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Election promises on energy

By Dave Elliott

In the UK general election run up, with consumer power costs rising provocatively, there had been talk of a cap on energy prices and, in its election manifesto, although specifics were absent, the Conservative party certainly focused on economics. It said Our ambition is that the UK should have the lowest energy costs in Europe, both for households and businesses’ and it would aim for ‘competitive and affordable energy costs following a new independent review into the cost of energy’.

However, some of the technology choices have, it seems, already been made. Although the Party said we want to see a diverse range of sources for Britain’s energy production, because a diverse energy economy is the best way to stimulate innovation’ it also wants to ‘ensure that we are getting the right generation in the right place. For instance, while we do not believe that more large-scale onshore wind power is right for England, we will maintain our position as a global leader in offshore wind and support the development of wind projects in the remote islands of Scotland, where they will directly benefit local communities.’  Oddly, nuclear was not mentioned (arguably a high cost option), but the manifesto says there will be continued support for oil and gas exploration, including shale gas.

By contrast, Labour says it will ‘ban fracking because it would lock us into an energy infrastructure based on fossil fuels, long after the point in 2030 when the Committee on Climate Change says gas in the UK must sharply decline’, although it wants to protect jobs in the offshore oil and gas sector. However, its main thrust is more decentralist: it will ‘insulate four million homes as an infrastructure priority to help those who suffer in cold homes each winter’ and also looks to ‘the creation of publicly owned, locally accountable energy companies and co-operatives to rival existing private energy suppliers, with at least one in every region. And overall, it will ‘ensure that 60 per cent of the UK’s energy comes from zero-carbon or renewable sources by 2030’.

Controversially though, that 60% included nuclear, with Jeremy Corbyn saying ‘Labour supports nuclear power as an important part of a low carbon energy mix and would continue to support the construction of Hinkley C’. It also backed Wylfa.

The Green Party took a very different line on nuclear: ‘We will cancel the contracts for Hinkley Point C (saving £37bn), and scrap plans for all new nuclear power stations, instead investing in renewable energy, a flexible grid, and interconnection to Europe’. And its energy saving programme was more ambitious than Labour’s: a national programme of insulation and retrofitting to make every home warm – bringing two million people out of fuel poverty, insulating nine million homes, and creating hundreds of thousands of jobs’. But like Labour, it opposed fracking and looked to locally-owned alternatives to the Big 6 utilities – reaching, in its case, at least 42 gigawatts by 2025.

The Liberal Democrats similarly opposed fracking, and were quite ambitious on renewables and local projects, although only calling for a 60% electricity target for renewables by 2030. They would promote a Zero Carbon Britain Bill, with binding targets to reduce greenhouse gas emissions by 80% by 2040 and to zero by 2050. However, like Labour, they backed nuclear – though it has to be ‘unsubsidised’. Which seems impossible!   UKIP also backed nuclear, along with ‘shale gas, conventional gas, oil, solar and hydro, as well as other renewables when they can be delivered at competitive prices’. Uniquely, though, they want to withdraw from the Paris climate agreement and the EU Emissions Trading Scheme, and repeal the UK Climate Change Act.

So a range of policies are on offer, with some similarities, but also some differences and varying degrees of radicalness.  Just about all the parties back electric vehicles. The Conservatives say ‘We want almost every car and van to be zero-emission by 2050 – and will invest £600 m by 2020 to help achieve it’. The Greens call for ‘significant investment in vehicle electrification and charging infrastructure’. All but the Greens (and, in Scotland, the SNP) include nuclear. All oppose fracking, except the Tories and UKIP (but not in national parks).  All back renewables to varying degrees. Labour’s ‘60% low carbon and renewable energy policy’ is the most ambitious, but it includes nuclear and it’s a slight revision of the 65% by 2030 renewable electricity scenario outlined last year, which some saw as just about credible. Most stress the need to cut costs, but the Government’s controversial energy price cap idea seems to have slid a bit out of focus for now, although it may be back – if the Conservatives win. Labour too has promised something similar as an interim measure.

Either way, whatever the outcome of the election, the path ahead seems certain to involve continued expansion of renewables, although possibly at different rates and with differing emphasis e.g. the tidal lagoons were at one time a feature of Conservative policy, now only Labour specifically mentioned them! Although the Greens do include marine energy in their support package – along with an ‘end the effective ban on onshore wind – the cheapest form of new electricity generation’.  But whichever package emerges, there is already nearly 34GW of renewables capacity in place, and as prices fall, they could accelerate to much more – unless the investment needed for new nuclear eats into what is available.

However, all this is in the context of Brexit, which some say could have massive impacts on UK energy development. On nuclear – if, despite Labour and Lib Dem resistance, the UK does leave Euratom as planned: https://www.theguardian.com/business/2017/feb/28/british-nuclear-power-stations-could-be-forced-to-close-after-brexit. And on renewables – if the UK is not party to the new EU Energy Union. Climate policy issues may also be impacted, including continued involvement with the EU Emission Trading System. Signs are that the government wants to stay in that, but worryingly, adopting a pick and mix approach, some fear that, if re-elected, it may duck out of the EU energy targets.

So, there are some big uncertainties, which the election outcome may heighten. Though cheeringly the UK has managed to climb back into the Top 10 in Ernst and Young’s global ranking of renewable investment attractiveness, now appearing at No. 10 – up from 14.   But that seems mainly due to fall-backs by other countries. Although the UK offshore wind programme (now at 5.3GW) is unique and something to be proud of, Ernst and Young says. Ernst & Young also said The UK continues to underwhelm investors who are waiting to see if future UK policy will support and encourage the renewable energy industry towards a subsidy-free environment, where consumers can benefit from the UK’s excellent natural resources for renewable energy’.

Hopefully the election will provide some certainty. Hopefully too, it will be about more than just energy costs. Sensitive though that issue is, the impacts have to be put in context. At the very least we also have to factor in the future costs of climate change and air pollution.

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