Former energy secretary raises concerns about balance of spending between different sectors

Former energy secretary Ed Davey has urged the government to invest more money in heat innovation, arguing it has failed to strike the right balance in funding for heat and power.

The Liberal Democrat MP said there is still no obvious answer to the problem of how to decarbonise heat and the government must do more to find a solution.  

Appearing on a panel at Energy UK’s annual conference in London, Davey welcomed the funding for innovation outlined in the government’s Clean Growth Strategy but said he was “slightly worried” about where the government was directing “scarce public money”.

Davey pointed out that just £184 million has been allocated to innovation in heating, compared to £265 million for smart systems, £177 million for renewables and £460 million for nuclear.

“Now if you’re being strategic about decarbonising Britain and looking at innovation, I don’t think that’s the right balance at all,” he said.  

“And where is the serious investment in looking at hydrogen; looking at other non-fossil fuel gases; looking at moving energy efficiency even quicker; looking at how get the electrification of heating, if that’s the route that we go down, in the cheapest possible way.

“The challenge going forward must be on heating and I do not think we are grasping it.”

Davey said the government also needs to do more to support the development of carbon capture and storage (CCS) – an essential technology for the current proposals to use hydrogen gas for heating.  

He said the cancellation of a commercialisation competition for CCS in 2015 means the government now needs to set up an agency to deliver the technology, as recommended by Lord Oxburgh.

Davey took the opportunity to criticise the last-minute decision to axe the competition, describing it as a “dereliction of duty” and “outrageously stupid”.

Karen Turner, director of the Centre for Energy Policy at the University of Strathclyde, agreed that the government needs to play some role in the development of CCS, although not necessarily as an owner of infrastructure.

“I think a lot of decisions need to be made now,” she added. “And that’s not just financial investment.

“It’s policy… and politicians creating this environment and landscape going forward over the next few decades, where industrial actors feel like they can invest in the type of solutions we need.” 

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