The U.K.’s search for 100 billion pounds ($127 billion) to maintain electricity supplies is likely to become tougher after the Conservative government lost its parliamentary majority in an election last week.
Prime Minister Theresa May, who is leading a minority government, will need to focus more than ever to get consensus from lawmakers on Britain’s exit from the European Union. That leaves little time for setting new policies that could bolster the case for investing in new energy infrastructure, industry officials said.
“There’s not going to be an energy policy,” Guy Madgwick, managing director of Northern Europe for wind turbine manufacturer Senvion SA, said in a phone interview. “It’s nowhere near the top of their list.”
With more than a dozen power plants due to close in the next decade, Britain’s grid is creaking under growing volumes of power from wind and solar farms. The government is also is under pressure to meet legislated targets to reduce fossil-fuel emissions. And those challenges won’t disappear during the debate over Brexit.
“We’re at a point in the U.K. where we probably need to redefine some of the targets and goals we want to achieve over the next 10 to 15 years for the whole of the energy sector,” said Keith Anderson, chief executive officer of ScottishPower Plc, a utility that’s also developing renewable-energy plants.
There’s already evidence that investment in Britain’s energy industry already has slowed as the government focused on fighting three separate campaigns with voters in the past three years, including general elections this year and 2015 and the Brexit referendum in 2016.
Investment in clean energy plunged in the first quarter after falling on an annual basis for the first time in six years last year, according to Bloomberg New Energy Finance. Developers are seeking certainty on how their payments will be structured after the U.K. leaves the EU, a move that may allow it to drop renewable energy targets for 2020 that have served as a guide to how policy will evolve.
Nuclear offers electricity without the greenhouse gases damaging the climate. But the financial woes of Toshiba Corp., the controlling stakeholder of a major atomic development at Moorside in Northwest England, leave doubts about the future of that plant. Labour has said it might back underwriting part of the 3.4-gigawatt atomic plant in order to spur private investors to take part, and unions are pushing for action.
“We need to have a proper energy policy,” said Justin Bowden, national secretary of the GMB union, in a phone interview. “We don’t have anything that could be reasonably called an energy policy in this country.”