Saturday 22nd October 2016                 Change text size:

Industry reacts to government’s energy bill announcement

Photo: Martin Abegglen via Flickr

The government’s energy bill announcement has caused a divide in the UK energy and business sectors. Here’s a rundown of some of the most prominent comments to date.

Click here to read more about the announcement.

Andy Atkins, executive director, Friends of the Earth

“The coalition has caved in to Osborne’s reckless dash for gas and banged the final nail in the coffin of Cameron’s pledge to lead the greenest government ever.

“This decision motivated by outdated ideology will help keep the nation hooked on increasingly expensive gas, drive away green jobs and investment and jeopardise UK climate goals.

“But the fight is far from over – there’s huge public and business support for power sector decarbonisation. Politicians from all parties must fight in parliament against Osborne’s fossil-fuel addiction.”

Lord Deben, chairman, Committee on Climate Change

“The agreement on the levy control framework is very positive. This should be sufficient to support investments in renewables required to meet the 2020 EU target and carbon budgets, together with demonstration of CCS and investment in nuclear new build.

“We are disappointed that a carbon intensity target will not be set until the next parliament. This leaves a high degree of uncertainty for investors and does not address widespread investor concerns raised in recent months; it could adversely impact on supply chain investment and development of projects to come on line after 2020.

“It is essential now that delivery of the electricity market reform proceeds on the basis that this is aimed at achieving early decarbonisation of the power sector, which is the economically sensible path in a carbon and resource constrained world.”

Juliet Davenport, CEO and founder, Good Energy

“We look forward to seeing the details of the bill, but the lack of a firm decarbonisation target in today’s announcement is disappointing. It’s a missed opportunity for the coalition to make its commitment to being the greenest government ever clear. However, an agreement on government support for renewables is welcome news and will hopefully help provide greater certainty to the investment community. It’s time to put the confusion of the last few weeks behind us and get on with the job.”

Maria McCaffery, chief executive, RenewableUK

“This is a crucial announcement for the renewable energy sector. The news that there is rock solid support across government for renewable energy, and clear evidence that Treasury and the Department of Energy and Climate Change are in step, provide the industry with exactly the kind of assurances we’ve been calling for. This blows the last few months of political infighting completely out of the water.

“This is proof that the Treasury really does get it – the renewable energy industry offers one of our best hopes for economic recovery. This will stimulate billions of pounds worth of investment in renewables, creating more than 88,000 jobs in wind, wave and tidal energy alone by 2021. It will enable us to hit our 2020 renewable energy targets, and make sure renewables can play their part in protecting UK consumers from unstable international power markets – we’ve seen over the last few years that the cost of imported gas has caused the bulk of energy bill price rises, and developing our own resources helps counter that dependence and vulnerability.

“The UK government is sending a clear message that 30% of our electricity will be from renewable sources by 2020. The lion’s share will come from wind energy, with 31 gigawatts to be installed by the end of the decade.

“The government also clearly understands that there’s likely to need to be a decarbonisation target for 2030. That’s great news, which will retain investor confidence in the long term. Those investors put £2.5 billion into the industry this year – this will now increase exponentially. Now it’s full steam ahead, so let’s get on with it.”

James Cameron, chairman, Climate Change Capital

“The energy bill will finally give government the tools to attract significant investment into our power sector at least cost. Investment can now flow – creating jobs, helping recovery, spurring innovation – while ensuring our long term economic competitiveness.

“Progress will only happen if government wields its new tools wisely. At stake is a vision of the future. One where we are cleaner, safer and more competitive. Or one where we miss out on the clean energy revolution taking place globally, suffer from climate change and regret our exposure to volatile fossil fuel markets. The government will get the power to make the choice, it must pick a clean future over a failed past.

“To achieve progress quickly we also need clarity on how much renewable power should be built and by when to ensure investment in the UK supply chain. We need contracts for new generation to be signed quickly. And we need a national conversation on the strategic implications of our exposure to volatile gas markets.”

