UK's energy sustainability rating downgraded amid concerns over future supply


The UK has seen its top rating for energy supplies downgraded in an international assessment, amid uncertainty over Government policy.

The World Energy Council's annual "trilemma" index, which looks at how 130 countries are meeting the triple challenge of ensuring secure, affordable and sustainable energy supplies, has revised the UK's AAA rating of previous years to an AAB grade.

The trilemma report said the UK's ranking had slipped as electricity became comparatively more expensive, although its security of supplies and environmental performance remained stable.

The UK is still a leader on energy, and is in fourth place in the overall rankings behind Switzerland, Sweden and Norway, but it remains on a "watch list" it was put on last year over concerns about how it will secure its future energy supply.

The report warned that the UK faced declining domestic fossil fuel production, the running down of nuclear plants and the closure of coal-powered stations, alongside ageing infrastructure - meaning its ranking is set to fall in future assessments.

In addition, the report warned that recent "unexpected" moves by the Government to remove subsidies for wind and solar power would hinder investment in the sectors and hit the UK's goal to diversify its energy supply and help the environment.

It urged the Government to ensure consistent policy to secure and maintain investments while reforms to the energy system are being implemented.

Ministers have faced criticism from across the board over a raft of announcements since the general election which have curbed support for renewables and reversed measures to boost energy efficiency. 

Executive chairwoman of the World Energy Trilemma study, Joan MacNaughton, said: "If the UK is to remain ahead of the pack and regain its triple A rating, the Government must give more predictability to investors in the way the electricity market reforms are progressed."

She said more transparency was needed about the future approach to the "contracts for difference" process for delivering subsidies to low-carbon power and the Treasury-imposed cap for the total spending from consumer bills on green measures.

Despite the concerns, the UK continues to lead most European countries on dealing with the energy trilemma.

But the best-performing nations tend to be developed countries with higher shares of energy coming from low or zero carbon sources, supported by well-established energy efficiency programmes.

Unlike most other "pack leaders", the UK still relies on fossil fuels for 69% of its electricity fuel mix, the report said.

Ahead of UN talks in Paris aimed at securing a new deal on climate change, the World Energy Council also said a clear climate framework and a global target for emissions reductions was needed to drive the trillions of dollars of investment required for energy infrastructure.

A spokesman for the Department of Energy and Climate Change insisted the UK was still a world leader for energy.

He said: "We've made record investments in renewables and are committed to lower-carbon secure energy, such as nuclear and shale gas, which will help keep the lights on for future generations."