When the Department of Energy and Climate Change published its ‘Commitment to Renewables’ last month, it did so in the wake of David Cameron and Chris Huhne’s summit with the ‘big six’ energy suppliers, organised in an attempt to reverse the trend of ever-increasing energy costs. The massive cuts in subsidies ushered in by the deceptively titled policy – particularly the much-publicised slashing of feed-in tariffs – are intended to play their own part in reducing energy bills, by cutting the small surcharge that is added to our bills to pay for them. The reduction of such ‘green taxes’ however, despite what those in certain sections of the media may claim, will make barely any difference. The reality is that Renewable Obligation support payments, as they are known, add only £20 per year to the average annual bill, and by 2016 the proposed cuts will save only £2 per household. By contrast, the recent price rises by the big six – who supply 99% of all consumers - have added an average of £134, reflecting the rising cost of whole-sale gas prices.
The truth, if we all dare to admit it, is that fossil-fuel based energy costs are going in only one direction, and no amount of corporate arm twisting is going to change that. If the government wants to take truly progressive action then it is clear that we need not just short-term sticking-platers, but a long-term vision, and a well-defined road map for how we are going to get there.
By the middle of this century the vast majority of our energy demand is going to need to come from low-carbon, and largely renewable sources. This of course requires a careful assessment and balancing of the multiple options, including nuclear and carbon-capture-and-storage, as well as a long-term consideration of the necessary levels of subsidies to achieve the significant investment that will be required.
It would be deeply naïve however to imagine that investment in renewables is all we need. The development of a renewable energy infrastructure in the UK is not going to happen overnight, and in the short and medium-term we are still faced with the the spectre of rapidly rising fuel costs.
For now the obvious, and hypothetically easy answer, is to use less fuel. For many this is a tragic necessity, as the increasing numbers of households in fuel poverty makes clear, but it is also a reality that all of us at some point are going to have to face up to. The fact of this long-term inevitability must surely demand greater action on the challenge of energy efficiency.
The economic argument for this is fairly clear cut – it is far cheaper to save a watt of energy than produce one. It is far more effective therefore to invest in upgrading the energy efficiency of our building stock, than in a large-scale installation of solar panels across the country. As I have written before, such renewable technologies, where installed on inefficient buildings, will simply offset the energy losses that can be saved more economically though other means. Where buildings already meet a minimum standard of efficiency then solar and other renewables should of course be encouraged, but for the rest, there should be greater priorities.
In this light we can only welcome the official launch of the ‘Green Deal’ consultation document last week (the summary can be found here), which proposes a £14 billion private-sector investment over the next decade. Only those properties were the savings would be greater than or equal to the total cost of the work will be eligible, and with repayments being added to customers’ bills, the deal ensures that the cost is paid by those that ultimately benefit – the debt is attached to the property, and is the liability of the bill payer, rather than any one person.
There are of course concerns: a need to ensure consumer acceptance and take up of the scheme is one, a point that Which? magazine has already raised doubts over due to estimated savings being based on averages rather than individual assessment. Convincing industry of the Government’s long-term commitment to the policy is another, and based on the massive u-turn over renewables, particularly on solar power, such long-term certainty over the coalition’s environmental policy commitments may be hard to come by. With the announcement of further details about the Green Investment Bank however, with Green Deal financing identified as one of five priority sectors, there can at least be confidence of some Government support through to 2016 at the very least.
The slashing of renewable subsidies was both cynical and short-sighted, a clear failure of the Government’s obligation to encourage a weaning-off of fossil fuels and the development of a more sustainable energy infrastructure. The Green Deal does not make up for this, but for what it is setting out to do it should be supported. We can only hope that this time the commitment is genuine, and that industry succeeds in making it reality.
© Thomas Stoney Bryans 2011