Secretary of state Amber Rudd is on the defensive after an influential business lobby criticised government energy policy. We look at the facts
Amber Rudd at the Department of Energy and Climate Change (Flickr/ DECC)
By Megan Darby
The UK’s energy and climate change chief is rattled. It’s one thing when solar panel installers are getting laid off, another when big business is questioning your leadership.
So it was when the Confederation of British Industry published an open letter on Tuesday, signed by the likes of Tata Steel.
The language was restrained, the criticism veiled. “Building on the ambition of the recent Paris Agreement, much more of our energy will come from renewable and other lower-carbon sources,” they wrote. “To unlock investment, we need a clear long-term framework.”
But after months of green cutbacks and policy U-turns, the subtext was clear: Get your act together, or we’ll take our money elsewhere.
Amber Rudd came out fighting, with a list of ten ways the government was securing investment in “clean, secure energy”.
Let’s see how they stand up to scrutiny.
Claim 1: Committed to the first new nuclear plant for a generation at Hinkley Point C. It will power 6 million homes for 60 years and also provide 25,000 jobs giving the UK economy a huge boost.
Would that be the same nuclear plant that has just been delayed for the umpteenth time? The Conservatives and their Liberal Democrat former coalition partners bent over backwards to get a new nuclear fleet without state funding. British state funding, that is. Instead they struck a generous subsidy deal with the French state-owned EDF and pussy-footed around human rights concerns to court Chinese investment. Still EDF is struggling to find the cash.
To be fair, unlike for many other technologies, a lack of government commitment is not the problem here. On the contrary, its unseemly eagerness to lumber consumers with the £18 billion price tag has won the project enemies as diverse as former Cabinet secretary Lord Turnbull and green firebrand commentator George Monbiot.
Claim 2: Boosting innovation funding to over £500m, including £250m for nuclear innovation and Small Modular Reactors.
Ah yes, small modular reactors, the solution to all our energy problems, maybe. Beloved by those who hate wind turbines, they promise to generate vastly more power without interrupting the view. The modular part potentially means mass production and efficiencies of scale. But it will take all that money and more to get to there. Their commercial viability “remains unclear”, lawmakers concluded after an inquiry in 2014.
Claim 3: Confirmed we could support up to 10GW of new offshore wind projects in the 2020s, with a further three auctions in this Parliament if the Government’s conditions on cost reduction are met.
This is the part that shows the hollowness of Conservative claims to be motivated by cutting consumer bills. They are supporting offshore wind, which at £120/MWh is nearly twice the cost of onshore wind generation. The latter has been choked off by subsidy cuts and planning constraints for political reasons. Both are ultimately needed to meet the UK’s carbon targets.
Claim 4: Set out world leading plans to close all unabated coal-fired power stations by 2025 if we’re confident that the shift to new gas can be achieved within the necessary timescales.
This was Rudd’s big reveal ahead of December’s Paris climate summit. The symbolism – world’s first industrialised nation quits coal – was welcome, even if it was making a virtue of necessity. EU regulation, carbon pricing and the ravages of time are expected to see off polluting plants by 2025 anyway.
But there’s a caveat, in a different font (as the Telegraph’s sharp-eyed Emily Gosden pointed out) as though hastily added at the last minute: “If we’re confident that the shift to new gas can be achieved within the necessary timescales.” The government plans to consult on this, so look out for backtracking.
Claim 5: Allocated £295 million to invest in energy efficiency measures in schools, hospitals and other local public services.
Citing an absolute figure here, it is not clear whether this is more or less than in previous budgets. On the whole, this government has been lukewarm on insulation. That’s a shame, because energy efficiency is the holy grail: greener, more secure AND good value for money.
Claim 6: Introduced a new energy efficiency supplier obligation for 5 years from April 2017 set at £640 million a year – helping more than 1 million homes cut carbon emissions and keep their bills low.
This is down from £1.3 billion a year between 2012 and 2015. To top that, last year the government scrapped a zero carbon homes standard for new builds.
Claim 7: Committed to more than double the support we give to households and businesses to decarbonise their heating supply in this Parliament (from £430 million to £1.15 billion).
In the hype around clean electricity, heat is often overlooked. The increased funding sounds good. But when announcing this, the government said the scheme would be reformed to save £700 million, leaving the industry confused.
Claim 8. Allocated over £300 million to deliver up to 200 heat networks in communities, leveraging up to £2 billion in private investment.
Sure, we’ll let them have this one.
Claim 9. Announced a 50% increase in the UK climate finance commitment to a total of £5.8 billion over the next five years to help the poorest countries cut carbon emissions and adapt to climate change.
This is redirecting overseas development aid, not adding to it. But to its credit, the UK in 2013 became the first G7 member to meet a target of spending 0.7% of national income on foreign aid. Indeed, by some accounts, the money is flowing faster than officials can allocate it to credible projects. If labelling it climate finance helps the cash to find a good home, that’s all to the good.
Claim 10. Signed the Paris agreement, which sends a clear signal to business to invest in the low carbon transition.
That’s funny, because the signing ceremony is not until April. But I nit-pick. Rudd was in Paris and played a constructive role in getting a deal, including with a push for five-yearly reviews to ramp up ambition.
As an achievement, getting 195 governments on board with an ambitious carbon-cutting agenda is not to be sniffed at. But bold targets mean nothing without policies to put them into action.