Government warned that investors could pull plug on green energy

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http://news.yahoo.com/uk-government-warned-investors-could-pull-plug-green-151244304--finance.html

Reuters – 12 hrs ago

LONDON/PARIS (Reuters) - A group of seven multinational companies has told the British government that they could halt their investment in the UK green energy sector if state support for renewable energy wanes.

Britain is the world's biggest offshore wind market in terms of capacity and has attracted interest from global players in the sector. But recent disputes within the coalition government over state support for the sector has caused them concern about the risk of a political U-turn against green energy.

The seven big investors, including wind turbine producers Vestas and Gamesa, told the Secretary of State for Energy in a letter seen by Reuters that they could take their money elsewhere if they feel that the risk of the government turning its back on renewable energy is too great.

"Historically the UK has benefited from being known as a country with low political risk for energy sector investments. Undermining that reputation would have damaging consequences for the scale of future investments in the UK energy sector," the companies said in the letter, a copy of which was also sent to Prime Minister David Cameron and finance minister George Osborne.

The group, which also includes Alstom, Doosan, Areva, Siemens and Mitsubishi Power Systems Europe, said that such investments depended on a stable policy framework because large-scale energy projects take a long time to build.

Osborne on Monday gave a boost to Britain's shale gas industry by offering hope of tax relief on such wells, a move that environmental groups say goes against the government's promise to be the greenest ever.

Wind turbine manufacturers GE Energy and Vestas have already backtracked on setting up production facilities in Britain, showing that appetite for UK-based manufacturing was lower than the government expected.

Britain has one of Europe's most ambitious wind power development targets, with a projected annual capacity growth rate of 13 percent until 2020, requiring huge investment for new plants.

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UK 'at risk of electricity blackouts by 2015' due to EU's green laws and power station closuresBy Adrian Lowery and Peter Campbell

PUBLISHED: 08:19 EST, 5 October 2012 | UPDATED: 08:27 EST, 6 October 2012

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Britain will soon be at serious risk of letting the lights go out, the energy watchdog warned today, as it forecast a possible electricity supply shortfall within three years.

Rigid European Union environmental laws and the closure of oil and coal power stations are cutting off supplies and slashing spare capacity in the UK power system, an Ofgem report said.

The regulator predicted that by 2015/16 there will be just a 4 per cent buffer in UK energy supplies, compared to the current level of 14 per cent spare capacity.

Read more: http://www.thisismoney.co.uk/money/news/article-2213391/Britain-faces-possible-blackouts-higher-electricity-prices-2015-Ofgem-report-warns.html#ixzz28mq1DjOU

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The report warned that there ‘will be a significant reduction in electricity supplies from coal and oil plants over the period, primarily driven by closures required by European environmental legislation’.

The most damaging piece of EU ‘green tape’, industry insiders say, is a 2001 measure designed to limit emissions for older power stations. The Large Combustion Plant Directive forces all coal or oil-fired power plants built before 1987 to install expensive emissions-reducing equipment or face closure by 2015.

It was spawned out of the Brussels obsession with weaning all European countries off coal power. But because of Britain’s rich mining heritage, it is a measure that hits the UK harder than any other EU member. Nine of the UK’s coal and oil-fired power stations are destined to shut by 2015. This represents about 15 per cent of the UK’s total generating capacity. This would leave Britain dependent on imported gas – which comes with a notoriously volatile price tag.