CBI Warns: UK Needs Clear Framework for Energy Future

UK business group CBI (Confederation of British Industry) has called on the government to provide a clear framework and stable policy to ensure the future security of UK energy and power.

In an open letter to the government, published on the CBI's website on January 26, the industry body said that, as the way the country's economy is powered changes, the government needs to ensure the transition towards more renewable energies and lower-carbon fuels needs to be made affordable and secure for business and domestic bill-payers.

"UK industrial firms already pay higher electricity costs than EU competitors, and spare capacity on our grid is getting squeezed as we phase out older power stations," the letter says.

A clearer policy would also entail the simplification and a drastic change in current regulation, it also said. "[We] need an overhaul of complex regulations holding back investment in energy efficiency--so that the best intentions to support firms to reduce their energy use and carbon impact are not lost in bureaucratic ‘green tape’," the letter states.

The letter, co-signed by a number of prominent industry figures, including Ineos group director Tom Crotty and ScottishPower chief corporate officer Keith Anderson, says that investment is needed immediately to help ensure security of supply. That investment requires action from the government, the letter stresses.

"To unlock investment, we need a clear long-term framework – so companies can plan for construction projects that will last into the next decade," it says. "To ensure we are delivering new low carbon capacity at an affordable cost for consumers, we need to make sure the market is open to all technologies, including new onshore wind developments, where they have local support. We also need to make sure we are investing in the capacity of UK supply chains to build on our expertise in existing and future technologies, from offshore wind to carbon capture and storage."

Renewable energy is not the only energy source that needs to be secured, the letter said: "To ensure the shift to more intermittent renewable energy doesn’t affect security of supply for homes and businesses, we need to look at how we use technologies to help store electricity and manage peak-time demand, and support the development of new gas and nuclear capacity to help underpin our power grid."

The CBI is one of two industry bodies to point out this week the risk facing UK energy security. On the same day CBI's open letter was published, the Institution of Mechanical Engineers (IMechE) released a report that highlighted several challenges that will face the UK as electricity demand grows in the next decade.

Among those challenges are the "unrealistic" plans to bridge power supply-demand gaps by building combined-cycle gas turbine (CCGT) plants. IMechE said 30 CCGT plants would need to be built in the next 10 years to achieve current government aims, but in the past 10 years, only four have been completed. 

Erica Mills