Skip to content

Green Energy Policies May Be The Casualty Of Coalition Warfare

Some political commentators are predicting that a formal break-up between the Liberal Democrat and Conservative parties may happen within months. And if an early general election does come to pass, is it fanciful to expect the Conservatives to win a majority and move energy policy in a new direction — away from renewables?

Certainly, the background noise from the traditional supporters of the Conservatives in the media is worrying. The Daily Mail and The Sunday Times have been lamenting the high cost of the green revolution.

The latest was a volley of criticism under the emotive headline: “Blowing billions on the fantasy of wind power.”

It is widely believed that the government’s green flame has been kept burning by the Lib Dems — traditionally strong supporters of a low-carbon Britain.

Lib Dem Member of Parliament Chris Huhne, the Energy and Climate Change Secretary, has been seen as fighting hard for renewables in the face of a sceptical Treasury. Now, he is at the centre of a stand-off with his ministerial “allies” over the proposed alternative vote (AV) system, which will be the subject of a national referendum on 5 May.

He alleges that claims against AV made by Prime Minister David Cameron, Chancellor George Osborne and other Conservatives undermine the “No to AV” campaign’s credibility. Huhne says that prominent points made by the Conservatives — that a move to AV will necessitate new vote-counting machines and cost as much as £250m ($414m), and that it will favour extremist parties — are untrue. “If they don’t come clean on this, I am sure the law courts will,” he seethes.

That statement is seen in some quarters as a legal threat against his coalition colleagues, while Business Secretary Vince Cable, a fellow Lib Dem, has talked openly of his desire for a new pact with the Labour Party.

Success in the referendum is crucial for the Lib Dems, for whom electoral reform is a flagship policy. Defeat — especially after a “dirty” campaign — could lead the party to rethink its role as a coalition partner.

Political commentators are suggesting that a general election is possible this year, and that such a poll could spell disaster for the Lib Dems.

So, what would the future hold for green-energy policies if the Conservative Party won overall control?

It is wrong to believe that the Conservatives have no commitment to a clean-tech future. Cameron was their first leader to invite voters to “vote blue [the traditional colour of his party] and go green”. And he followed that by pledging to create “the greenest government yet”, despite Conservative-run local councils often being the slowest to consider applications for onshore wind farms.

The coalition has pressed ahead with a range of positive policies, not least a green investment bank and a floor to the carbon price, while scrapping plans for a third runway at Heathrow.

But like the previous Labour government (prior to its last two years in office, when it moved swiftly forward), the coalition has talked a better game than it has walked. The Confederation of British Industry — a conservative group if ever there was one — has just made this same point..

The potential problems are many:

  • the carbon price floor will only be meaningful if it is set at a suitably ambitious level, but speculation suggests it will be fairly low;
  • the green investment bank will come into operation next year, but has been set modest goals and will not be able to borrow money until 2015;
  • the Department of Energy and Climate Change has upset investors by suddenly reducing the feed-in tariff available to solar schemes; and
  • the Department for the Environment, Food and Rural Affairs has been hit with the biggest cuts in departmental budgets. There are also fears that organisations seen to be close to the right wing of the Conservative Party — such as the Renewable Energy Foundation (REF) — are trying to undermine wind.

The REF recently highlighted the failure of previous governments to meet renewable-energy targets in a report that claimed the UK had spent more than £6bn on the Renewables Obligation since 2002 and yet produced only 6.5% of the country’s energy needs from green sources — not the 10% promised by 2010.

It highlighted poor and declining load factors from onshore wind farms and questioned whether the system is affordable.

The same line has been pushed with alacrity by natural-gas companies, which are arguing that carbon can be cut more quickly and cheaply by swapping coal for gas-powered stations. The general financial environment is chilly, given the scale of the UK’s budget deficit — something that cannot be blamed on the Conservatives.

But confidence in the renewables sector has been nervy in recent months and the row over AV can only make things worse.

Recharge, 28 April 2011