Ask yourself this: Who should be happier about the EU's proposed 2030 energy and climate strategy, the chief executive of a coal company or the chairman of a wind turbine manufacturer? Does this package favour the manufacturer of gas-guzzling SUVs or the pioneer in electric vehicles? Does the promise of a new emission target for the EU suit investors in fossil fuels or investors in clean technology? As the architects of a previous project in European integration once asked - cui bono?
To me the answers to these questions are obvious. The European Commission and its most powerful member states have sent a pretty unequivocal signal that despite the biggest crisis in the bloc's history they remain committed to decarbonising the continent's economy by embracing cleaner technologies and business models. They accept the immense risks presented by climate change and the economic damage caused by footing the bill for billions of Euros of fossil fuel imports. They have done the economic modelling and concluded, with good reason, that a low carbon economic transition can be achieved at a manageable short term cost and in a way that unleashes significant long term benefits. They are telling business leaders and investors that throughout the 2020s the EU will continue to deliver sizeable annual emission reductions, will continue to increase its reliance on renewables, and will continue to push up the cost of carbon for fossil fuel companies.
And yet to judge by some of the reaction from green business groups and NGOs you would think the EU had just torched its climate commitments and sent its environmental credentials up in smoke. The Commission has become "a shadow of its former self", complained the European Wind Energy Association. It was "a depressing day for Europe", said the European Alliance to Save Energy (EU-ASE). The White Paper contains "a set of proposals that will satisfy almost no one", observed Greenpeace, with a considerable degree of prescience.
These reactions are, in many ways, justified. Given the scale of the climate change threat the EU's targets are nowhere near ambitious enough. With scientists recommending the EU should be aiming for emission reductions of more than 50 per cent by 2030 to reduce the risk of dangerous climate impacts, the Corporate Leaders Group on Climate Change are being generous when they say 40 per cent represents the "minimum level of ambition" that we need. The weak renewables target may make sense as a compromise with those who argue technology specific targets are economically inefficient, but it also dilutes an important long term driver of investment in technologies that could deliver low cost energy in the future. The refusal to deliver clearer and more ambitious targets for energy efficiency is little short of insane given everyone agrees it represent the most cost-effective means of reducing emissions. In this context it is easy to understand the anger and frustration felt by many within the green economy, particularly when you consider what is at stake.
But while green businesses and NGOs need to be aware of the new framework's weaknesses and should continue to call for them to be addressed, fixating solely on the problems with the package risks diluting the impact of the positive clean tech investment signals the EU's new proposals send.
Ultimately, officials in Brussels cannot click their fingers and magically guarantee that emissions are cut by 40 per cent of 50 per cent in 16 years' time. As Green Alliance's Alastair Harper argued yesterday all policymakers in a democracy can ever do is try to steer investment away from high carbon infrastructure and towards low carbon alternatives. In this respect, the new framework sends some strong signals that low carbon investment is the way forward - the EU's emission reduction trajectory will be steepened during the 2020s; investment in renewables, particularly in those countries who want a legally binding target, will continue; the environmental regulations governing new fracking projects will have to be tighter than the industry's cheerleaders think; and the overarching business case for clean technologies will be strengthened. Anyone doubting this should look at Thomson Reuters Point Carbon's early analysis of the Commission's proposed reforms to the EU emissions trading scheme and their prediction the average price of carbon will stand at €35 between 2019 and 2030 - still not high enough, but a big leap in the right direction.
The Guardian's Damian Carrington today rightly characterised the EU's proposals as a classic case of the glass being half full - given the still bleak economic backdrop in many EU countries the targets were stronger than many expected, but were still far short of what is needed. However, it is the job of green businesses, investors, and entrepreneurs to see the half full side of the glass, not least because the only way the EU can deliver the green economic growth and deeper cuts in emissions that are required is for innovators to develop even more cost effective clean technologies and even more competitive green business models that will allow the bloc to again far exceed the targets set for 2030.
As the recent rapid reduction in the cost of renewable energy technologies and the emergence of ultra-efficient new buildings and vehicles proves, such over-achievement is entirely possible. But it will only be realised if those business leaders who are committed to the green economy refuse to be disheartened by the fact that the European Commission's policies could and should be better.
Instead they should return to those original questions about whether it is the green economy or the high carbon economy who are the long term winners from today's announcements. Apologists for the unsustainable and carbon intensive status quo may be celebrating this evening having secured some watering down of the Commission's more ambitious proposals, but their celebrations look more like a retirement party than a coming of age. With the prospect of at least a 40 per cent cut in emissions within 16 years and a carbon price of €35 plus I'd much rather be the boss of a renewable energy company than the boss of a coal company. Savvy investors will realise that today's announcements represent confirmation that in the depths of an economic crisis Europe's leaders, including its most powerful economies, remain committed to decarbonisation. This decarbonisation might not be happening fast enough, but increasingly the smart money is focused on making it happen faster, not slowing it down.
The battle for the future of Europe's green economy is not won yet. Months of negotiations await and even if the Commission's proposals were adopted exactly as they stand they still fall a long way short of what is required. But these proposals provide a further boost to clean tech investor confidence and a further signal that, despite all the protestations from the right wing media, policymakers remain convinced that the low carbon transition is in their electorates' best interests.
Cui bono? All of us, that's who.
13 Jan 2014
With a crushing predictability the Prime Minister's confirmation the UK is "going all out for shale gas" has sparked a fiercely divided reaction, as battle lines have once again been drawn between whose who wish to see a moratorium on all fracking everywhere and those who insist onshore oil and gas offers a panacea to our myriad economic, energy, and environmental woes. Meanwhile, those who argue that it is still too early to determine whether shale gas is either hero, villain, distraction or non-event have once again struggled to make their voices heard.
This more nuanced analysis is centred on two arguments, both of which make the shale gas industry cheerleading currently being undertaken by the Prime Minister and the industry look both premature and irresponsible.
The first is that the UK's shale gas potential is being over-hyped to a ridiculous degree. As numerous commentators, including former BP boss and Cuadrilla chairman Lord Browne have pointed out the UK's embryonic shale gas industry will have to deliver a "gigantic amount of gas" if it is to have a "material impact on price". The industry will have to overcome rapid well decline rates, local opposition to developments, and other technical challenges if it is to make good on government ministers' hugely optimistic predictions. Many critics maintain shale gas is more likely to provide a marginal addition to the UK's energy mix - which doesn't necessarily mean we shouldn't explore its potential, but certainly means we should resist the temptation for it to distract us from the pressing task of delivering a new low carbon energy infrastructure. As the CBI's Nicola Walker declared this morning, "it will not be the silver bullet that solves all our energy needs".
The second, and in many ways more important argument, is that if the industry's optimistic projections prove well-founded and the UK can deliver a "gigantic amount" of domestic gas then it runs straight into serious debate about the scale of both its local environmental and global climate change impacts. The government's most recent report on the UK fracking industry may have been seized upon by Ministers as further evidence that the sector presents an "exciting prospect" for the UK, but it also detailed how under a "high activity" scenario the industry would have to wrestle with "significant negative effects", including "an increase in traffic congestion, emissions and more pressure on water resources".
Today's announcements on business rates, community benefits, and Michael Fallon's erroneous assertion that a "robust" regulatory framework will only allow fracking to go ahead if it is "absolutely safe" (as I've argued before, no energy technology is "absolutely safe", the risks might be deemed acceptable, but it is misleading to suggest they don't exist) has to be seen in this context. The shale gas industry can only deliver on the scale that Conservative Ministers hope if people can be convinced that its "significant negative effects" are both minimised and not that bad after all. The promise of "community benefits" or "bribes", depending on your point of view, is clearly designed to tilt the scales of public opinion in favour of fracking.
Despite intense local and national protests against fracking, this political decontamination strategy may just work. The scale of the community benefits on offer, coupled with the promise of tough environmental regulations and safeguards could be enough to allow some projects to proceed in the next few years. If they then prove successful, it will prove extremely difficult for a cash-strapped government to resist the urge to expand the industry.
However, as the shale gas sector today attempts to reinvigorate its attempts to win over the communities, politicians, and business leaders who will ultimately determine whether it can establish itself as a large scale industry it is still failing to address legitimate concerns about its climate impacts.
As a climate hawk, I'd argue it is these climate impacts that should ultimately determine the future of the UK's shale gas industry. Yes, local environmental impacts are important and projects should only more forward at appropriate locations where these impacts are minimised. But all forms of energy generation have local impacts, be it the visual impact of wind farms, the air pollution impact of coal and gas plants, or the water impact of gas wells on the Russian Steppes or the American plains. If the UK is going to continue to use gas for the foreseeable future, and like it or not we are, there will be local environmental impacts somewhere. It is nimbyism to argue they should not be here.
However, if the UK shale gas industry can mount a strong argument that local environmental impacts can and will be minimised, the argument it can aid decarbonisation and is definitely compatible with UK, EU, and global climate change goals is far more questionable. This argument was neatly summarised today by shale gas developer Igas' Andrew Austin, who told The Guardian, "the enemy in this agenda is coal. Shale gas is the same as any other form of natural gas. If you use that locally you're supporting decarbonising, you're displacing coal and you're supporting renewables". It is an argument that has been trotted out time and again by shale gas industry supporters. Gas is less carbon intensive than coal, they argue, it can cut emissions by replacing coal while providing back-up for intermittent renewable energy sources, and can then be decarbonised further in the future through carbon capture and storage technology. The problem is, as far as I can see, the industry is doing next to nothing to make sure this environmentally responsible emissions reduction scenario comes about.
Far from replacing coal, the government's most recent report warned there were no guarantees UK shale gas would reduce greenhouse gas emissions and there was a very real chance it would lead to a net increase. It concluded that any increase in domestic shale gas production would most likely "result in substitution for Liquefied Natural Gas (LNG), with a negligible effect on overall emissions". Moreover, if this LNG is then shipped elsewhere, as it almost certainly would be, then global emissions would increase. It is depressing that this still needs pointing out, but if you extract and burn more fossil fuels you tend to get more greenhouse gas emissions.
The key point is that if the UK shale gas industry wants to be taken seriously as a player in the transition to a genuine low carbon economy - and there are people inside both the industry and government who sincerely claim they want this to be the case - then it has to offer much firmer assurances that it will indeed enable a sharp net reduction in greenhouse gas emissions.
On the policy front that means explicit and unequivocal support for a power sector decarbonisation target for 2030, a clear endorsement of the current fourth carbon budget and its stretching target for the mid-2020s, public backing for the UK's push for a more demanding EU emissions reduction target and reform of the emissions trading scheme that would push up the carbon price, even stronger regulations governing methane leakage and flaring, and the launch of a community benefit style fund to ensure the UK shale gas industry provides support for CCS demonstration projects.
The fact that the UK shale gas industry has failed to take an overtly public stance on any of these issues tells you all you need to know about its commitment to aiding the UK's decarbonisation efforts. Compare the industry's promotion of its community benefits pilot and its lobbying for a supportive tax and planning regime with its near complete silence on climate change policy and it is clear that shale gas' promised emissions reductions need to be taken with the proverbial truck load of salt.
As I've argued before there may be a case for some fracking in the UK, but if we are really to go "all out" for shale gas then the industry and government need to demonstrate much more convincingly how a large scale domestic gas industry makes sense at a time when the UK has less than 20 years to decarbonise much of its economy. We need stronger safeguards to ensure UK shale gas helps rather than hinders decarbonisation, and until we have them it will remain all but impossible for green businesses and NGOs to support UK fracking.
10 Jan 2014
Back when I was an English Literature undergraduate (I know, I am yet another under-qualified humanities student writing about science and technology; I am part of the problem, I get it) I spent about six months completing a course on African-American literature. It was one of those courses that would give Niall Ferguson palpitations: the primary focus, beyond familiarising students with some amazing and criminally neglected literature, was on the manner in which African-American cultural products, from Frederick Douglass to Jay-Z, were informed by the economic and political context in which they were produced.
As such the course explored numerous texts that highlighted two underappreciated, yet incontestable, realities. The first was the manner in which the horrors of slavery were experienced, albeit in searingly different ways, by all Americans, and by extension the whole world. The brutal system of slavery - as powerfully demonstrated in Solomon Northup's testimony, the memoir that provides the basis for Steve McQueen's soon to be released 12 Year's a Slave - provided the foundations for American and European economic growth and was interwoven into every aspect of existence at the time, however opaque the links may at times have appeared. It is a fact oft-highlighted by the analysis of how Bristol's 18th and 19th century success was based on plantation wealth or the observations about the number of US presidents who owned slaves. But a reading of both the canonical and neglected literature from the period serves to emphasise the all-encompassing nature of this appalling system in a way historical documents often struggle to do so.
The second reality was the way in which events from the 17th, 18th and 19th century have swept through history and generations in a way that is still painfully evident today. When you think about it, it is almost perverse that discussions about US inequality so rarely acknowledge that we are only a handful of generations on from emancipation proclamation of 1863. So many of the socio-economic challenges faced by the US, not to mention Africa and Europe, have their roots in that benighted, dehumanising system of exploitation and brutality - this fact is so self-evident that it is bizarre that it needs mentioning and yet the topic is barely mentioned in modern political and economic debates. Equally, countless cultural texts and the tropes they explore have been and are still being informed by this history, with patterns, techniques, and genres echoing through the ages. There are numerous examples, but perhaps the most well-known is the manner in which spirituals informed blues and jazz, which have in turn gave us hip-hop, before it came to shape all modern pop music.
I distinctly recall our lecturer at the time highlighting the historic proximity of slavery by demonstrating how the great grandparents, and perhaps even grandparents, of the grandparents of our almost universally white English Literature class would almost certainly have worn cotton picked by slaves. Someone born in 1920 and alive today may well have known elderly relatives born in the 1850s who either directly or indirectly experienced US slavery.
The reason I've been thinking a lot about a lecture theatre from 10 years ago is that the past few months has seen the climate change debate informed by what I regard as a highly dubious fixation on short term concerns - and by short term I mean up to 2100.
A lot has been written in the past about the tactical and strategic lessons environmentalists can learn from successful campaigns for socio-economic transformation, such as emancipation, universal suffrage, and civil rights. But what these analyses often fail to emphasise is the way in which the success or failure of these campaigns is felt decades and centuries later.
Just to be absolutely clear I am categorically not arguing that there is an equivalence between the current carbon reliant economic system and the economic systems underpinned by slavery, sexual discrimination, or apartheid. Environmentalists can learn a lot from previous economic transitions and humanitarian campaigns, just as they can learn a lot from the industrial mobilisation achieved during the war years, but the parallels are not exact. Decarbonisation is not the same as ending slavery, just as it is not the same as mobilising for war, despite the tendency of some environmentalists to equate the green economy with these historic events.
However, there are similarities in the way that the implications of historic industrial, economic, legal, and political revolutions are measured using timescales that run into decades and centuries, not just the next quarter or the next political cycle.
When it comes to climate change, this historical perspective is hugely important and oft-ignored. The vast majority of climate models run through to 2100 and warn that we face hugely damaging warming of between 4-6C unless urgent action is taken to curb global emissions with almost immediate effect. Throw in the "known unknowns" that could materialise in the form of runaway climate change trigger points and the last few decades of this century could end up looking extremely bleak. But the world will not end in 2100. Unless we get a handle on climate change in the next few decades we risk bequeathing the next century environmental challenges so great they will make our current problems look like the Garden of Eden. The relatively few projections that have been done for the 22nd Century based on business as normal emissions suggest that climate change and ocean acidification could leave generations just a few decades hence with a biosphere only science fiction directors would recognise.
Does any of this matter? None of us will be around to see it and we all know that economists discount future generations. Besides, some of the short term impacts of climate change may actually benefit us, as everyone's favourite climate contrarians keep arguing.
Well, I'd argue it does matter. It really matters.
First, some of us will see it. As I've argued before, if I live as long as my eldest grandfather I will see the 2070s. A child born today, and you'll probably each have your own young relative to think of here, has a good chance of seeing the turn of the century. The future is unknowable, but it is generationally true that many of the grandchildren of my coevals will be able to remember us in 2150. In this context, I'm not sure how much the precise year that we get an ice free Arctic Sea matters if scientific projections are right and it is a likely occurence at some point in the decades hence.
Writing about HS2 recently, Times columnist Matthew Parris expressed his bemusement of the attitude of those in late middle age who dismiss the project on the grounds that they will never be able to ride on it, as if there is no merit in infrastructure that will benefit future generations. As the famous Ancient Greek proverb goes: "A society grows great when old men plant trees whose shade they know they shall never see". Exactly the same argument stands as one of the primary reasons why urgent action to tackle climate change is not just economically sensible, but morally essential.
This is one of the main reasons I find those arguments that accept manmade climate change is happening, but insist we should relax because some climate impacts may benefit us, because we are uncertain about the precise nature of the impacts, or because a silver bullet technology will make it easier to combat in the future so flawed. Not only are they guilty of blatant cherry-picking from climate models to support their case, but they operate on the reckless assumption that in just a few decades time we will somehow solve this problem and we need not worry about it too much in the meantime. We are being asked to play Russian Roulette and the point at which we get to pull the trigger isn't even that far away. Even if the suggestion climate change benefits outweigh costs through to the 2060s is valid - and there are plenty of scientists and economists who argue that it is not in any way valid - many of us will still be alive in 2070. I'm not sure about anyone else, but I don't really want to live through the results of an experiment on the biosphere during my last few years on this mortal coil.
Of course, advocates of this relaxed approach to climate change would argue that something will turn up to address the problem and in the meantime the current generation must take primacy and we must do all we can to help poor and vulnerable communities now, including by giving them access to low cost dirty power. There is some genuine merit in this argument, but it rather ignores the fact many of these communities are already being impacted by climate change, they would prefer cost effective clean power (a reality in many parts of the world) over dirty power, and regardless of short term concerns absolutely no one will thank our generation if the worst case climate scenarios prove even halfway accurate. Moreover, simply hoping that the technology fairy will save us is the very height of recklessness when the stakes are so high.
Does this matter to businesses, particularly when they face such intense short term challenges? Well, it matters to those businesses that have been around for decades and want to be around in decades hence. There are many great corporate institutions that were founded during the last industrial revolution and want to prosper during the next industrial revolution. There are even some that played a role in either prolonging or challenging slavery, much as they may like to now forget that part of their history. Virtually all businesses will want to still be around in the 22nd century. Moreover, any political or business leader who puts any truck in the concept of legacy - and don't they all? - must realise that where they stand on climate change has the potential to echo through the ages.
There are numerous short to medium term reasons why the world should mobilise urgently to build a low carbon economy. BusinessGreen reports on them every day and they include, but are not limited to, the need to minimise the climate impacts we will experience in the next few decades, the health benefits associated with cleaner air, water and soil, the economic benefits associated with resource efficiency, energy efficiency, and less volatile energy sources, the commercial gains that will come from new green technologies, and the humanitarian benefits that could be realised through a more sustainable agricultural system and better fisheries management. But there is also a compelling long term reason for action that can best be articulated by a simple question: How do you want the students of the 2150s to remember us?
Two years ago Shadow Chancellor Ed Balls used his Labour party conference speech to attack the government's failure to deliver a coherent infrastructure strategy, accusing ministers of repeatedly ducking tough decisions (I know, plus ca change). Rattling off the long list of internal coalition battles over Heathrow expansion, renewable energy and HS2, he argued that politicians had a responsibility to decide the future mix of the UK's infrastructure investment, culminating in an assertion that "we must decide how we are going to protect our country from rising sea levels and exceptional rainfall".
After the speech I remember discussing its implications with Green Alliance's Alastair Harper, who highlighted the mention of flood risk as being particularly politically canny. "There are a lot of marginals in the north and west that keep getting flooded," he noted. "There could be votes in flood protection."
I was reminded of this exchange today as David Cameron faced a gentle grilling at the first Prime Minister's Questions of the year over his government's response to some of the worst floods in living memory and its wider response to the worsening impacts that climate change threatens. Climate change may occasionally drift from the top of the political agenda, but the all-encompassing and existential nature of the risks it presents means that it has a nasty habit of forcing politicians to engage with the issue from time to time.
