The UK Government’s Confused Energy Policy

It’s difficult to reach any other logical solution but that the Government’s current energy policy is floundering in a mire of deep confusion. With Amber Rudd last week accused of misleading MPs about the UK’s ability to meet its green targets for 2020, and further grumblings from the renewable industry about cuts to subsidies, there’s little doubt that the DECC has plenty to mull over in the next few months.

For many, the renewables industry is a grass roots movement that has the power to change the UK to a low carbon economy which is not only self-sufficient but important for our future and that of the planet. Ever since news of plans to drastically reduce the Feed in Tariff for green energies such as solar and wind, the Government has been under pressure to make clear their strategy for the future.

A leaked letter from energy secretary Amber Rudd suggested that were were going to fall short of the agreed obligation to obtain 15% of energy needs from renewable sources by 2020. The letter further said that publicly the Government was to continue to say they were on target despite knowing that they weren’t, something which has naturally led to suggestions that parliament has been misled.

This was followed by a meeting a few days later in front of the energy and climate change committee where Rudd admitted that the Government didn’t have the right policies in place and seemed to suggest that the shortfall should be made up contributions from the Department of Transport and a deeper focus on heat.

Putting more resources into wind was not an option, Rudd told the committee but there was the option to buy energy from renewable sources in Europe to make sure the target was reached. The only good news for the renewables industry in the UK was that the energy secretary said she was lobbying to maintain the subsidies for the Renewable Heat Incentive.

Rudd also confirmed she was committed to meeting the 2020 target but seemed unable to say which policies were going to help bring this about:

“We don’t have the right policies, particularly in transport and heat in order to make those 2020 target. There’s insufficient evidence that we are going to make the target for 2020 unless we take certain action. I remain committed to taking action.”

Industry insiders are rightly worried that a number of planned renewable energy projects may not go ahead because of the general climate of uncertainty that has been created by the Government energy policy. Rudd said that news about the future of the Contract for Difference would be announced by Christmas but it could be that fewer projects would be given the go ahead than at first envisaged. In all in all, there seem to be plenty of commitments to take action but little being revealed by Rudd who is expected to make a speech about the renewables ‘reset’ at some later date.

Most of those in the renewables industry believe that the UK will definitely miss their target for 2020 unless something is done fairly soon. That would mean we may have to pay other EU countries to essentially over perform to meet overall targets. According to Dale Vince from Ecotricity:

“Given the reason for Rudd’s cuts to renewable energy support was cost, you’d think that cost ought to be a prominent feature of any discussion. Not only would paying other countries to build renewables for us cost more, but we’d also be exporting jobs and industry…it all seems a little un-thought through.”

Lying uncomfortably in the background of this lack of commitment to renewables is, of course, the recent investment in nuclear power which many see as a short term gain for the Government that could find consumers saddled with large energy bills in the future. The cuts to renewable subsidies this January will save the consumer around £1.20 on their energy bills (and not the £6 the Government originally suggested) and will lead to a total saving by between £40 and £100 million, a drop in the ocean compared to the amount we are subsidising nuclear and fossil fuels.

There’s no doubt that subsidies need to be controlled and a cut of some sort is in order to keep the renewable project under control. But the price of installing solar is coming down and the industry has a chance to thrive and make a major contribution to the energy economy. Cutting subsidies by such a drastic amount is both absurd and short sighted. The solar industry will eventually stand on its own two feet but January could see the Government delivering a broadside that will damage it beyond repair.

Meanwhile we wait for more information from the Government and Amber Rudd in particular, about how they are going create a greener future for our children whilst simultaneously pulling the rug from under the renewables industry.

 By Steven Meredith

Is it Time to Worry When UN Scientists Sound Off?

United Nations

This week, support for the beleaguered renewables industry came from an unlikely source. Professor Jacquie McGlade is chief environment scientist for the UN, someone who you would think knows a lot about the renewable agenda. She expressed her disappointment that the UK has appeared to do an about turn and is running headlong away from technologies such as solar and wind whilst the rest of the world is rushing forward with open arms.

She told the BBC:

“What I’m seeing worldwide is a move very much towards investment in renewable energy. To counterbalance that you see the withdrawal of subsidies and tax breaks for fossil fuels. What’s disappointing is when we see countries such as the United Kingdom that have really been in the lead in terms of getting their renewable energy up and going – we see subsidies being withdrawn and the fossil fuel industry being enhanced.”

Whilst politicians still seem intent on coming out with the same tired old phrases about how they are trying to get a better deal for bill payers, there is some concern in the wider global arena that the UK has decided to abandon its leadership on climate change. McGlade even went as far as to call the signal that the UK was sending out to other countries ‘perverse’.

What Does a Reset Mean?

One thing that hasn’t been discussed in great deal is the Government’s idea of a reset to the industry and what that actually looks like. You’d be forgiven for thinking that they may not have much of a clue themselves with the lack of information that has been forthcoming. The sensible option would have been to say we are going to get rid of this (the FiT) and replace it with this (place your own idea here). All we have is a spurious promise that they are committed to renewables and something is on its way.

Meanwhile some big investors are starting to look elsewhere. According to the same BBC article, the CEO of ACWA Power in Saudi Arabia said:

“Everyone is running around the world looking for other places. Thank you very much, I’ve picked up experience now, the UK is not the best bet, let me go somewhere else. Even the UK companies are looking aggressively elsewhere.”

Most people in the industry agree that the FiT subsidy should eventually be phased out but cutting by 87% in fell swoop has brought cries of frustration from the market and outside investment. According to a recent report by EY, government initiatives to remove the FiT and threats to other subsidies in the future is baffling many investors to the point where they are taking their business elsewhere.

The organisation suggested that this might indeed mean that the UK was trying to make renewables the first unsubsidised market in the world. If that’s the case many in the UK believe they are making an unholy mess of it, akin to throwing a baby from its pram in the vain hope that it will land on its feet.