Iberdrola chief urges UK to act on energy gap

City Editor

Wednesday 19 September 2012

THE UK needs to act urgently to ensure there is no "energy gap", Ignacio Galan, chairman of ScottishPower owner Iberdrola has warned, as he noted that a quarter of its existing power plants will go out of service by 2020.

Custom byline text:

TIM SHARP CITY EDITOR

Mr Galan heaped praise on the Government's recent decision about support for renewable energy up until 2017 and said that stable regulation in the UK is helping it attract investment.

But he signalled unease at the Spanish utility about the lack of a framework for generation, notably for nuclear and gas-fired plants, in UK after this point.

He said: "It would be desirable to define as soon as possible the post-2017 scenario due to the long maturity period of these investments."The UK now faces the need to make urgent decisions in order to avoid a potential energy gap," he added.He called for electricity market reform to be finalised and for construction of new plants to be given quicker approval.Iberdrola is planning to invest £12 billion in the UK in the next decade, including backing several major offshore wind projects.It is also involved in the construction of new nuclear plants through its NuGen joint venture with France's GDF Suez.But there is still a great deal of uncertainty about what support, if any, these new plants will receive.Nevertheless, Mr Galan said he believed the UK and US, and several emerging markets are attracting investment that would go to eurozone countries if their energy markets were better run.Mr Galan wants increased interconnections between countries, harmonised tax policies and liberalised tariffs to encourage investment and criticised policies favouring solar power."In order to achieve all this, the (European) Union should also work towards the creation of a single regulator with sufficient authority to ensure that the harmonisation becomes a reality", he said."Europe still depends heavily on energy imports and, on top of that, new sources of energy in other countries, like shale gas, are changing the exchange flows of energy at a global level and are improving the competitiveness of other economies," Mr Galan added."The lack of clear energy policy in the Eurozone, added to uncertainty of member states' regulatory frameworks, is moving investors into the US, UK and into some emerg-ing countries," he said, noting that "the electricity industry is very sensitive to the cost of capital, especially at these times when scarcity of funds is driving the cost up."He criticised some European countries for backing "immature" sun energy technologies.He claimed these policies are hurting traditional companies that produce energy more cheaply, by cutting their market share and revenues.

Contextual targeting label:

Home and Garden

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

Iberdrola chief urges UK to act on energy gap

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED