The UK needs £234bn to be spent on new low carbon energy infrastructure by 2025, according to consultants Ernst and Young.
And key to kick-starting that investment, according to EDF boss Vincent de Rivaz, is setting a floor price for carbon.
Mr De Rivaz told a conference last week: “A carbon floor price sends clear signals to investors in low carbon technologies that the UK is committed to a low carbon future – and its timely implementation is now key.”
He said the £234bn would need to be spent “across a broad range of low carbon industries” and added that while the new government had made “an encouraging start, its challenge now is to maintain momentum of public policy-making, providing a framework that will facilitate the timely delivery of our investment plans, and the plans of others”.
Mr de Rivaz, chief executive of EDF in the UK, said that plans for a green investment bank were “a step in the right direction”.
“Billions of pounds of capital is due to be invested right across the low carbon sector in the coming years. Models such as the green investment bank should be developed early in order that they may grow, helping to channel finance effectively.”
He said the private sector was also well placed to deliver collaborative finance models, and highlighted EDF’s French finance model, Exeltium. “It brings our largest customers together as a consortium to help secure future electricity prices whilst investing up-front in our major projects.
“Whilst the UK market is certainly different to France, we will be actively exploring a range of similarly innovative financing solutions.”
He also said the energy industry had to be “clear and realistic” about the economics of low carbon delivery. “As the government begins to set in train a series of austerity measures, there will be big questions about subsidies for energy technologies,” he said. “They will not work if they ultimately lead to increased costs for customers. They cannot be allowed to distort the low carbon energy market in the long term.
“A long term view of a stable, economic energy sector needs also to consider how a value can be placed on the provision of ‘secure and reliable’ generation capacity. An ‘energy only’ market, that is overly exposed to intermittent generation, with unabated fossil generation at its heart, may not be sustainable in the long term.”