Responding to questions from Labour's Ed Miliband and the Lib Dems' Tim Farron on, respectively, the adequacy of Defra's flood preparedness and the link between climate change and increasing extreme weather risks, Cameron promised the government would report back on its flood resilience strategy and acknowledged that, while "colleagues... can argue about whether [extreme weather] is linked to climate change or not, I very much suspect that it is".
The Prime Minister made these assertions knowing full well that Labour's request for a more detailed response on the UK's flood preparedness is a trap designed to discomfort a Conservative Environment Secretary who does not accept that climate change is a serious risk to the UK and who has overseen real term cuts to flood resilience spending. He made these assertions knowing that his 'suspicion' that there is a link between increased incidents of extreme weather and climate change would make some of his climate-sceptic colleagues apoplectic. He made these assertions knowing that things could get very difficult politically if a fight over climate change policy highlights the incomplete nature of his modernisation agenda and the deep divisions within his party on a host of green issues.
And yet he still made them, in part, I believe, because he still regards climate change as a serious issue that requires a serious response, and in part because what else could he do? With flooded communities still facing massive disruption, soaring clean-up costs and in some cases tragic loss of life, it is the responsibility of a Prime Minister to both explain how the UK can minimise the risk presented by flooding and engage seriously with scientific warnings that these risks will escalate.
Inevitably, the UK's small but depressingly influential band of 'climate sceptics' seized on the Prime Minister's comments and set about trying to demonstrate why he is being delusional to so much as 'suspect' a link between climate change and extreme weather. But as everyone who engages honestly with this topic knows, while the link between climate change and extreme weather is complex and contested, some things are pretty close to certain. As Reading University's Professor Richard Allan explained in a post for the Carbon Brief blog today: "While individual storms or successions of storms cannot be linked directly to climate change, there are some aspects of a warming climate that are relatively well understood and have implications for the severity of impacts we suffer." What we do know is this: global average temperatures are on a long-term upward trend; the vast majority of climate scientists attribute this in large part to greenhouse gas emissions; this warming will almost certainly disrupt established weather trends, such as those shaped by the jet stream; and basic physics dictates that it will allow the air to hold more moisture, making storms more powerful and increasing the risk of flooding.
The reason the Prime Minister "very much suspects" there is a link between climate change and extreme weather is that, despite all the noises off, he understands these basic realities and was evidently listening when the UK's chief scientist recently briefed the entire cabinet on the conclusions of the IPCC report on the latest climate science. He also understands that, when climate impacts hit, voters are unlikely to be too sympathetic towards politicians who fail to engage properly with the risks they face (just as he understands that polling shows a high degree of public enthusiasm for the green economy that he once championed, before he got spooked by UKIP and his right-wing backbenchers).
In his impressive new book, The Energy of Nations (full review to follow shortly), clean tech entrepreneur and former oil industry geologist Jeremy Leggett describes this phenomenon as the "power of context" – the shift that occurs in public priorities and demands when the context of worsening climate change or an oil crisis prompts a mass realisation that the economy really is vulnerable to environmental and resource constraints. It is a riveting book that uses a history of the financial and energy scandals of the past decade to demonstrate quite how vulnerable these two all-important pillars of the economy are to the future resource and climate shocks that many informed insiders are convinced could hit in the coming decade.
As with anything to do with the energy industry and climate change risk, Leggett's conclusions (many of which warn that we are heading for a seriously tough time over the next two decades) are likely to be the subject of fierce debate, but few would argue that savvy political and business leaders need to be aware of this 'power of context'. Any business or government that claims to take climate risk seriously must also accept that when they do occur climate (and resource security) crises will only serve to demonstrate the wisdom of what advocates of the green economy have been arguing for years, namely that low-carbon and climate-resilient infrastructure and business models are much better protected against shocks than the current status quo. Under such a scenario those leaders who fail to manage these risks will face serious recriminations from customers and voters, just as those who have acted to alleviate climate risks will prosper.
There could be votes in flood protection after all, it just takes the power of context to see it.
18 Dec 2013
After more than two years, countless column inches, and a mind-boggling number of man hours, the Energy Bill has been granted Royal Assent. And now the hard work really starts.
