Investors in Britain’s energy infrastructure are cutting their losses and pulling out of projects. The government’s strategy needs a rethink, says Simon Wilson. The basic issue is that the UK’s 2013 review of its strategic energy policy has aged badly. Then, it was believed energy costs and demand would rise inexorably, creating a security issue for countries (such as Britain) that are net importers. As a result, the UK government gave the go-ahead for projects delivering super-expensive supplies (such as Hinkley). In fact, demand is falling thanks to efficiency gains and new technology, and the cost of all forms of energy supply – with the glaring exception of nuclear – has fallen sharply since 2013. From oil and gas to renewables (wind and solar), technological advances have increased the opportunities for cost-effective exploitation and supply. As business secretary Greg Clark put it last week, “the economics of the energy market have changed significantly in recent years”.
Money Week 26th Jan 2019 read more »