Energy professionals fear a combination of Brexit and uncertainty over the future of energy and climate policy is hampering the sector’s development and increasing the chances of the UK missing its emissions reduction targets.
That is the conclusion of a survey of nearly 500 executives undertaken by professional body the Energy Institute (EI), which warns Ministers urgently need to clarify the UK’s post-Brexit plans and bring forward the long-awaited Clean Growth Plan.
The survey reveals a majority of respondents regard Brexit as a cause for “material concern” over the potential impact on the energy system, while 60 per cent fear a curtailment of freedom of movement will impact the availability of skilled workers.
The group called on the government to seek continued close co-operation with the EU single energy market, and a majority of respondents called on Ministers to transfer key EU energy and climate change directives into UK law – including on renewables, energy performance of buildings, vehicle emissions and civil nuclear.
However, EI said opinion is more divided on whether the EU Emission Trading System or state aid rules should be retained.
The barometer also revealed that nearly eight out of ten respondents believe the UK will fall short of meeting the fifth carbon budget, which requires emissions to be 57 per cent lower than 1990 levels by 2030.
However, there was a more optimistic assessment of President Trump’s decision to exit the Paris Agreement with only a quarter saying it represents a significant threat to achieving the accord’s 2C target.
EI President, Professor Jim Skea, said the energy industry urgently required clarity on both the government’s Brexit and decarbonisation plans.
“The call for a predictable, no-surprises policy is reinforced in the 2017 Energy Barometer with clear advice to those negotiating Brexit,” he said. “Workforce availability and the smooth transition of energy and climate change laws need to be priorities.The Barometer also reflects the need for ministers to bring forward a credible Clean Growth Plan to demonstrate how they intend to course-correct the UK’s emission reduction efforts. On the basis of current policies, the fifth carbon budget is seen by energy professionals as elusive.”
His comments were echoed by EI vice president and former National Grid CEO Steve Holliday who warned that “the stakes are high for the UK’s energy economy”.
“The potential is there for significant industrial benefit and emission reduction at least cost to consumers and taxpayers, but sound policy making should not be drowned out by Brexit or other political upheavals,” he said. “Energy professionals’ advice could not be stronger on putting energy efficiency at the heart of the government’s strategy. The benefits of energy efficiency stack up for emission reduction, energy security, industrial growth and affordability.”
The government is understood to be considering ambitious new plans on energy efficiency as part of the Clean Growth Plan, and the Conservative Party manifesto included proposals for a new industrial energy efficiency scheme. However, neither initiative made it into last week’s Queen’s Speech.
Meanwhile, green groups are increasingly frustrated over the delay to the Clean Growth Plan with speculation mounting the government could face a legal challenge if it is not published in the coming months.
Industry insiders have repeatedly warned that without clarity on clean energy policies and financial support beyond 2020 the pipeline of low carbon infrastructure projects risks contracting sharply over the next few years.
The Department for Business, Energy and Industrial Strategy was considering a response to the report at the time of going to press.