A coalition of 13 investors, including Legal and General Investment Management, CCLA and the Church Commissioners, have written to the UK’s Chancellor of the Exchequer to express concerns over future renewables investment being put under risk by unsupportive government policy.
The letter, also sent to the UK’s Secretary of State for Energy and Climate Change, Amber Rudd, warns that recent policy announcements on renewable power threatens previously secure cash-flows in this area. It highlights the removal of the climate change levy exemption for renewable power and considerable cuts to subsidies for solar power. The letter says as the world heads towards climate negotiations in Paris the imperative to decarbonise the energy systems is growing and that a “low risk environment is important to ensure the cost of national infrastructure investment remains low”.
The investors call on the government to set out clearly how it intends to continue down the path of decarbonisation.
Simon Howard, Chief Executive of UKSIF, which convened the investors and is a signatory to the letter, said: “We support the government’s commitment to transitioning to a low-carbon economy while keeping consumer bills low. However, it is crucial that the government maintains the stable policy framework we have had over the past few years if it is to keep costs down and encourage investment in energy infrastructure. Sudden changes, like those being proposed, have serious consequences for companies and for investors.
The government is aiming to develop a new energy efficiency framework this autumn. Nick Molho, Executive Director of Aldersgate Group, said:
“The government has the opportunity in the coming months through the comprehensive spending review, thereview of energy efficiency policies and of the levy control framework to put in place long-term policy measures that will boost investment in energy efficiency and low-carbon power, heat and transport infrastructure. This investment is key to modernising our infrastructure and improving the productivity of our economy – the government must seize this opportunity.”
Signatories to the letter are:
Simon Howard, Chief Executive, UK Sustainable Investment and Finance Association
Lisa Ashford, CEO, Ethex
Matthew Clayton, Executive Director, Triodos Renewables
John David, Head of Rathbone Greenbank Investments, Rathbone Greenbank Investments
Paul Ellis, Chief Executive, Ecology Building Society
Julia Groves, Chief Executive, Trillion Fund
Karl Harder, Managing Director, Abundance Generation
Pierre Jameson, Chief Investment Officer, Church of England Pension Board
Tom Joy, Director of Investments, The Church Commissioners
George Latham, Managing Partner and Chief Investment Officer, WHEB Group
Karen McGrath, Head of Sustainability, Kempen Capital Management
Charles Middleton, Managing Director, Triodos Bank
Meryam Omi, Head of Sustainability, Legal and General Investment Management
Michael Quicke OBE, Chief Executive, CCLA