* Internal government disputes cause investor concern
* Political trust needed for commitment to large projects
LONDON/PARIS, Oct 8 (Reuters) - A group of seven multinational companies has told the British government that they could halt their investment in the UK green energy sector if state support for renewable energy wanes.
Britain is the world’s biggest offshore wind market in terms of capacity and has attracted interest from global players in the sector. But recent disputes within the coalition government over support for the sector has caused them concern about the risk of a political U-turn against green energy.
The seven big investors, including wind turbine producers Vestas and Gamesa, told the Secretary of State for Energy in a letter seen by Reuters that they could take their money elsewhere if they feel that the risk of the government turning its back on renewable energy is too great.
“Historically the UK has benefited from being known as a country with low political risk for energy sector investments. Undermining that reputation would have damaging consequences for the scale of future investments in the UK energy sector,” the companies said in the letter, a copy of which was also sent to Prime Minister David Cameron and finance minister George Osborne.
The group, which also includes Alstom, Doosan , Areva, Siemens and Mitsubishi Power Systems Europe, said that such investments depended on a stable policy framework because large-scale energy projects take a long time to build.
Osborne on Monday gave a boost to Britain’s shale gas industry by offering hope of tax relief on such wells, a move that environmental groups say goes against the government’s promise to be the greenest ever.
Wind turbine manufacturers GE Energy and Vestas have already backtracked on setting up production facilities in Britain, showing that appetite for UK-based manufacturing was lower than the government expected.
Britain has one of Europe’s most ambitious wind power development targets, with a projected annual capacity growth rate of 13 percent until 2020, requiring huge investment for new plants.