This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/commentisfree/2012/nov/25/energy-policy-power-politics

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Energy policy: power politics Energy policy: power politics
(3 days later)
The politics of energy could come to define the relationship between the two coalition parties. The Conservative chancellor was desperate to hold down industry costs, to ease pressure on household budgets and also to stand against regulations which many Tories regard as green tape. He slugged it out with the Lib Dem energy secretary, Ed Davey, who shared Tory concerns on costs but also wanted real progress on decarbonising energy supply. In the end the chancellor had the stronger arm.The politics of energy could come to define the relationship between the two coalition parties. The Conservative chancellor was desperate to hold down industry costs, to ease pressure on household budgets and also to stand against regulations which many Tories regard as green tape. He slugged it out with the Lib Dem energy secretary, Ed Davey, who shared Tory concerns on costs but also wanted real progress on decarbonising energy supply. In the end the chancellor had the stronger arm.
So the immediate costs of electricity are broadly contained but the long-term costs may be high. Britain's prospects in the fast-growing clean energy sector are weakened, and so too are our chances of meeting our carbon targets. The bill could eventually be paid in extreme weather events of the sort that ravaged Britain on Sunday. The legislation Mr Davey will publish later this week is probably as good as he was going to get, but it is not very good.So the immediate costs of electricity are broadly contained but the long-term costs may be high. Britain's prospects in the fast-growing clean energy sector are weakened, and so too are our chances of meeting our carbon targets. The bill could eventually be paid in extreme weather events of the sort that ravaged Britain on Sunday. The legislation Mr Davey will publish later this week is probably as good as he was going to get, but it is not very good.
Here is the upside: by 2020, more than £7.5bn will be available to invest in non-carbon generation. Households will pay more, but only about 10% of their bills will be attributable to the greening of energy supply. The lights, probably, won't go out. And here is the downside: there is no 2030 commitment to decarbonise supply. That target, which will now be revisited in 2016, was a critical waymark on the road to the demanding 80% reduction in greenhouse gases that is promised by 2050. The Lib Dems insist they still hold to the 2030 commitment, and Ed Miliband has reiterated Labour's determination to stick to it. But as of now, business has no reassurance about the security of long-term returns on investments made today. The UK has already lost out in the manufacture of onshore turbines; now offshore turbine production is jeopardised too.Here is the upside: by 2020, more than £7.5bn will be available to invest in non-carbon generation. Households will pay more, but only about 10% of their bills will be attributable to the greening of energy supply. The lights, probably, won't go out. And here is the downside: there is no 2030 commitment to decarbonise supply. That target, which will now be revisited in 2016, was a critical waymark on the road to the demanding 80% reduction in greenhouse gases that is promised by 2050. The Lib Dems insist they still hold to the 2030 commitment, and Ed Miliband has reiterated Labour's determination to stick to it. But as of now, business has no reassurance about the security of long-term returns on investments made today. The UK has already lost out in the manufacture of onshore turbines; now offshore turbine production is jeopardised too.
Meanwhile, certain non-renewables get a boost. New gas-fired power stations with a 40-year lifespan are guaranteed: Mr Osborne is staking our energy future on the belief that global gas prices will fall and costs will be cushioned by gas fracked from beneath Blackpool rock. And then there's the return to nuclear, which will gobble up an uncertain share of the green investment subsidy.Meanwhile, certain non-renewables get a boost. New gas-fired power stations with a 40-year lifespan are guaranteed: Mr Osborne is staking our energy future on the belief that global gas prices will fall and costs will be cushioned by gas fracked from beneath Blackpool rock. And then there's the return to nuclear, which will gobble up an uncertain share of the green investment subsidy.
What's not in the energy bill is much for the fuel-poor, even though they are suffering most from rising bills. And there is no new commitment to the most effective green energy policy of all: cutting energy consumption. The UK is projecting a two-thirds rise in energy demand even while Germany, Europe's manufacturing heartland, is projecting a decline of a quarter. What's not in the energy bill is much for the fuel-poor, even though they are suffering most from rising bills. And there is no new commitment to the most effective green energy policy of all: cutting energy consumption. The UK is projecting a two-thirds rise in electricity demand even while Germany, Europe's manufacturing heartland, is projecting a decline of a quarter.
There are few easy choices when costs are immediate and the benefit so distant, and especially during a slump. But all sense of the strategic decisions required has been lost in the tactical horse trading. These are bad decisions made in a bad way, and they will cost the country dear.There are few easy choices when costs are immediate and the benefit so distant, and especially during a slump. But all sense of the strategic decisions required has been lost in the tactical horse trading. These are bad decisions made in a bad way, and they will cost the country dear.
• This article was amended on 28 November 2012. The original said the UK was projecting a two-thirds rise in energy demand while Germany was projecting a decline of a quarter. These figures relate to projected demand for electricity in 2050, compared with 2008, not to overall energy demand.