EY UK Energy blog

Energy investment unaffected by election

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Posted: Monday, 11 May 2015 at 3.30pm

The prospect of an energy policy framework that lacks any big surprises for the next five years should reinforce a sense of certainty and stability in the energy sector.

In their manifesto, the Conservative Party has committed to accepting the findings of the investigation currently being conducted by the Competition and Markets Authority (CMA), and believe that policy-makers should refrain from further significant market interventions in advance of these findings.

It is also worth noting that this will be the first time in 18 years that a Conservative Secretary of State will be heading up DECC (Department of Energy and Climate Change) and the UK’s future energy mix could now evolve along a differing path. The Conservative party manifesto was clear that there will be an end to new public subsidy for onshore windfarms, and a change in the law so that local people have the final say on windfarm applications. This could lead to a two speed system in the UK with regards to onshore wind, with Scotland and Wales pulling ahead of England in their development.

At the same time, further support for the establishment of a shale gas industry in the UK could be expected alongside the fiscal reform to support the North Sea that was announced in March’s Budget.

Finally, the big investment decisions, such as the investment in off-shore wind or Hinkley Point, were not likely to be dependent on the outcome of this election. However, investors will be looking to see the delivery of the anticipated consistency around infrastructure policy and financing before they turn their intentions into reality.

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