David Nussbaum, chief executive, WWF-UK

“The announcement by Ed Davey on the levy control framework is a step in the right direction which will at least give more confidence that the UK will meet its legally binding renewable energy target. This is good for reducing reliance on risky fossil fuels and good for the planet. However, the government should have taken the next step and backed a decarbonisation target in this bill and it is seriously disappointing that they did not.

“Having a 2030 decarbonisation target is nothing that Mr Cameron’s government should be afraid of given that it is a key requirement to deliver the legally binding Climate Change Act commitments, which Mr Cameron played such a key part in delivering almost exactly four years ago. 2030 is only one investment cycle away, and companies like Siemens and Gamesa wanting to invest in the UK’s renewable energy supply chain need to understand the government’s long-term commitment to the sector if they are to invest and create thousands of new highly skilled jobs in the UK.

“Mr Cameron claimed on Wednesday that he is leading a government that is not afraid of taking tough decisions. Yet he has pushed the decision to provide long-term clarity for investors back until after the next election, which will undermine continued growth in the one sector of the UK economy that has been most resilient throughout the recession. We need more courageous leadership than this.”

Mark Kenber, CEO, The Climate Group

“The long-awaited energy bill, despite its positive elements and increased support for renewables, is a missed opportunity. It does not put emissions reduction at the heart of the UK’s energy policy. It does not put the UK on a long-term low-carbon, sustainable, clean energy path. The bill is more of a grand compromise; and like all compromises it deals more with the present and the short-term than with the future.

“Unless there is long-term certainty for investors and clear signals that this country is open for low-carbon business in the long-term the UK will be left behind in the global cleantech race. The jobs that could be coming to the UK are going to go elsewhere. If we do not lead, we are bound to follow others who will.”

James Constant, chair,

“The impact of these increased costs will be a serious concern for businesses if it is applied to them.

“While the exact rise to business energy bills is currently unknown, we predict the energy bill will continually push bills up for businesses over the next decade. Our most recent Business Energy Barometer showed that as many as up to 300,000 companies could go out of business if energy bills continue to rise by 15% per annum, which looks increasingly likely due to these increases.

“It is admirable that the government is trying to place a greater importance on environmental goals. However, in the face of economic difficulties, it is questionable whether this is the best way to do it when considering the possible negative impact on businesses in the UK.”

John Sauven, executive director, Greenpeace

“By failing to agree to any carbon target for the power sector until after the next election David Cameron has allowed a militant tendency within his own ranks to derail the energy bill. It’s a blatant assault on the greening of the UK economy that leaves consumers vulnerable to rising gas prices, and sends billions of pounds of cleantech investment to our economic rivals.

“The stakes couldn’t be higher for our climate, our bills, and new green jobs, yet politicians could not be making a greater hash of it.”

Gaynor Hartnell, chief executive, Renewable Energy Association

“The commitment of the necessary budget for the renewable power sector to meet its share of the 2020 target, is very welcome news. This should help to draw a line under the recent politicking, which has been so damaging to investor confidence.

“Today’s announcements finally give a suggestion that the government is getting behind the renewables agenda, which promises 400,000 green jobs across power, heat and transport by 2020, along with a much more secure energy future.”

John Cridland, director-general, CBI

“This package will send a strong signal to investors that the government is serious about providing firms with the certainty they need to invest in affordable secure low-carbon energy.

“We now have political agreement on this critical issue and the government should get the bill on the statute books as quickly as possible.

“As more details emerge, the government should ensure that those households and businesses most vulnerable to increased energy prices are protected.”

Further reading:

No decarbonisation target in energy bill, but government promises investment certainty

Ed Miliband: green investors are ‘going elsewhere’ because of this government

MP claims investors could ‘lose interest’ in UK if energy uncertainty continues

David Cameron still needs to show real leadership in delivering a sustainable recovery

The Guide to Limitless Clean Energy

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