Tuesday, June 04, 2013

Energy Bill - who pays?

The Energy Bill makes its way through Parliament with an important vote later today. Why important? Because there is going to be a revolt. 

Just announced - the government defeated the amendment which means there will be NO decarbonisation target - unless the Lords overrules.

The government does not want to include a carbon target for electricity generation. It wants to defer a decision until after the next election. Why is this a problem - and why the revolt? The carbon target will define how clean and efficient our electricity generation must be. In turn that will define how much of the supply must come from renewables, from nuclear and it will determine how urgently (or not) the industry should be cleaning up coal and gas generation with Carbon Capture and Storage (CCS). In energy policy the government is gaining a reputation for dithering. The Feed-In tariff, revised down well before the promised deadline, is a key example. The market for solar panels collapsed overnight and more than a few installers went out of business. 

Carbon targets are as important as guaranteed prices for energy generators. If they are planning plants which will take years to build and will operate for decades they need to be sure that tariffs and taxes - and carbon targets - can be relied upon. Otherwise they will reject the risks and go and look for business elsewhere.

We are on the threshold of a new phase of generating plant. The chancellor is committed to a new dash for gas, powered by gas extracted by fracking from deep beneath Lancashire. Announcements made yesterday claim there could be 7 years’ supply down there. Could be. Nothing is proven yet. Well, we can still get gas from Norway, the Middle East and in time from Russia. Leaving aside the energy security arguments, (would you prefer to rely on gas and coal from thousands of miles away, or to use wind, solar and tides freely available at home?), if the generators go ahead anyway and build new plant, what happens in 2016 when the targets are finally set?

Either we bring in standards which will make a sensible contribution to reducing the UK’s emissions, (and maybe bankrupt generators who can’t meet the new standards), or we decide that all the controls we need fit nicely with exactly how these new power stations operate. 

We have a declared target to reduce the UK’s carbon emissions by 80% by 2050. 

But that’s still a very long way off, and it won’t be this government’s concern!

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