I find it impossible to feel anything but raw anger towards the Westminster Conservative Government’s policy on renewables and energy policy in general. Here is a government stating on the one hand that the country has to support the “makers” and export more yet on the other effectively stamping out a globally important growth industry with huge potential.
So far, Cameron & Co have scrapped or dramatically reduced support for onshore wind, solar, biomass, the Green Homes scheme, is selling the Green Investment Bank, has done away with the policy of building Zero Carbon Homes, reduced the incentive to move to lower emission vehicles and, of course, decided that the Climate Change Levy, which had been restricted to providers of non-renewable energy to businesses, will be imposed on renewable energy providers as well.
Better value?
Chancellor George Osborne said of the latter: “This change will correct an imbalance in the tax system by preventing taxpayers’ money benefiting renewable electricity generated overseas, and by helping ensure support for low-carbon generation provides better value for money for UK taxpayers” neatly forgetting that of course all but one of the UK’s main electricity supply companies is foreign-owned.
There can be little doubt this totally unexpected and crass move will do huge damage to companies involved in renewables generation.
We’ve known for a long time that under both Tory and Labour governments, support for energy related R&D is shamefully low compared with our competitors.
That said, there are pockets of technological “maker” potential in some areas such as fuel cells, electrolysers and nowadays even tidal energy and biofuels. But the scale of these is nothing like the wind turbine industry in which the UK has pretty much no involvement especially when it comes to all the high tech, high value stuff.
But anyway, following the recent announcements on subsidies and other support to the industry by energy & climate change secretary Amber Rudd, any incentive to invest in the renewables industry, develop new technologies and take a risk on building a business has been badly undermined.
These decisions are as appallingly thought through as the 2011 increases in North Sea oil & gas taxation were, which has to beg the question as to the Government’s real competence when it comes to energy matters.
Rudd said: “Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, while protecting existing investment.”
This is risible. Our Government has not, for example, been responsible for the decrease in the cost of solar cell production mainly because we don’t make them in this country.
In fact, it’s the other way around. Those overseas companies that have invested in evolving solar technology production methods and other technologies are responsible for making it much more affordable. The current and prior UK governments had nothing to do with it.
Economies of scale
Now, as it happens, I tend to agree that subsidies for technologies for onshore wind and solar could now be cut back or eliminated but only on large projects where the economies of scale can be applied.
However, Rudd has said DECC will be consulting on “further cost-control measures relating to the feed-in tariff scheme” which means small projects including domestic installations of solar will inevitably be hit.
So, two big questions arise from the Government’s decisions. The first of these is “why?” and the second is “what, if anything, can we do about it?”.
The “why” should be obvious. The UK is in dire economic straits and the Treasury thinks applying the austerity regime to the renewables sector is one way of cutting costs. That it will damage what little clean technology industry we have doesn’t concern them because it’s not big enough to have any real influence and anyway, experience tells us that neither the “City” nor what’s left of UK industry is interested in supporting the development of a viable clean technology manufacturing sector.
So, whether it’s a good idea or not – and it is of course, then building up a real sector that makes and exports stuff is simply no longer on the cards unless you can do it without UK government help and without mainstream financial support.
The “what can we do about it” question is more difficult but I’m now even more strongly of the opinion that, here in Scotland, the Holyrood Government has to direct its efforts towards carefully selected areas of renewables technology and essentially develop its own policies independent of Westminster.
Staggering expense of nuclear
Of these, first and foremost must be to look at how to take as many areas of Scotland “off grid” as possible. Although there’s no viable timetable yet new nuclear power stations will be built in England. The cost of that will be staggering and will impact across the UK because Westminster has had to agree a strike price that’s considerably more than the wholesale price in order to persuade the overseas developers to invest.
So going “off grid” will make sense but moving towards dramatically reducing energy consumption makes even more sense.
Going “off grid” using renewables will require – for example – scalable energy storage so let the Scottish Government put effort & funding into that.
Reducing energy consumption would involve, on one level, taking the opposite view to Westminster and making zero carbon or so-called “Passive Houses” a clear legal requirement for all new builds. It should also look at how it might help fund the renovation of existing housing stock to a “passive house” standard.
Investments not costs
Technically, these things and more can be done. It’s just a matter of wanting to do them and seeing them as investments not costs as this Tory regime obviously does. It’s a matter of appreciating that this is about innovation, growing technology businesses, jobs and exports, energy security and above all else, climate change.
Sadly, I just don’t think Cameron & Co is ideologically or intellectually capable of doing that even though it pretends climate change is a top priority.
The Treasury – which drives all these policies – has extremely strong connections to the City and that’s reflected in their thinking.
In fact, I understand that a number of Treasury high flyers are ex investment bankers and Amber Rudd herself even used to work for JP Morgan and was there when the 2009 banking crisis kicked off. It shows.
