The Feed-in-Tariff with Contract for Difference (FiT CfD) designed to support investment in low-carbon generation is the cornerstone of the Energy Bill currently making its way through Parliament,” his letter states.

Smith said that backtracking on these legally-binding contracts will damage policy credibility, seriously undermine investor confidence and could increase the cost of capital for new energy investments – thus pushing up energy bills.

He asked Cameron to confirm that he would not “undermine these contracts”.

Commenting, REA head of policy Paul Thompson said: “Ed Davey’s public reassurances that renewables funding is not at risk have been very helpful for investors. A clear statement from the Prime Minister would eliminate any lingering doubts altogether, and ensure that the renewables industry has the confidence it needs to secure investment and create new jobs across the country.

“With a capacity crunch looming from 2015, the Government cannot afford any further delay to the construction of new low carbon generation, such as biomass, solar, waste and wind energy,” he added.

Leigh Stringer

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