CBI urges 'clarity' on energy policy

Business needs a revamped, coherent energy strategy as key policy gaps could threaten the security of energy supplies in the future, the CBI said today.

The call for an energy strategy came as the Government considers "all the options" prior to a forthcoming review of the energy policy.

Publishing a paper, ‘Powering the Future’, the CBI said energy costs rising to uncompetitive levels, and concerns over gas supplies this Winter, had shot the issue of UK energy needs to the top of the business agenda.

The document identifies that a third of UK generating capacity, much of it nuclear, needs to be replaced by 2020 - in ways that maintain long-term security of supply, deliver prices that compare favourably with EU rivals, and fit with the UK's environmental aims.

The CBI has called on the Government to put a coherent energy policy in place as a matter of urgency, including a decision within a year on whether to back a new generation of nuclear power stations.

Sir Digby Jones, CBI Director-General, said: “The threat to companies of gas shortages and rising energy costs this winter has shot the issue of energy to the top of the business agenda.

“Risk is an accepted fact of business life. But what users and producers of energy need, as in any marketplace, is a clear framework that lets them manage that risk in the most effective way.

“One third of UK power generating capacity needs to be replaced by 2020. But without a coherent and integrated energy policy there is a risk that the billions of investment required will not come at the right time or at the most efficient cost.

“The challenges the government didn't tackle in its 2003 Energy White Paper have not gone away. The opportunity must now be seized - government must grasp the nettle and make some tough decisions. It has to govern for the whole country in the long term, and not just for the ideology of any one vested interest."

Sir Digby said: “A decision on the future of nuclear power has been allowed to drift too long. Potential investors and the British public both deserve certainty.

“Nuclear’s position as a reliable, low-carbon energy source is without doubt, but understandable concerns exist about costs and waste. The Prime Minister has rightly promised a comprehensive debate on the future of nuclear power. The government must now deliver positive leadership to increase public awareness and ensure public ownership of the outcome.”

(SP/KMcA)