Energy Bill

Kerry McCarthy Excerpts

Tuesday 4th June 2013 Commons Chamber

With a decision on nuclear still awaited and with fossil fuel generating investment at a standstill, it might be thought that money would pour into low-carbon renewables, but even there the picture is unclear. For example, according to new figures from Bloomberg, the flow of funds is actually slowing down. Doubts about whether a future Government will remain committed to supporting low-carbon technologies after 2020, fears that instead they will bet the farm on another dash for gas, and a lack of clarity about the level of strike prices to be proposed for the new contracts for difference regime have all unsettled investors. The only certain consequence of this is that investment will be slower and the risk of a capacity crisis greater.

[Kerry McCarthy (Bristol East) (Lab)]

What the hon. Gentleman has just said exactly echoes what businesses in my constituency are telling me. The lack of certainty and the suggestion that the Government will now delay setting targets until 2016 mean that businesses simply do not know within which parameters they are operating. They do not know whether they should go ahead and invest in the technology.

[Mr Yeo]

I agree with the hon. Lady and will develop that very point.

The element of perceived political risk is leading investors to seek higher returns from their investments in the UK energy market. Higher returns to investors mean higher prices for consumers. Amendment 11 directly addresses these issues. By itself, it would not immediately alter the low-carbon pathway on which the Government have already embarked, most notably in its acceptance of the fourth carbon budget. However, the prospect of the fourth carbon budget being watered down in next year’s review is simply another unwelcome uncertainty. The amendment would remove that uncertainty by requiring the Secretary of State to set, no later than 1 April 2014, a decarbonisation target for 2030 for electricity generation.