Bryony Worthington on the government’s cavalier approach to energy infrastructure
To say that the government's energy policy is in chaos is an understatement. There appears to be no policy at all – just a series of ideologically driven, poorly thought through assaults on existing clean energy policies. No wonder investors in UK energy infrastructure are completely perplexed and the CBI is upset. Even Conservative Party donors such as Dennis Clark are sounding the alarm. And, just weeks before the Paris climate negotiations, what signal is the UK sending to the rest of the world, by dismantling virtually everything that incentivises investment in a cleaner future?
This is the backdrop to today’s Lords debate on the final day of Report for the Energy Bill. We will be considering the impact of a single legal clause, which has set the on-shore wind industry reeling. Particularly in Scotland where many of the recent projects are being developed. This clause (66 in the Bill) is possibly one of the worst pieces of legislation I’ve come across in my years working in and around Westminster. It sets out to close a renewables support scheme that is already closing in 2017 – a year earlier than agreed in the Energy Act 2013.
The announcement was made on 18 June, just weeks into the new parliament – with the cut-off date given for projects still seeking to accredit under the scheme set on the same day. The lack of prior warning meant that many projects, with millions of pounds in sunk costs, have fallen foul of the artificial deadline. This has prompted much protest from the industry and their investors. Ministers have repeatedly justified their actions with ‘it was in the manifesto’ but the phrase actually used was to ‘end any new public subsidy’. The latter is hugely open to interpretation, and people would be hard pressed to read those words and think “Ah yes, this must mean that the existing support scheme I am investing under, which is already closing, is going to be closed 12 months early, without consultation”.
The government said that it would introduce a ‘grace period’, during which exceptions could be made and projects allowed to go ahead, but details of this were not forthcoming until a few weeks ago and when they did emerge were full of anomalies and injustices. The most significant being that projects that had local planning consent but were awaiting full permission as conditions were being drafted, will be deemed outside the grace period; whereas those that were rejected locally, but won on appeal will qualify! So much for letting local people decide – another Tory manifesto pledge.
The UK wind industry has a 25-year history to be proud of. The first on-shore wind support mechanisms were brought in by Margaret Thatcher in 1990, since when an entire industry has flourished. Not just here but across the globe: creating jobs, reducing fuel imports and reducing harmful emissions. The idea that this can be so disrupted on the basis of a poorly defined manifesto pledge is alarming.
Our concern however, for the plight of the on-shore wind industry, should not be misinterpreted as a fondness for never ending renewables subsidies. Far from it, we want to see the whole range of technologies brought on, so that least cost decarbonisation can be made the front and centre of a sound energy policy. Rather than rush to legislate in this way, Ministers should have instead focused on introducing smart rules that allow the market to do more of the decision-making.
Knocking low cost on-shore wind out of the low carbon equation is bad enough. But we have also learned during the course of this Bill, that the government will not be setting a target to reduce the carbon content of electricity substantially by 2030, as previously agreed in the last Energy Bill. This leaves it unclear what we will be seeking investment in after 2020, when our renewables targets will end.
In a further blow to the environment and human health, we have also recently seen a rush towards small scale distributed generating plant. Much of this is diesel powered, paid for by the capacity market also created under the last Act.
So, while on-shore wind is shelved and clean power contracts suspended, virtually the only thing the government’s energy policy is delivering right now is back-up generators – something more commonly relied on for power in developing countries.
That things can unravel quite so quickly is a real worry. In the debate today, we will seek to point out all of these concerns and correct them where we can. We should not allow the future of our energy infrastructure to be handled in such an unclear and cavalier manner and it is right and proper that we ask the government, once again, to reconsider its approach.
Baroness Bryony Worthington is Shadow Energy Minister in the House of Lords. She tweets @bryworthington
Published 21st October 2015