Energy Minister denies investor confidence in clean energy has been rocked by Brexit vote, insisting energy policy will not change once UK has left the EU
Energy Minister Andrea Leadsom has today insisted Britain's exit from the EU will not impact the country's energy policies, dismissing concerns the vote's outcome has already dented investor confidence in the clean energy sector.
Speaking to MPs on the Energy and Climate Change (ECC) Select Committee this morning, Leadsom rejected claims that both Siemens and DONG Energy are concerned about investing in the UK given the current political climate.
Yesterday Siemens announced plans to freeze new investment in the UK's wind sector following the outcome of the EU referendum vote, although the firm's new manufacturing base in Hull will not be affected by the decision. Meanwhile, DONG Energy has said it awaits "further clarity" over the implications of the result.
Leadsom, who was a prominent member of the Leave campaign, insisted both companies remain confident in the UK's investment climate, highlighting Siemens' continued commitment to its £350m Hull factory. She also pointed to news yesterday DONG Energy plans to invest around £60m in the first commercial scale power plant to use enzymes to clean household waste, creating a slurry that can be turned into gas for power generation.
"I do not see that DONG and Siemens are very concerned, I don't agree with your assertion," Leadsom told ECC Chair and SNP MP Angus Macneil. "I've just said that Siemens have a superb new plant in the Humber and DONG have just announced a new investment. I do speak with those developers and I don't agree with your assertion that their confidence is extremely low."
However, fears are circulating that the result of the referendum vote will further dent investor confidence in the UK renewables sector, following a turbulent year that has seen the sector rocked by a series of subsidy shake-ups. The UK's attractiveness as a destination for renewable energy investment had already reached an all-time low ahead of the Brexit vote, according to the latest report published in May by consultancy EY.
Investors are now concerned a period of political and policy instability could push up the price of capital and impact a raft of projects that are likely to be affected by unanswered questions over whether the UK will retain access to the EU energy union, whether EU renewables targets will still apply, and whether the UK will continue to operate within the EU emissions trading scheme (ETS).
But Leadsom said although the recent changes to clean energy subsidy regimes may have been difficult for investors, firms can now feel confident about future government policy on renewables. "I think investors now should feel they have a very clear path ahead," she said. "I absolutely recognise that the period of time taken to get the costs back under control, get the budgets back under control was an unfortunate period for investors, but I do believe there is a very clear way ahead."
It is an assessment that is likely to be disputed by some in the renewables industry, who insist it remains unclear whether mature onshore renewable technologies such as onshore wind and solar farms will be provided with a route to market.
During the hearing Leadsom also insisted UK energy policy would not change as a result of the referendum result. Echoing comments from Energy and Climate Change Secretary Amber Rudd this morning, Leadsom said the Climate Change Act secures the UK's long term low-carbon ambitions, and insisted Britain would continue to co-operate internationally with the EU and others on tackling climate change.
"In my view, as I was always very clear all the way through the campaign, in energy policy I don't believe anything will change," she said. "Our energy trilemma remains the same. We are committed to keeping the lights on, we are committed to decarbonisation at the lowest cost to consumers."
