Lord Heseltine has called for a “definitive and unambiguous” energy policy for the UK to provide long-term investment certainty for the industry.
In No Stone Unturned, his a wide-ranging blueprint for stimulating growth in the UK published today, the former cabinet minister and Tory grandee said that without the “real certainty” of a long-term energy policy, investors will “simply not risk the enormous sums of capital” needed to develop the UK’s energy infrastructure.
Heseltine’s warning follows a separate report published earlier this week by accountants Ernst & Young, which drew a similar conclusion: that although investment in the UK energy sector in the past four years has been at a 20-year high, such levels will not be maintained without clear policy direction from government.
Heseltine acknowledged that prophecies made three years ago that the “lights would have gone out by now” without greater support for electricity suppliers have proved untrue. “This has not, however, avoided the problem. It has simply delayed,” he added.
His report cited regulator Ofgem’s forecast that over the next 10 to 15 years £200 billion of investment will be needed for new infrastructure to meet energy demand and meet our carbon reduction targets.
“For the country’s energy needs to be met, the Government needs a clear and consistent long term energy policy that indicates what our projected needs will be and how they will be met, by when and by whom,” the report said.
“These problems will not go away. Just as with major infrastructure projects, clear decisions are needed now.”
The report recommended government set out a “definitive and unambiguous” energy policy”, detailing the supporting financial regime, in order to give the sector the certainty it nees to invest.
The Department for Business said the government would respond to Heseltine's recommendations in due course.