Invest in battery development and green cars and back British science to lead the consumer end of energy revolution
Source: http://www.guardian.co.uk/commentisfree/2011/oct/13/climate-change-green-cars-energy
Electricity prices are so confusing that even the staff selling them cannot identify which is cheapest, Which? reported yesterday. The day before, one of the big six providers, Scottish and Southern Energy, made aheadline-grabbing announcement that it was to start auctioning its electricity on the open market, pre-empting a government initiative to try to increase competition. But on closer inspection, it turned out to be only the day-ahead market, where just 1% of domestic energy is sold. It is certainly a start, but only a small one – and it is all too typical of an industry where smoke and mirrors are a stock in trade.
The attention such stories now attract, however, is a reminder of how the politics of energy have changed. Where the soundtrack to the debate was once provided by the quiet whirr of a generating windmill, today it is the thud of the bill on the doormat that pierces through. Until this month, the coalition's green credentials were not too bad. Chris Huhne is an energetic secretary of state. His Green Deal, to make 14m homes energy efficient by 2020, is properly ambitious. His plans to tackle the market hold of the major providers are a good response to Ofgem's criticism. Helping cash-strapped domestic consumers, whose bills are inflated byclimate change policies by about 8% according to Ofgem, is absolutely essential to keep popular support for action alive.
But that is only part of the battle. At last week's Conservative conference,George Osborne attached a stick of dynamite to one of the key supports of climate change policy. He suggested policy was open to negotiation: "We're not going to save the planet by putting our country out of business," he said, undermining with a sentence the confidence that is fundamental to investment. Yet he also spoke directly to the millions of voters, fearful for their jobs, who hear the complaints of energy-intensive manufacturing firms – the very companies that are supposed to be the engine of the recovery – and worry that this might be just what is happening. It may merely have been a piece of casual conference politics. But the Treasury has a long record of undermining green policies.
Industry lobbying currently has a very specific focus: the carbon price support scheme, introduced in the last budget. It is intended to put a floor under the price of carbon to maintain the incentive to find alternative sources of energy. It is also a nice little earner for the Treasury. No surprises that it is one of their wholly owned policies. Unfortunately it is badly constructed, which stokes fears of exactly the sort the chancellor played on. On top of that, by keeping up the price of carbon, it could drive up the retail price of electricity – something which may be unavoidable, but which is bound to be controversial when every 1% on fuel bills pushes another 60,000 households into fuel poverty. All more so since – while Chris Huhne and Vince Cable are working together to find a support package to ease the cost for industry – consumers have to rely on a cash-limited scheme operated by the suppliers for relief.
Meanwhile carbon capture technology, a project in which Britain was to have been a world leader, is proving ever more elusive, and the £1bn competition announced by the last government with such fanfare has only one entrant whose negotiations with the energy department appear to be parked. It may have been a duff idea. Yet the energy industry, according to an Ernst & Young report, has bucked all recent trends and created 45,000 jobs in the past two years. Maybe big science is not the right answer, or at least not right now. The smart money should be in battery development, backing British science, incentivising greener car manufacturers (Land Rover is already at it) and fighting to lead the consumer end of the energy-saving industry. Think Steve Jobs. Think innovation.
Source: http://www.guardian.co.uk/commentisfree/2011/oct/13/climate-change-green-cars-energy
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