Updated – CBI urges government to end energy policy confusion

Lobbying group the Confederation of British Industry (CBI) is today calling on the government to get its energy house in order, after warning that uncertainty about proposed policy reforms is stalling up to £150bn of private sector low-carbon investment.

The CBI said that uncertainty about the planning regime in particular is making investors wary of committing to new low-carbon energy projects.

It also warned that unless the government delivers key energy and planning reforms within six months, it could undermine emissions targets and energy security.

Launching a new report, entitled No time to lose: Deciding Britain's energy future, the business group warned that the £150bn private sector investment that is currently in the pipeline is essential for the UK to achieve a secure, sustainable and cost-effective energy mix that includes renewable sources, nuclear power and fossil fuels.

The report argues that the government should aim to clarify its energy plans by the end of February 2011, providing detailed guidance on how it intends to tackle delays in the planning system, speed up the development of carbon capture and storage technology, reform electricity markets, accelerate the rollout of renewable energy technologies and deliver its promised emissions performance standard for power plants.

"The government's first few months in office have been rightly dominated by sorting out the fiscal deficit, but it must not let the timetable for energy and planning reform slip any further," said John Cridland, CBI Deputy Director-General.

He added that the on-going uncertainty was having a direct impact on energy infrastructure projects.

"Energy companies are unable to get the ball rolling on new infrastructure projects when it is unclear how the future planning regime will work," he said. "Uncertainty on plans for electricity market reform, slow progress on clean coal and nuclear power, as well as the cost of renewable energy are adding to the mood of caution among investors. We need investment from companies, not delays from government."

The government has already announced it will abolish the Infrastructure Planning Commission and replace it with a major infrastructure unit with decision-making powers returned to Ministers.