Energy Bill critical
Energy Bill critical
The much anticipated Energy Bill is a critical opportunity to solve a number of problems at once.
Despite a few selective, vested views, there is general agreement that action is needed on climate change, principally by reducing the output of Carbon from our homes, workplaces and communities. The UK is part of a binding agreement that commits reductions of one third of our Carbon output by 2020, two thirds by 2030.
The government's approach to achieving this outcome since coming to office has been inconsistent. The first decision to defer a £1bn investment in Carbon Capture and Storage was a short-sighted an damaging decision, not just on Carbon reduction, but also as the north east and Yorkshire, areas particularly subject to relatively high unemployment, were in pole position to maximise economic benefits from CCS.
The mix of energy supply is one of the key mechanisms for supporting such a dramatic reduction, demanding a dramatic increase in renewable energy production. Here again the messages from government have been confused. On Solar energy the debacle over the feed-in tariffs and subsidy has led to a drop in consumer confidence and the industry forced to lay off thousands of workers taken on only a year or so ago on the basis of previous government policy.
The UK has the best natural resources in Europe to take advantage of growth in offshore wind energy, the north east arguably the best in the UK. Growth in this area is much more sluggish than was being predicted before the last election. Much of the stagnation is due to uncertainty around electricity pricing, subsidy and Electricity Market Reform. Quite simply, major primary investors are not able to calculate the return on investment with any clarity, severely retarding the opportunities for an eager and capable supply chain in the region.
There are apparent tensions in the coalition. The Chancellor is known to favour gas-fired power stations and is keen to further reduce subsidies to the renewables sector, while the Liberal Democrats are keen to push the wind, wave and solar energy generation.
The rewards of getting the policy right demand cohesion, clarity and good leadership. The renewables sector currently employs around 100,000 workers, with the right support for industry that number could increase four fold. That support has got to include a much stronger green investment bank. The UK has pledged an investment threshold of £3bn over three years, a long way off the £200bn that is needed. Germany's equivalent of the GIB invests 25 times that on an annual basis, the renewables sector there employs over 370,000 workers.
We also need to support investment in energy intensive industries that have a relatively high Carbon output. Government needs to cushion the blow of Carbon reduction and also support technological innovation to enable those companies, in steel, process and chemicals, ceramics, cement and glass, to become much more energy efficient.
Getting this wrong will lose new job opportunities and cause thousands more job losses.
Kevin Rowan
Regional Secretary
Northern TUC
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