Ministers fear that sudden cuts to British energy subsidies could be concerning to investors, which may put a risk premium on clean energy investments, and ultimately lead to higher energy bills for consumers. This fear seems justified when The Energy and Climate Change Committee stated: “In the light of recent changes to support (renewable energy) mechanisms, we perceive that there is now increased policy risk and therefore require a higher premium to compensate for this risk." Schroders Investment Management has urged the government to produce a long-term plan to replace the previous subsidy regime, which was scrapped due to being too complex.
Ministers fear that sudden cuts to British energy subsidies could be concerning to investors, which may put a risk premium on clean energy investments, and ultimately lead to higher energy bills for consumers. This fear seems justified when Schroders Investment Management stated: “In the light of recent changes to support (renewable energy) mechanisms, we perceive that there is now increased policy risk and therefore require a higher premium to compensate for this risk." The Energy and Climate Change Committee has urged the government to produce a long-term plan to replace the previous subsidy regime, which was scrapped due to being too complex.