31 Oct 2012, 12:54
Every time you think British energy policy can't get any more ridiculously disorientating, another curve ball appears.
I know it is already a cliché to liken the real-life goings on in Whitehall with the fictitious events of The Thick of It, but John Hayes' catastrophic intervention on wind farm policy would make even Peter Mannion blush.
It now looks increasingly clear that what happened was this: Hayes was due to give a speech to the annual RenewableUK conference in Scotland, but having seen the hostility of his planned comments, energy and climate change secretary Ed Davey ordered him to not be so stupid and pull the section in which he declared "enough is enough" for onshore wind farms. However, somehow the key comments found their way to the Mail and the Telegraph (it is unclear if Hayes had sent them before Davey's intervention or completely defied his boss and leaked them after he was told not to use them), both of which duly gave them the front page treatment.
Having seen two of the UK's biggest papers trumpet the "death knell of wind farms", Davey went ballistic, Lib Dem sources briefed that Hayes had been very "silly", and a statement was issued reiterating that the government had in no way changed its wind energy policy. Just to ensure his humiliation was complete, it was even made clear that Hayes had been talking absolute cobblers when suggesting DECC's review of onshore wind would look at impacts on landscape and property prices. Then the prime pinister weighed in at Prime Ministers Questions and made everything as clear as mud once again, insisting there had been no change in wind energy policy, but hinting that things could change once current plans have been delivered.
Commentators have pointed out this morning that Hayes was simply triangulating: endorsing the continued development of onshore wind farms that are in the planning system in line with the government's goal of delivering 13GW of new capacity by 2020, while throwing red meat to the right-wing critics of wind energy. This is entirely accurate, and Hayes intervention should have next to no direct impact on many planned wind farms. But the mood music is appalling and will simply convince yet more prospective investors that the UK is not open for business when it comes to onshore wind. It is also politically counter-productive, as it alienates the clear majority of people who support wind farms, risks driving up energy bills by forcing the UK to invest in more costly low carbon alternatives like offshore wind and nuclear, and, worst of all for the Tories, makes people who are opposed to wind farms think they have secured a "victory", only for them to find that Hayes is actually talking about potential policy changes that are eight years hence and the wind farm that is proposed for their area is going ahead regardless.
I know green businesses and investors will be sounding like a broken record, but how is anyone meant to pursue low carbon investment strategies with any confidence when faced with this absolutely shambolic political positioning? In the past two months we have had the appointment of Tory ministers who are explicitly hostile to the entire concept of the green economy and low carbon energy to key positions, the clear fracturing of the Conservative Party over environmental policy, a still unresolved fight between the Department of Energy and Climate Change (DECC) and the Treasury over aspects of the Energy Bill that could and should have been finalised months ago, and the prime minister making up energy policy on the hoof and then refusing to correct himself when it became apparent that his plan for lower tariffs made no sense.
It is little wonder that an energy industry and renewables sector that is actually currently seeing record levels of new investment is terrified that its recent progress is about to be blocked.
For investors, energy companies and developers, far and away the worst aspect of this sorry saga is the staggering lack of clarity. Whether they want to invest in renewable energy, nuclear, carbon capture and storage, or even shale gas, companies are left with no real certainty as to how the UK's energy policy landscape will evolve over the coming years. They have been stuck in a holding pattern for two years now, driving forward low carbon investment under the current policy regime, while being unable to plan properly for the next 10 years. The Energy Bill and the Climate Change Act is intended to deliver much needed clarity, and hopes remain that the bill will result in a renewed surge in investment when it is finally published later this month. But leaving aside the fact that much of the crucial detail contained in the bill will almost certainly be delayed until secondary legislation, how can investors have confidence in the new policy landscape when the Treasury and the energy minister are constantly going off-piste and making it pretty clear they oppose key elements UK energy policy?
The problem is that energy companies and green businesses are being forced to wrestle with a scandalous democratic deficit that poses a serious threat to the UK's energy security and environmental targets.
The fact is that we know what the green-minded wing of the government wants. Through countless strategy documents, consultations, ministerial statements and media briefings, it is clear that the official government position is for a balanced energy mix broadly in line with the independent Committee on Climate Change's recommendations and based on renewables, nuclear, carbon capture and storage, and some gas in the medium term. We know the cost projections for this mix, we know the likely impact on carbon emissions, and we know the policy framework green-minded ministers want to introduce to deliver it.
But what do we really know about the pro-gas and anti-wind stance being pursued by George Osborne, John Hayes, Owen Paterson, and co? We know they do not like onshore wind, despite it being the most cost-effective form of large-scale renewable energy. We know they think gas is cheap, despite evidence to the contrary and warnings from the likes of the CBI that prices will continue to rise. We know they think shale gas is a wonderful gift from God that could help hold down gas prices. But we only know this from leaked letters, speeches that were never given, deliberately opaque addresses to conference, mealy mouthed quotes to journalists, and lots of off-the-record grumbling.
More pertinently, we do not know what evidence this alternative energy strategy is based on (it is said within Whitehall that the Chancellor has "his own facts" on energy and gas, but he is strangely reluctant to share them), we do not know what Hayes means when he says he supports the "right kind" of renewables, we do not know how much Paterson thinks wind energy subsidies should be cut, we do not know how much shale gas they think the UK can deliver, we do not know what the risk assessment looks like for a "dash for gas" policy. And worst of all, there is no way of finding out.
The Treasury has repeatedly refused to put ministers in front of the Energy and Climate Change Select Committee, the chancellor has failed to grant an interview explaining his stance on the Energy Bill, the prime minister is still yet to give a proper speech on energy and the environmental issues, the environment secretary is yet to give a straight answer to questions about whether or not he is sceptical about climate change science, and the energy minister does not have the nerve to explain to the wind industry what he means by "enough is enough", opting instead to brief the newspapers.
Whether you agree with my view that the government should continue with its stated strategy of delivering a balanced energy mix, or believe that this approach is costly and unnecessary and we should pursue a dash-for-gas strategy is kind of beside the point. How can anyone make any serious decisions when one side of the debate refuses to make its case in public and reveal which "facts" it is using to justify its position? The anti-green Conservatives might have a compelling argument to support their opposition to wind farms and their support for gas, an argument so convincing it changes the opinion of the two thirds of people who consistently favour renewables over all other energy forms – if so, let's hear it.
After all, this is not The Thick of It. We are dealing with issues that will have a major impact on the future prosperity and security of the UK, not to mention the state of the planet. Debating these crucial issues through the pages of the Daily Mail is not just bad politics and catastrophic policy making – it is an affront to democracy.
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Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray