WILL WE BE DANCING IN THE DARK?

Despite the spin (which is clearly not working) the impression you get is that the Con Dem Coalition Government is actually quite shambolic. If you wanted a specific government department in Westminster and Whitehall to sum up the coalition then you need look no further than the Department of Energy and Climate Change (DECC). This pretty important ministry has gone through three energy ministers in the last year, which considering this ministry allegedly looks after one of the most complex areas of legislation in Whitehall, hardly suggests any minister has had time to gain an understanding of their brief. 

This resembles little more of an expense game of musical chairs. As noted elsewhere this farce is reminiscent of Labour’s approach to the defence brief, which for those who can be asked to remember managed to feature a largely forgettable cast of nonentities, something that barely made good politics, let alone suggested that anyone had a grasp of the complexities of their ministerial brief.  Back at the DECC, the ministerial game of musical chairs had also been paralleled with a significant turnover of senior civil servants, which does not suggest that the ministry is a happy ship let alone getting on with it’s job.  

A recent report on the UK energy sector by Liberum Capital suggested that the problems at the ministry may be the least of our problems, as they suggest that current UK Energy Policy is just not plausible.  Their view is that successive UK governments have grossly underestimated the engineering, financial, and economic challenges that are posed by the drive to decarbonise the electricity sector by 2030. The necessary move from a largely fossil fuel based power system to one dominated by renewables (and if Westminster and Whitehall get their way nuclear) in about a decade and a half, while keeping the lights on and consumer bills affordable, may well be simply unattainable. 

It has been estimated that the total required investment to deliver policy goals is some £161 billion pounds from now up until 2020 and some £376 billion pounds up until 2030. Even with the large projected increase in public support (which will largely fund the nuclear programme and its subsidy) provided by the Energy Bill, Liberum Capital suggest that it is difficult to envisage that the finance will be forthcoming when the large European Utility companies are actually reducing capital expenditure. The really scary bit, other than the prospect of periodic power cuts, is that even if the investment actually happens they consumers may see electricity bills rise by at least 30% by 2020 and 100% by 2030 in real terms. 

When the energy crisis (which incidentally probably won’t happen in Scotland) arrives, considering the current level of hostility being directed at the excessive profits being generated and directed towards the members of the ‘Big 6’ energy cartel, I would not be surprised if whatever government who happens to be in power does not move towards a return to some form of public or state ownership.  When we get there may be three main casualties, firstly  the government of the day who are unlucky enough to be in power , secondly the consumers (us) who may be left literally sat in the dark and the cold and finally thirdly the large energy companies (and their shareholders). 

I have no doubt that when that when the lights begin to flicker that whoever is in government (regardless of the party label) will move rapidly to protect themselves and the electorate (who also happen to be energy consumers) by securing control of the means of energy production and distribution regardless of the consequences for the energy cartel members. The real questions that may well never be answered will be why did it take so long for the Westminster government to wake up to the consequences of not really having an energy development policy and why did they leave energy planning to a cartel that were only concerned with ramping up profits?

The lights may not go out in Scotland, where successive Scottish Governments have consistently worked to tackle the threat of Climate change and develop sustainable energy reserves. Scotland is working towards a plan for a 42% cut in greenhouse gas emissions by 2020, rising to 80% by 2050. These proposals which were first unveiled in 2009 are far more ambitious than anything that has been proposed in Westminster,  where the 2020 target (set before the Con Dems came to power) for cutting carbon emissions has been set at 34%. The Scottish Government has already set out a wide-ranging vision to address climate change, which includes a drive to boost renewable energy such as wind and wave power.

Scottish Ministers also aim to see significant progress in boosting the energy efficiency of buildings, increase the number of electric vehicles on the roads and aim to cut in emissions across the farming and rural sector. This is serious forward thinking on the part of the Scottish government as energy experts have for several years been consistently warning of a serious future shortfall in Britain's energy supplies. Control of energy policy needs to be devolved to the National Assembly and it’s time for some original non nuclear thinking and a fundamental sea change in attitude from government in Wales when it comes to energy policy. 

Imagine what we could do if our Government (in Cardiff) possessed similar powers (and the political will and imagination) to develop the alternative energy sector here in Wales as is being done in Scotland. Rather than empty platitudes we need real direction when it comes to the development of safe and secure energy resources as power generation can provide the potential for real community beneficial and sustainable long term job opportunities. The renewable energy sector should play an immensely important role in creating more green energy jobs and make sure that our lights stay on rather than end up dancing in the dark!.

IT’S FANTASY BARRAGE AGAIN!

Fantasy Barrage

The potentially fatal combination of Peter Hain’s desperate search for gainful employment (with no doubt much emphasis on the gain) and David Cameron’s attempts to save face by finding a Plan B to restore economic growth, offers us (again) yet another version of the all singing and all dancing Severn Barrage. That aside, we do need to seriously discuss making best use of the renewable energy potential of the Severn estuary and to seriously consider a wide range of options to develop as much energy as possible.

As I have said before, when I was young there Fantasy Island (on TV), now we will have Fantasy Barrage, which promises all things to all people all the time – but at a price - financially for starters we are now talking about up to £30 - 34 billion pounds. The resurrection of the Severn Barrage scheme (yet again) should make us wonder about the sanity (financial or otherwise) or the sincerity of some of the usual suspects.

I have no doubt that the usual glib fatuous statements about the project being the solution to all of South Wales’s economic and transport woes will continue to be trotted out. If it sounds too good because it simply is - it's a fantasy, yes we need to develop the renewable energy resources of the Severn estuary, and we would be certifiable not too.

A combination of tidal lagoons, tidal fences, and turbines based in tidal current rich areas and wave energy generation technology (currently being tested off Scotland) and some carefully situated off-shore wind farms could generate a significant amount of sustainable energy with significantly less environmental damage, and generate sustainable jobs and exportable technology to boot.

New Labour and the Conservatives failure to honour their Welsh general election manifesto promise in 2011 to increase the 1 MW limit for off-shore and 50 MW for on-shore threshold for planning for energy projects does not help us here in Wales. This failure effectively prevents the development of potential energy schemes above that threshold as they have to be decided in Westminster rather than in Wales.

Plaid MP Jonathan Edwards (in January 2012) called for energy powers to be transferred to the Welsh Government, his bill would have given the Welsh Government powers over energy generation in Wales. The bill (blocked by Labour and Conservative MPs, defeated by 239 votes to 44) would have ensured equality with Scotland and Northern Ireland and would have meant that Wales would have been better placed to fight fuel poverty with responsibility for our own resources.

I have some serious concerns about any Severn Barrage, it does not generate enough energy over a long enough period to justify the cost and it would be environmentally damaging. A more logical solution would be to build tidal lagoons, one in Swansea Bay would be ideal to test out the technology but has been repeatedly stalled and delayed by a hostile Department of Energy and Climate Change (DECC) and then powerless (but now vision-less and clueless) Welsh Government.

The last thing we need to do is limit the amount of sustainable energy we can develop, we need to maximise the period of generation well beyond the 3 hour energy pulse offered by all previous incarnations of the barrage. A combination of tidal lagoons and other energy schemes could offer release energy for a far longer period than 3 hours and minimise any damage to the environment. By using a variety of options we could generate sustainable jobs and make Wales a world leader in developing the energy generation technology.

TREASURY MESSES WITH CLEAN ENERGY

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.

A POVERTY OF IDEAS?

It's official, more than a fifth of all households in the UK were affected by fuel poverty in 2009, so says the Department of Energy and Climate Change (DECC). Repeated increase in fuel bills mean that the number of homes affected rose by one million, or 22%, to 5.5 million. The government defines fuel poverty as being when a household is has to spend more than 10% of its income keeping warm.

DECC noted that "between 2004 and 2009, energy prices increased: domestic electricity prices increased by over 75%, while gas prices increased by over 122% over the same period" and this led to the rise in fuel poverty. They (DECC) also predict that the numbers for 2010 and 2011 will have increased because of further rises in the price of energy.

Apparently the answer is more competition and the free market... Hmm...isn't that what we have all been living with (and paying for) over the last twenty plus years. An unregulated 'free market' or more accurately an largely unregulated privatised effective monopoly has clearly not worked. Surely to continue to repeat the mistakes of the past is a bad idea to say the least...or is HMG too busy thinking about windfall taxes on excessive profits...

NOBBLED? - SURELY NOT?

News that the Com Dem Coalition Government has quietly shelved plans for an independent inquiry into the £25 billion-a-year energy industry which has been subject to lengthy and repeated criticisms surrounding accusations of profiteering on electricity and gas, should come as no surprise to even the most impartial observers of the consequences of a warm relationship between the political parties within the Westminster village (and without) and the energy supply companies.

Interestingly enough, for sometime before the last Westminster general election, the Conservatives and the Liberal Democrats made repeated criticisms (and much political capital) from New Labour for its failure to tackle prices charged by the Big Six suppliers. Both the opposition parties publicly and repeatedly demanded an inquiry by the Competition Commission. 

There was a hope that an inquiry into the nefarious activities of the energy supply cartel (sorry companies) might have had the power to reform the industry, encourage new entrants to break the hold of players such as British Gas and EDF on 99 per cent of the market and even possibly impose price caps. Yet, it appears that barely four months into the Coalition Government, there will be no inquiry has been called for and the Department of Energy and Climate Change confirmed on the 17th August that it has no plans to refer the industry to the Competition Commission.

Hmmm... perhaps there ought to be an inquiry into the dubious (and financial rewarding (in cash and kind) relationship between our political parties and the representatives of the energy supply companies who are keen to shower enough goodies around during Party conference season (and beyond) - perhaps not?