Ernst & Young – UK energy investment too slow to meet targets

The UK’s energy sector needs to accelerate its rate of infrastructure investment by around a quarter if the country wants to meet legally-binding climate targets, said consultancy Ernst and Young.

To meet carbon emission reduction targets – 34% below 1990 levels by 2020 – and increase the share of renewable generation to 15%, the power and gas sector needs at least GBP15bn annually until 2025.

Present levels of investment – GBP8.5bn in 2010 and forecast GBP11bn for this year – fall considerably short of this target. “This current level of investment will need to be materially increased over the next 15 years (…) as it is not yet sufficient to meet the UK’s objectives,” Ernst & Young said in its report.

The consultancy expects less than a quarter of this investment to go conventional energy resources with the majority of the GBP250bn total investment to be allocated to carbon capture and storage technology, renewable energy and energy efficiency. Around GBP35bn will be spent on nuclear power.