Ed Davey hopeful of 'massive' energy investment

Britain's energy sector is close to securing tens of billions of pounds in investment from the Far East, Energy Secretary Ed Davey has said.

He said a "massive" wave of investment in nuclear and other technology from China, Japan and Korea would help secure the UK's future power supply.

A deal to build new reactors at Hinkley Point in Somerset was close, he added.

Labour has said the government is not doing enough, but Mr Davey called its record on energy investment "shocking".

His comments come amid a fierce political row over household energy bills, with SSE becoming the first of the "big six" energy firms to announce a sharp increase in prices last week.

'Really critical'

Speaking on the BBC's Andrew Marr programme, Mr Davey said he had made "huge progress" during a recent visit to China - during which he spoke to all of the country's major energy suppliers about boosting two-way investment.

"The Chinese, along with the Japanese and the Koreans are very interested in the opportunities in the British nuclear sector. I think it is really possible we will see massive Chinese investment, not just in nuclear but across the board."

"I think we will see massive Japanese and Korean investment. It is really critical we get that investment," he said.

Other energy firms are expected to announce energy price rises in the coming weeks

Recent reports have suggested China General Nuclear Power Group could take a 49% stake in the French-led consortium seeking to develop Hinkley Point.

Under existing proposals, two new nuclear reactors would replace those set to stop operating in the middle of the next decade.

Mr Davey indicated the UK was also "extremely close" to a deal with EDF - one of Britain's big six energy firms - to invest in Hinkley.

The government has said the state will not directly subsidise the building of new nuclear plants but has insisted that new generating capacity is essential - alongside other forms of energy - to meet the UK's growing energy needs.

Mr Davey told the programme that, when an agreement was finally reached, he was "convinced I will be able to look consumers in the eyes, look businesses in the eyes, and say we have a good deal".

The energy secretary also played down suggestions of differences with Tory Chancellor George Osborne - who is currently in China on a trade mission - over energy policy, saying they were "stuck together" on the need to substantially increase levels of investment.

Lights will 'stay on'

Elsewhere in the programme, Mr Davey said he expected other firms to follow SSE and raise energy prices, but he made no apology for seeking to upgrade and modernise the UK's energy system.

Energy companies have said one of the reasons they are having to hike prices is to pay for huge investment in the UK's generation and distribution infrastructure.

The energy secretary said he had written to the largest firms to ask them what they were doing to simplify their bills, so consumers could understand what they were being charged.

He said he expected answers from them by Monday.

Ministers have dismissed Labour's pledge of a price freeze on energy bills after 2015, arguing the way to help consumers is to increase competition and make it easier for people to switch supplier in order to access the best possible tariff.

Mr Davey told the programme Labour's warnings about a looming energy crisis rang hollow.

"The lights are going to stay on. Since this government came to power, we have been running to increase energy investment. Labour's energy investment record was frankly shocking.

"They were negligent with energy and climate change policy. We are the ones delivering the new power stations, the policies to deliver the billions of pounds of investment."

Meanwhile, Labour said the government was building false expectations about the benefits of shale gas and was presenting it as an alternative to renewable energy.

Shadow energy secretary Caroline Flint told Sky News Labour was not opposed to fracking in Britain, but warned it was not yet known at what cost it could be produced.

"We are not setting our face against it if the conditions are right and the environment is right, but what we do disagree with is polarising shale against renewables that we need as well," she said.