The CBI has warned the Government it must set a clear direction on energy policy within six months or risk losing vital private sector investment in the sector.
In a new report published this morning, the group warns that uncertainty over the planning regime governing new infrastructure is stopping investors committing to new projects leaving £150bn in the balance.
Green energy generation and carbon capture have been identified as areas that could bring significant economic benefits to Yorkshire.
The CBI report comes just days after Yorkshire generator Drax complained a lack of clarity on regulations was hindering its plans to invest in biomass technology.
John Cridland, CBI deputy director-general, said: “The Government’s first few months in office have been rightly dominated by sorting out the fiscal deficit, but it must not let the timetable for energy and planning reform slip any further.
“Energy companies are unable to get the ball rolling on new infrastructure projects when it is unclear how the future planning regime will work.
“Uncertainty on plans for electricity market reform, slow progress on clean coal and nuclear power, as well as the cost of renewable energy are adding to the mood of caution among investors. We need investment from companies, not delays from government.”
The Government has indicated it will abolish the Infrastructure Planning Commission, a body set up by its predecessor to avoid planning delays such as those seen over the Heathrow Terminal 4 project. It will be replaced by a "major infrastructure unit" will be established with decision-making powers returned to Ministers.
By February 2011, the CBI wants to see the Government tackle delays in the planning system and provide more detail on electricity market reform and its renewable energy policy.