Source · Select Committees · Public Accounts Committee
Recommendation 12
12
Accepted
Inconsistent government energy policy undermines investor confidence and hinders decarbonisation progress
Conclusion
More generally, changes in policy direction can affect investor confidence in government.36 Energy policy instability, such as the stop-start nature of some initiatives like the Green Homes Grant Voucher Scheme, which was extended and then abruptly closed, have eroded investor confidence in government.37 In March 2022 we highlighted that, in this Committee’s recent reports into Achieving Net Zero (HC 935), Environmental tax measures (HC 937), Low emission cars (HC 186) and the Green Homes Grant Voucher Scheme (HC 635), government has too often pursued stop-start strategies which undermine confidence for business, investors and consumers.38 30 Q 32 31 Qq 39–40 32 Q 59 33 Q 57–8 34 DPS0018 35 HC Committee of Public Accounts, Carbon Capture and Storage, Sixty-fourth Report of Session 2016–17, HC 1036, April 2017 36 C&AG’s Report, para 11 37 Qq 34, 88; HC Committee of Public Accounts, Green Homes Grant Voucher Scheme, Twenty-Seventh Report of Session 2021–22, HC 635, December 2021 38 HC Committee of Public Accounts, Achieving Net Zero: Follow up; Forty-First Report of Session 2021–22, HC 642, March 2022 12 Decarbonising the power sector Government collaborating to achieve its ambition
Government Response Summary
The government agrees with the committee's observation and has published the 2023 Green Finance Strategy, Net Zero Growth Plan, and Energy Security Plan to provide clarity and encourage investment. These plans include £20 billion for CCUS, annual Contracts for Difference rounds, and sector-specific investment roadmaps.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 3.2 The department recognises the importance of giving clarity to the private sector to encourage investment. Earlier this year the government published Mobilising Green Investment: the 2023 Green Finance Strategy, alongside the Powering Up Britain: the Net Zero Growth Plan and Powering up Britain: the Energy Security Plan. 3.3 The Green Finance Strategy provides clarity on pathways for investment across net zero, and communicates to businesses, investors and the finance sector the UK’s plan to grow investment. These publications set out plans to grow green investment across all parts of the UK, which include providing up to £20 billion funding for early deployment of Carbon Capture, Usage and Storage, and launching the fifth Contracts for Difference allocation round, the first round to run on an annual basis. These provide investor clarity on the government’s overall approach to enhance our country’s energy security, seize the economic opportunities of the transition, and deliver on our net zero commitments. 3.4 In addition, the department is also communicating more detailed investment needs and opportunities on a sector-by-sector basis. In March 2023 it published the Offshore Wind Net Zero Investment Roadmap, the Heat Pump Net Zero Investment Roadmap, and the Hydrogen Net Zero Investment Roadmap, as well as an updated version of the Carbon Capture Usage and Storage Investment Roadmap. The department considers that this is an appropriate way to provide detail relevant to particular groups of investors and plans to publish further roadmaps for other sectors that need private sector investment later in 2023.