ICE response to BEIS Committee on financing energy infrastructure

ICE’s State of the Nation 2018 report on infrastructure investment found that to continue encouraging the development of emerging technologies within the energy sector, Contracts for Difference (CfD) or equivalent initiatives should continue to be used in a targeted way.
The rationale that CfDs provide long term price stabilisation and enable investment to come forward at a lower cost of capital remains sound. ICE believes CfDs or similar models should remain a tool to increase supply, be extended to cover energy storage technology, and be considered as part of the future repurposing of the UK’s gas and heat networks.
The role of renewables in terms of meeting generation needs, carbon reduction targets and delivering value for money is becoming ever more prominent. The cost of renewables has fallen faster than many predictions and are expected to continue to fall as efficiencies are found and technology develops further.
Recent developments have shown that nuclear projects are complex to finance and have long lead-in times, but ICE believes nuclear is still required as part of a diverse energy mix to provide a degree of long-term baseload power. However, it is clear that the balance of the UK’s energy mix is shifting and there is an onus on the forthcoming energy White Paper to recognise this.