Business investment in the UK utilities sector has fallen by 9.3% in the first quarter of the year, according to tax relief consultancy Catax, as the Covid-19 pandemic continues to sow uncertainty in the power sector and discourage investment.

Total investment fell to £3.9bn in the first four months of 2020, compared to £4.3bn in the same period last year, a fall which mirrors a wider declinein the UK economy, which has shrunk by 10.4% between January and April this year.

“Business investment has tumbled against a backdrop of concern over the ability of customers to pay their bills and future rises in bad debts,” said Catax CEO Mark Tighe. “In addition, the energy regulator Ofgem is expected to reduce the price cap on tariffs in the coming months as it tries to help consumers, making the industry an even less appealing prospect.

“However, the energy sector has seen the future during lockdown, with renewable electricity making up almost half of the power used in the UK in recent months. Investment in research and development of renewable technology will pay dividends both financially and in reducing global warming.”