Westminster MPs on the Energy and Climate Change Select Committee may have hit the nail squarely on the head when they accused the Treasury of making the government's clean energy revolution unworkable and creating the risk of higher household bills. Rightly in my opinion they said Treasury changes to the draft Energy Bill will increase the risk of borrowing for investors.
MP’s noted that it would put up the cost of renewable and nuclear power, with customers bearing the extra cost. Somewhat naturally a Treasury spokesman said the aim was to achieve government goals while protecting businesses and consumers. The suggestion is that the Treasury has clearly intervened in the draft Energy Bill in a way that will put up bills to consumers and put off investors by increasing their risks, which just happens to be exactly opposite of what the Treasury officially says that it wants.
Chancellor George Osborne for, in his view, trying to undercut subsidies to onshore wind - potentially the cheapest option of expanding the UK's renewable energy portfolio. MPs wanted Treasury ministers to attend the Committee to answer questions about their influence on energy strategy, but they declined. On-shore wind is not the real issue, this is about Westminster and Whitehall trying to weaken the commitment to green renewable energy period - so that the nuclear option (their favourite option) becomes to only game in town.
A Treasury source stated that it would be inappropriate for ministers to be questioned at this stage in parliamentary proceedings. The committee has major worries about the finance department's impact on the draft bill, including the long-term contracts for developers who are being asked by the government to plough billions in the UK's low-carbon infrastructure.
The Department of Energy and Climate Change (Decc) originally said the government would guarantee the contracts, thereby reducing the risk for investors and allowing them to borrow large amounts at a low rate of interest, but, the Treasury has since ruled that the government will not be the guarantor.
MPs are also concerned about the ongoing consumer subsidy to renewable and nuclear power generators, which are needed for the UK to meet its legally binding targets. The Treasury says the subsidy will be limited to hold down the cost to consumers - but it won't reveal the size of the future cap.
The UK Chancellor is under pressure from right wing backbench Tory MP’s to make major cuts to the support for onshore wind, which could seriously damage the renewable energy industry. I have real and significant concerns about the impact of, the ownership of on-shore wind developments and the flawed nature of the planning process – thanks to the 50 MW rule - here in Wales.
The Con Dems and the Treasury while being more than happy to allow massive land based windfarm developments in Wales appear to be wholeheartedly indifferent when it comes to encouraging community-owned and community beneficial energy schemes. This is where a local community builds a small solar, wind, hydro etc plant in their area, and members of the community have a stake (e.g. hold shares) in it.
Such installations would earn payments from the Government's Feed-in Tariff scheme for 20 years or more, and could pay for themselves in around 10 years. This means that potentially local community share holders could be in profit after 10 years, not to mention the added benefit of reduced energy bills.
Mind from a pro-Nuclear Treasury point of view the last thing they would want are ordinary citizens, community activists, councillors, local landlords, farmers, etc reaping their own rewards from small scale energy generation projects because over the medium to longer term the big boys profits would reduce along with post civil service and post Westminster jobs for the boys and girls in Westminster and Whitehall.