The minister told the committee the Bill had three objectives: to ensure security of supply; to reduce carbon emissions; and to reduce fuel poverty.
So at the end of the week, how confident were we that they would all be met? The answer is: not very.
David Kennedy, chief executive of the Committee on Climate Change, was clear about the need for a sector-specific decarbonisation target for 2030 to be on the face of the Bill. In response to questioning from Conservative MP Dan Byles, Kennedy said: “If we had not destroyed the investment climate in this country by the government giving mixed messages about what they think about the future for the power system, maybe we would not need it , but because we have those mixed messages and we are where we are, I think the supply chain will be looking at France and Germany.”
The Conservative line for the week seemed to be: “Other EU countries don’t have a decarbonisation target, so why do you think we need one?” The irony of them adopting that particular European standard in a week when the prime minister was supposed to give his big “pull-out” speech obviously escaped them.
However, Dave Timms, UK climate and energy campaigner from Friends of the Earth, gave an extremely robust answer which was as elegant as it was intelligent. “It is a UK solution to a UK problem. Germany, Denmark and other countries have big developed supply chains. We do not have their supply chains. We need their supply chains, if we are going to bring home the benefit of a low-carbon economy,” he said.
The committee heard evidence from representatives of the renewables industry. Every single one called for a 2030 decarbonisation target for the energy sector to be placed on the face of the Bill. We need to be clear why this is so important: investors need to see that there is a secure long-term policy if they are going to finance the infrastructure required for a low-carbon future.
The Committee on Climate Change estimates that if we could create a competitive supply chain in the UK, we could reduce the cost of power from offshore wind turbines from £140/MWh to £100/MWh. This reduction would simultaneously reduce costs for consumers and increase energy security by enabling the deployment of more offshore wind.
It is not every day that unions and bankers are caught singing from the same hymn sheet, but there was a remarkable harmony from Andrew Buglass, managing director and head of energy at RBS, and Gary Smith, the GMB’s national secretary.
“Potential supply chain investors… quite rightly point out that it is very difficult for them to take investment to their board if they really only have visibility on three or four years’ worth of work,” said Buglass. Smith could not have been clearer on the effect this would have on British jobs: “The truth is that, to a large extent, the components in these power stations will be built in Korea and Germany, and they will be connected up with Chinese-made cables. In terms of British skills and jobs, we are the Meccano men and women. We bolt things together and the high-value stuff is produced elsewhere.”
The message is clear. The Bill could deliver the security required for companies to produce the components of a new energy infrastructure here in the UK, producing significant growth for the UK economy. But, in its current form, it will not.
There is no doubt that the Energy Bill is needed. But there is also no doubt that a better Energy Bill is needed. I hope we can secure a better Bill that will achieve not only the minister’s three objectives, but can bring a real and sustainable boost to the British economy as well.
Barry Gardiner, Labour MP and member of the Energy Bill Committee
This article first appeared in Utility Week’s print edition of 25th January 2013.
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