UK Prime Minister under fire for energy announcements
Following announcements by UK Prime Minister David Cameron suggesting his government will roll back obligation quotas for utility companies as well as this week announcing a price deal struck with EDF for Hinkley point C Nuclear energy facility, there has been a strong response from industry, the Opposition government as well as a rebuke form the leader of the government's coalition party.
Cameron pledged to roll back some of the green regulations that were pushing up consumer bills during Prime Minister Question time in a move that surprised his coalition partner, Deputy prime Minister Nick Clegg who made it clear he was unaware of such a decision and that it would be Cameron's own goal. Some quarters of the media suggested Cameron was making a weak appeal to appease both consumers and utility giants as DECCs own figures showed the renewable costs to consumers bills was only 9 percent of the overall bill. Clegg even suggested that the bulk of the increases came form wholesale prices.
The Renewable Energy Association immediately called for the Prime Minister to clarify his comments with the fear that he could cause investor disquiet. The UK Building Associations condemned his comments as ill-advised but that is mostly due to the fact that Utility Obligation Requirements have been a huge boon for the building industry with over a quarter of a million houses retrofitted to meet the required improvements in energy savings. The economic benefit of the scheme has reached much further than the household bill as suggested.
REA Chief Executive Dr Nina Skorupska said, "David Cameron must clarify which levies he is looking to roll back and how, or risk severely undermining investor confidence at a time when this country desperately needs investment in new low carbon capacity. Renewables are the only low carbon options on the table to bridge the near term capacity crunch, which will bite well before new nuclear or shale gas come on-stream.
Opposition leader Ed Milliband accused the Prime minister of being held by big business and lacking the courage to take on the big six utility companies. Cameron responded by saying there was a need to properly look at what is causing the price increase.
"Renewables policy makes up only 3% of average bills overall and only a third of the Government's "˜green levies',' stated Dr. Skorupska. " Politicians and the media are simply wrong to say that green energy is to blame for pushing up bills. It is the ever-increasing cost of gas which has been the main cause of rising bills in recent months and years. With more energy-efficient homes and more home-grown renewables we become less exposed to these volatile gas markets."
The Government also came under attack for announcing details of the Hinkley Point C Nuclear energy facility that detractors say will take a decade to complete when recent studies suggest energy problems may begin in only two years. Renewable energy interests around the country reacted with concern that the same money invested in renewables could achieve the required returns in two years.
Mark Turner, Operations Manager at Lighthouse Renewable Energy, a large UK solar power generator took the step to release an open letter to Mr. Cameron as well as sending it to all Cabinet and Shadow cabinet ministers. Part of the letter reads as follows.
"It is our belief that something needs to be done now to address our energy security needs. We must act to protect consumers from energy prices that have risen by over 25% since 2009. We urge you to move from debating about taxes on energy bills and take a serious look at how our future energy needs can be met sustainably. Only then can we gain true energy security in pricing as well as supply.
We believe that solar power can provide energy security quickly, reduce electricity bills and protect the environment at the same time. It not only provides for the local electricity demand, but contributes to the stability of the rural economy and creates local jobs. The solar sector in the UK is gaining traction and the experience in Italy and Germany has shown that the solar industry has the capability to deliver the same energy production as Hinkley Point C in less than 2 years and at a comparable cost. However, announcements such as those you made will shake investor' confidence in the important role the Government has to play in providing the modest and declining support that this nascent business sector receives until it becomes fully self-sufficient.
As a nation, we have the capability to take this matter into our own hands, by educating ourselves about responsible power generation and looking at the options available. Solar power will not be the entire solution but if we supported its deployment then within a couple of years we could have 10% of the UK's energy mix completely free from the vagaries of the global fossil fuel markets. This would then combine with the 9% from Hinckley Point C when it eventually comes on stream. We urge you to provide more education and resource to the nation regarding the true benefits of solar power technology and make the nation aware that we can take this whole matter into our own hands if we chose to."
A recent study showed that new solar is now cheaper than new nuclear energy and the pace of policy decisions does not always keep pace with technology cost improvements. Solar continues to reduce in price while improving in technology and the government needs to ensure that the most up to date knowledge is accessible in making decisions. The overall reaction to the recent announcements suggests energy will remain a contentious topic in the region.
REA's Dr. Skorupska added, "In return for investing in renewables now, we create skilled green jobs in innovative new industries, bringing areas of previous industrial decline back to life. In the long-term we will also get lower, more stable energy prices and preserve a climate which is safe for our families in the future."