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Speed up energy reforms, CBI warns ministers

Key energy and planning reforms must be delivered by the Government within six months or it risks missing targets for reducing carbon emissions and improving energy security, business leaders will warn today.

Uncertainty about the planning regime is making investors wary of committing to new energy projects and possibly jeopardising supplies, the Confederation of British Industry (CBI) says.

Launching a report, No Time To Lose: Deciding Britain's Energy Future, the CBI says that without greater clarity, Britain risks missing out on as much as £150bn of private sector investment in low-carbon infrastructure As part of the report, the CBI is calling on the Government to tackle delays in planning systems, to speed up the development of carbon capture and storage technology, and to provide more detail on electricity market reform and its renewable energy policy.

The Government should have the measures in place by February next year, the lobby group adds. "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, the deputy director general of the CBI.

"Energy companies are unable to get the ball rolling on new infrastructure projects when it is unclear how the future planning regime will work. 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 CBI is not the first group to call on the coalition to speed up energy reforms. Last month, the Engineering Employers' Federation (EEF) said Britain faced an unprecedented combination of energy challenges over the next decade and needed to invest billions of pounds in infrastructure and manage the risks associated with growing dependence on imported gas.

Accepting that public money is unlikely to be forthcoming for what it describes as some of the most "ambitious and costly" targets in the world, the EEF, like the CBI, urged ministers to act to ensure planning permission and tax regimes facilitate private investment. "Government needs to demonstrate leadership in this critical area and we need to act fast," said Steve Radley, the EEF's director of policy.

The pressure from business groups comes just months after the then Conservative opposition sponsored a debate on energy security in the House of Commons. The then shadow Energy Secretary, Greg Clark, accused the Labour administration of "at least 10 years of drift" on energy policy, arguing that the UK is years behind other European countries.

Mr Clark argued that during normal weather, the UK had a maximum of 16 days of gas supplies in storage, compared with 120 days in France and 100 days in Germany. "Ofgem [the energy regulator] needs to decide whether we have enough storage capacity for the purpose of security. From recent statements, it would appear that it does not."

After the general election in May, the Liberal Democrat Chris Huhne was appointed Energy Secretary.