Green energy groups have warned that Rishi Sunak’s rollback on green energy policy places jobs and investor confidence at risk.
Charge UK, which represents providers of EV charging services like Shell, BP, TotalEnetgies and SSE, said: “Today’s extremely worrying news is not consistent with economic stability of confidence.
“It will compromise the entire industry, and place jobs and consumer and investor confidence at risk”.
The Prime Minister is reportedly considering deferring, by five years, a ban on the sale of diesel and petrol cars, and weakening the phase out gas boilers.
Firms like BP and Shell are planning to spend billions on EV charging networks in the UK.
Rishi Sunak’s planned announcement is latest in a series of issues which the market has said to be harming the UK’s green credentials, including a recent failure to attract offshore wind developers in this month’s CfD auction round, and a commitment to “hundreds” of new North Sea licences.
Charge UK added: “Government will penalise individual drivers who are doing the right thing. More and more people are making the transition to electric vehicles, as they have been encouraged to do. They are entitled to expect government to keep its promises and continue to support the roll out of charging infrastructure across the UK.”
The policy rollbacks come while the UK remains without an answer to the United States’ Inflation Reduction Act (IRA), a mammoth green energy spending package introduced over a year ago.
Trade body Hydrogen UK said: “We are concerned last night’s reports may damage investor confidence further. In order to compete globally, UK industry and investors need a clear Government commitment to the industry.”
That’s after the group’s recent Hydrogen International Progress Index showed the UK slowing progress significantly compared with other economies.
Sam Hollister, head of economics and finance at LCP Delta, said; “The Government is paying no regard to the investment needed to meet net zero, with the latest announcements another nail in the coffin that could see investors take flight to other markets.
“Weeks after a CfD auction which failed to attract investment in offshore wind, and still no answer to the US’s Inflation Reduction Act, today’s rumours will act as another signal to investors that the UK’s commitments and plans for net zero are not guaranteed.”
Mr Hollister said LCP Delta’s data shows the UK will need billions to meet net zero – and delays will increase the cost further.
“An increase of just 1% WACC (Weighted Average Cost of Capital) will increase the cost of delivering the power generation infrastructure to meet net zero by £35bn, and this quickly increases to £75bn if the cost of capital increases by 2%.”
Playing politics
Rishi Sunak is seen as using green policy as a battleground for the next election, expected in 2024, while the Conservatives trail Labour in the polls by near double-digits.
It’s in response to criticism the prime minister has been timid as a political leader.
However, the move has produced backlash from within his own party, as well as industry, with former COP26 president Alok Sharma saying it will “not help economically or electorally”.
A delay to the ban of petrol or diesel cars would dent automakers’ investment to electric vehicles in Britain.
Dr Nina Skorupska, chief executive of the Association for Renewable Energy and Clean Technology said: “If confirmed, delays to both the ban on the sales of new petrol and diesel cars and the phasing out of gas boilers will extend the countries reliance on expensive fossil fuels.
“It also risks undermining the millions of pounds of investments that have already been made based on the understanding that Government is committed to seeing strong markets for EVs, heat pumps, biomass boilers, and other renewable technologies, in place by the 2030s.
“A reversal on these targets damages the opportunities these sectors are set to provide to the UK, both in terms of growth and jobs, while making the overall energy transition more expensive.”
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