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Wednesday 25 April 2018
25 April 2018 - NEWS UPDATE
Renewable Energy

Political meddling is damaging UK’s low-carbon energy drive, CBI warns

Short-term thinking is distorting the debate on the UK’s energy future, risking investment and opportunity, a conference of business leaders and politicians will be told today.

CBI Deputy Director-General Katja Hall will tell the organisation’s Energy Conference in London that political interference is damaging long-term investor confidence in programmes like onshore wind energy.

In her speech, she describes the UK’s energy strategy as like “a game of snakes and ladders”, when the “political climate heats up” businesses find themselves in the firing line and feel back at square one.

Today’s gathering to debate the future direction of UK energy policy, was told a new CBI poll of over 550 business leaders and 2,300 households, businesses rate security of supply as a crucial energy objective for the UK, with 73% citing it as very important.

Over half of businesses (57%) also think the UK’s energy security is worse than it was five years ago, reflecting that capacity margins are likely to hit a low next winter.

Businesses and households are concerned about keeping energy bills affordable (96% of businesses and 94% of households rating this as important or very important). And both groups support the UK’s aim to tackle climate change (70% of businesses and 76% of households rating this as important or very important).

In her speech, Katja Hall, will say: “The outcome we all want to see is politicians, investors, business users and consumers finding common ground – working together to tackle our energy and climate change objectives.

“Long-term certainty is needed but just as policies start to click into place, the political climate heats up again. It feels like a game of snakes and ladders.

“One careless comment or populist proposal – whether we’re talking about cutting support for onshore wind farms or freezing energy prices – can make businesses feel like they’re right back at square one.

“For investors, this is a real worry. And when that investment can go anywhere in the world, it should be a real worry for politicians too.”

While 60% of business leaders and 56% of households believe that taking action now to cut carbon emissions will deliver long-term economic opportunity, one in three businesses disagree (32%), and nearly one in four consumers are unsure (23%), suggesting more must be done to communicate the importance of, and opportunity presented by, the low-carbon transition.

Businesses and households also believe energy company profits are a key reason for energy price rises (53% of business leaders and 61% of consumers citing this as the main reason for energy price rises), perhaps indicating a lack of trust in the market. Profits accounted for only 4.3% of an average bill in 2012.

Hall will say: “We must inject long-term thinking into this debate. We need an honest conversation about future bills and how to support businesses and consumers in managing them.

“People don’t necessarily get how our energy objectives relate to each other, let alone how they relate to the bills they pay each quarter, leading to a lot of misunderstanding and mistrust.

“With profits very much under the spotlight, it’s important to remember that companies need to make a fair return in order to make the investments we so desperately need. But it’s right to demonstrate to consumers that there is nothing to hide.”

Both business leaders (47%) and consumers (38%) think that more competition in the market is the best way to keep future bills down. After this, 38% of businesses and 35% of consumers cited energy efficiency as the best solution to ensuring energy costs remain affordable.

Ms Hall adds: “Energy efficiency has for too long been the poor relation in this debate. We need investment in supply but this must be combined with a renewed push to cut our energy usage.

“To date, we have over-promised and under-delivered. Energy efficiency needs to move up the rankings and be seen as a critical investment.”

The conference will also be told that British businesses that are serious about cutting their carbon emissions and supporting the shift to a low-carbon economy, should consider switching to a renewable electricity supplier.

Juliet Davenport, founder and CEO of Good Energy, will cite a league table published today, which compares the fuel mix of large and smaller electricity suppliers. Good Energy tops the list, being the only company to offer a 100% renewable fuel mix – with electricity supplied only from British sun, wind and rain.

Juliet Davenport will say: “Businesses that are serious about moving to a low-carbon model should consider switching their business electricity supply. Emissions from electricity are a major contributor to climate change, as well as to a business’s own carbon footprint.

“My message to business leaders here today is to lead by example by switching to a cleaner, greener supplier that is competitively priced.

“Not only will this reduce your business emissions, but it could help you to broaden your customer base, increase your brand value and boost competitive advantage. Green electricity tariffs are a golden opportunity for businesses.”

Davenport added: “Big business could take the lead in helping to decarbonise the energy sector. We need to reduce our exposure to volatile international fossil fuel markets. And businesses want price stability and predictability. Investment in renewables will help deliver this and one obvious step for businesses that want a more secure and stable energy future is to switch to renewable electricity.”

Good Energy already supplies electricity to around 3,000 business customers, including Pets Corner and Supergroup Plc, the parent company of the fashion brand Superdry.

Toby Abbott, corporate responsibility manager at SuperGroup Plc, said: “Good Energy supply renewable electricity to over 100 Superdry retail stores and office buildings in the UK.

“SuperGroup believe in renewable and low carbon technologies as part of a competitive UK energy market. Good Energy provides one such solution and we support their development of renewable energy infrastructure in the UK.”

Dean Richmond, managing director of Pets Corner, said: “Reducing CO2 isn’t difficult; in fact switching to Good Energy was the easiest supplier change I’ve ever done. British businesses need to be woken up by their customers into reducing their energy consumption and using renewable energy.”
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