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IPFS News Link • United Kingdom

Who Will Now Invest £100 Billion to Keep Britain's Lights On?

• http://www.bloomberg.com

As if managing the Brexit crisis weren't enough, the U.K. government also needs to find 100 billion pounds ($132 billion) to keep the lights on nationwide after 2020.

With more than a dozen power plants due to close in the next decade, Prime Minister David Cameron's government has been working to lay out incentives that will draw in money for new electricity infrastructure. Finding that investment will be made more difficult by voters' decision to leave the European Union, said Fatih Birol, executive director of the International Energy Agency.

"Decision makers don't like uncertainties, especially in the economic outlook," Birol said in an interview in London. "The U.K.'s electricity system is one of the oldest in the world. It's aging very quickly, and we need to bring in new capacity."

There's already evidence of investors rethinking British projects. Vattenfall AB, which is planning a 5.5 billion-pound wind farm off England's east coast, said it's reassessing the risk of working in the U.K. PensionDanmark A/S, which also is funding energy projects in Britain, has said it would lose interest in new deals if the U.K. voted to leave.

That's unsettling for the government's effort to attract the 100 billion pounds it says is needed for energy infrastructure by the end of this decade. Already, the U.K. is facing the risk of price spikes this winter after a number of plants finish their life in service, according to Deutsche Bank AG analyst James Brand. As much as 7 gigawatts of closures were announced for 2016, equivalent to 11 percent of U.K. peak demand.