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Ministers Challenged Over Green Energy Policy

Plans for green energy are under threat of losing investment because of confused Government policy, some of Britain's best known companies have warned.

Fears have been voiced after it emerged letters have been sent to Chancellor George Osborne over the perceived mixed policy signals from the coalition.

A letter from seven global power technology companies was handed last Thursday to Liberal Democrat Energy Secretary Ed Davey and copied to both the Chancellor and Prime Minister David Cameron.

The letter was signed by Siemens (BSE: SIEMENS.BO - news) , Alstom UK, Mitsubishi Power Systems, Areva (Berlin: A9R.BE - news) , Doosan (KSE: 000150.KS - news) , Gamesa (Other OTC: GCTAF.PK - news) and Vestas.

It urged the Government to be decisive in supporting an energy policy that diversifies into renewables and gas in a more concerted way.

The latest battle over energy policy was ignited when Mr Davey saw off Tory calls for significant cuts to onshore wind farm subsidies - at the price of support for gas up to and beyond 2030.

The Government's climate advisers have warned support for future gas plants without technology fitted to cut emissions is not compatible with climate change legislation and is harming investment in low-carbon power such as renewables and nuclear.

A second letter was sent by major businesses including Asda (NYSE: WMT - news) , Aviva (LSE: AV.L - news) , British American Tobacco, EDF (Paris: FR0010242511 - news) , Microsoft (NasdaqGS: MSFT - news) , Marks & Spencer (Dusseldorf: MA6.DU - news) , PepsiCo (NYSE: PEP - news) , Philips (Amsterdam: PHIA.AS - news) , the Co-operative and BSkyB (LSE: BSY.L - news) , the parent company of Sky News.

It urged the Government to set a target to slash carbon emissions and help stimulate investment that will drive growth.

Companies and investors have joined with trade unions, environmental groups and industry bodies to warn Mr Osborne that support for gas power into the 2030's is undermining investment in UK electricity infrastructure.

Peter Young, chairman of the Aldersgate Group, which co-ordinated the move, said: "The message of this letter is loud and clear - we must put an end to any political uncertainty surrounding the UK's energy future and start unleashing the billions of pounds of overdue investment which will deliver new growth for our economy."

Andy Atkins, executive director at Friends of the Earth, said the Chancellor's support for gas power was looking "increasingly isolated".

"The Liberal Democrats, Labour and leading firms are lining up against the Chancellor because they recognise the urgent need to decarbonise our power sector and seize the huge opportunities from embracing the Green Economy," Mr Atkins said.

"David Cameron must stop the Chancellor's dash for gas that would send the economy and our environment hurtling in the wrong direction."

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