Oh, joy of joys. It’s election time again and, despite the effort and mental pain involved, I feel it’s my duty to provide you with unbiased (relatively speaking) advice on which one of the parties aiming to take power at Westminster will be best for the energy sector.
So I have selflessly spent hours pouring over the various party manifestos, diligently analysing their policies, and what I am now going to tell you is based on hard facts, or at least my interpretation of them.
It’s probably fair that I tell you that I have quite strict criteria when it comes to judging the various party policies.
Firstly, I look at whether their policies are likely to increase the amount of engineering and manufacturing jobs and, through the use of new technology, collaboration with universities and all that good stuff, develop an export-led, hi-tech, value-adding sector. That is, of course, applicable to all aspects of energy, including oil&gas, power generation, renewables and other clean energy.
Secondly, I pay particular attention to whether their policies will encourage operating companies to invest in further development of the oil&gas sector.
Thirdly, based on experience, do I actually believe a word they say and do I actually trust them to put in the effort needed to carry their policies forward within a reasonable timescale?
OK, let’s start with the incumbent Labour Party because, post the election, it provides the baseline on which any changes for better or worse can be measured.
The sad reality of Labour’s energy policy is that its greatest achievement in 13 years is that it has managed to change energy ministers 12 times.
That apart, reports and studies issued in late-2009 by Malcolm Wicks (energy minister number seven) and the World Wildlife Fund told us that, in terms of energy R&D investment, the UK was floundering well below our competitors and that our performance in terms of the sales of clean energy and related products was utterly appalling.
Wicks put part of the blame for the lack of R&D on the lack of an energy-related industry base. That’s one hell of an admission of industrial failure.
Now, I could list a whole bunch of other Labour policies, but there are two glaring examples that really need mentioning.
The first is that Labour sold the BNFL-owned nuclear-reactor builder Westinghouse to the Japanese just months before announcing the Government’s intention to go ahead with a new nuclear-reactor build programme.
The second is that Labour will insist on referring to overseas companies building electric vehicles in the UK as being part of the “UK automotive industry” and companies such as Mitsubishi, Siemens, EoN and others as being part of the “UK offshore wind industry”.
In different ways, both examples demonstrate a deficit in its ability to think in an industrially strategic manner as it has failed to evaluate the long-term impact of depending on others for our technology.
Labour’s attitude to oil&gas taxation has also been ambivalent. Only recently have some concessions been made in the shape of limited field allowances.
Overall, and based on my criteria, I’ll give Labour a score of four out of 10 because I don’t believe it means what it says. None of its policies are aiming at improving our industrial position, only in satisfying its own policy targets.
Now the Conservatives. Here, we have to rely on the election manifesto, which states that “Britain needs an energy policy that is clear, consistent and stable. That means that ministers will be unambiguously responsible for determining energy policy and delivering an Annual Energy Statement to Parliament to set a clear direction for energy policy. To safeguard our energy security, we will reform the energy regulator, Ofgem, so that: it focuses on executing energy policy; it is tasked with monitoring the spare capacity in the energy market and making provisions for additional capacity where required. As a result, we will cut the number of quangos intervening in the energy market”.
Well, that’s all OK, I suppose. But there is also an assumption that the Conservatives will scrap the Renewable Obligation Certificate scheme and introduce a set of Feed In Tariffs. This could cause uncertainty and delay in relation to new projects, particularly offshore wind.
The Tories will also carry forward a commitment to the installation of an offshore electricity grid in order to support the development of a new generation of offshore wind power, and have shown their commitment to “clean coal”, CCS and nuclear power.
Former Conservative energy minister Tim Eggar is to lead a review of the tax treatment of the North Sea.
Regardless, it’s important to remember that it was the Tories that initiated the privatisation programme that has led to most of our energy utility companies ending up in foreign hands – some state-owned.
That policy contributed indirectly to the small energy industrial base that Wicks commented on.
So the Tories get four out of 10 because, in their case, I don’t think they are telling us everything they intend doing or, indeed, how they intend improving the quality of their strategic thinking. The latter, of course, led to the UK pulling out of wind technology development. Do they intend building up our clean-tech manufacturing? They don’t say so.
The Lib Dems are calling for a greater emphasis on energy conservation and support the view that “all” the UK’s energy should come from renewable sources within 40 years. This implies closing down all nuclear, gas and coal-fired generation plants.
They are also now talking about plans to create jobs that last by “stimulating a green, sustainable economy”. Their ideas include investing in wind energy projects, improving energy efficiency in public buildings and homes and bringing empty homes back into use.
The Lib Dems only deserve a score of two out of 10 because they have no intelligent plan on how to actually achieve their objectives without crippling our existing power-generation system.
Finally, it’s important to mention the current Scottish Government. The Scottish National Party has been concentrating its effort on issues such as wave and tidal power, sensibly recognising that this is a resource we can both develop for our own benefit and for the benefit of Scottish industry.
It has also set up an Energy Advisory Board to help advise on and develop its policies. The SNP is also working hard now with Scottish Enterprise on the development and commercialisation of new technology and has developed a new strategy which is a major improvement on how the Energy ITI operated. More on this later this year.
In terms of achievement versus resources, the SNP has done well and seems to actually have a real industrial strategy. Accordingly, I have to score it much higher and will give it six out of 10.
So that’s my limited take on the situation. You don’t have to agree.
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