For all its imperfections, for all the Ministerial casualties and media controversies, the arrival of the Energy Act on the statute book is a major achievement. It potentially marks a sharp and positive turning point in the UK's meandering journey towards a low carbon and sustainable economy. As Energy and Climate Change Secretary Ed Davey is keen on saying, this legislation will create the first clean energy market anywhere in the world. Regardless of what happens next, it is a historic development.
However, the policy framework delivered through this legislation will not magically deliver the clean, reliable and affordable energy infrastructure the UK urgently needs. Politicians, businesses and investors of all stripes now face the daunting task of making sure that the ambitious vision that underpins the government's electricity market reforms is delivered upon.
For the political class that means tearing down the remaining barriers that could discourage firms from investing in new clean energy infrastructure and correcting the flaws that remain in the legislation.
Most notably, those MPs who understand the importance for the clean technology supply chain of a decarbonisation target for 2030 need to keep pushing for the early adoption of a binding goal, just as those who have been warning about the loophole that will allow coal power plants to continue to pollute long into the 2020s and beyond need to continue to raise the alarm. More specifically, tomorrow will offer more detail on how the early stage contracts for difference (CfDs) will be dished out and how the promised capacity mechanism and development of an demand management market will be managed - investors urgently need to see ambitious plans and clear timelines for their introduction. Similarly, State Aid questions need to be resolved as quickly as possible if the UK's nuclear renaissance is to stand any chance of delivering power by the early 2020s as planned.
Going forward, more needs to be done to help overcome the technical and logistical challenges faced by clean energy developers, and in this regard news today that the Able Marine Energy Park on Humberside has finally been granted approval is hugely welcome. Equally, more needs to be done to ensure smaller independent energy suppliers really can compete on a level playing field with the Big Six.
Meanwhile, the entire green economy will be watching closely to see how the new electricity market reform programme is managed and how inevitable future changes to the regime are handled. There is little doubt some of the support levels delivered through the Energy Bill will be too high and others will be too low - that is simply the nature of technology subsidies. Ministers will need to manage changes in a mature manner if they are to avoid spooking investors, just as they will need to be extremely careful as they transition to a more cost effective mechanism of auctioning contracts.
A significantly more ambitious national energy efficiency programme is also urgently needed to help hold down energy costs and defuse the increasingly toxic accusations that this entire exercise will burden households and businesses with excessive bills.
Most importantly, perhaps, all three of the main parties will have to ensure that the policy foundations established by the Energy Act are built on through consistent and coherent political rhetoric and supporting policies. CfDs and the capacity mechanism might offer competitive returns for investors, but projects will still struggle to move forward if they are hampered by hostile planning policy, weak carbon taxes, and a nagging fear that some members of the government are so unreceptive to the green agenda that they would think nothing of trying to unpick a legislative framework that now unashamedly favours clean energy.
But while the politicians' to do list remains as long as ever, businesses and investors have responsibilities too. It may not be perfect, but the Energy Bill delivers much of what green businesses and NGOs have been calling for - stable and predictable financial returns for clean energy and back-up power capacity, an end to new build coal power plants in the UK, and a mechanism for encouraging energy efficiency and demand management technologies. This is a broadly attractive package of incentives and regulations at a time when the UK urgently needs to deliver new energy capacity - developers, investors, and energy companies need to respond.
We will only know in a few years' time if the Energy Bill has delivered, by which point it will probably be too late to tackle the energy and climate security concerns that sparked the bill in the first place if it hasn't worked. But as the Bill today secures Royal Assent, the opportunity on offer for those businesses willing to embrace it looks to be considerable. It is not perfect, but there are attractive returns on offer for those organisations that can deliver the well managed clean energy projects that the UK desperately needs. Meanwhile, businesses outside the energy sector need to be aware that while the Energy Bill will deliver greater energy security and lower carbon emissions it will also push up the price of energy, making investment in energy efficiency and engagement with the demand management mechanisms enabled by the bill ever more important.
The UK's energy industry is about to undertake one of the biggest transformations since its formation. And as every good entrepreneur knows, where there is change on this scale, there is also huge opportunity. Business leaders from across UK Plc need to now seize that opportunity. We have an Energy Act, now is the time for energy action.
ABOUT JAMES' BLOG
Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray