The UK is failing to attract the level of investment needed to build low-carbon infrastructure, according to a new CBI report. With a third of UK energy supply due to close in the next decade and ambitious emissions reductions targets to meet, the UK’s power sector alone needs £150 billion of private sector investment over the next twenty years.
However, a new CBI report,’Risky Business: Investing in the UK’s low-carbon infrastructure’, reveals that senior business leaders are not convinced that the UK can attract low-carbon investment at the scale and pace required.
Over the next few decades, the UK faces a unique investment challenge. The key to hitting its stretching legal emissions targets will be the ability to generate the large and sustained investment needed to replace and decarbonise the energy infrastructure. The UK Government will need to show leadership and ingenuity in making this investment happen.
The report sets out recommendations on how the Government should respond to this challenge. The report argues that:
* Low-carbon investment is vital for the UK;
* The pace and scale of investment is a barrier to success;
* Government must take action to set the right investment conditions:
* Addressing policy and market risk must be a priority;
* A Green Investment Bank can be an important investment enabler.
“Businesses want to get on with building new low-carbon infrastructure, but there is still too much policy uncertainty. We need the Government to set a clear direction of travel and to stick to it,” comments Katja Hall, chief policy director for the CBI. “Electricity Market Reform is a positive start but more needs to be done to provide wider policy certainty for low-carbon investment. It is particularly important that the planning system delivers timely decisions and there are no more sudden policy shifts as we saw with the Carbon Reduction Commitment. The Green Investment Bank needs to issue bonds as soon as possible to provide a secure bridge between pension funds and capital intensive technologies.”