A Curate's Egg

Hmmm.

Could have been better - could have been worse.

Mr Osborne's announcements, of course.

The three big things everyone has been worried about are still there, but there's something rather mealy-mouthed about it all:
RHI - no indication of how the £860M will be allocated so nothing to get excited about yet. And that's somewhat less than the numbers trailed in February.
FITs - watch his space! What does HMG consider to be the most cost effective technologies?
Green Investment Bank - OK £1Bn is £1Bn but how much is that going to contribute in the long run?

Hopefully piloting CCS will crack on - it's needed.

DECC put a brave face upon it in their press statement but I bet there are some civil servants there who are smarting somewhat given the slashing of their administration budget.

Centrica Vision

I've been catching up on some archived reading (a never ending task!) and have just looked at Sam Laidlaw's speech to the RSA in September on transforming the energy sector. What leapt out at me was "We need to encourage low carbon capacity not just the lowest short run marginal cost. This means a strong price on carbon, so the polluter pays......the market will need to be reconstructed to reward all forms of low carbon generation." This really chimes with my previous post.

Of course there was a lot of puff about Centrica's role in any transformation and how they are already ahead of the curve etc etc but there were some good pointers to where we must be. Market restructuring, as mentioned above, is fundamental. Only by doing that will we properly incentivise grid decarbonisation - to include renewables, nuclear and CCS (I know some of my erstwhile colleagues will hate my mention of the 'n' word - but I'm convinced it has to be part of the mix). And of course energy efficiency has a huge role to play. Here again, the market requires transformation - will the Green Deal be up to it?

What I also found encouraging (I think) was some up-front acknowledgement that the consumer has to be convinced, that attitudes have to change, and that power companies have a major role to play in doing that - enabling people to manage their energy use - and part of that will be spelling out that the technological fixes noted above have a cost and the only way Joe Public has of minimising that cost is by not being profligate in his energy use.

Greenest Government?

We've all heard about the Government's wish to be the greenest ever but do we have the economic structures to actually achieve something meaningful? If green technologies are to take off - and let's concentrate on green energy for the moment - then either they have to compete within the current economic framework or that framework has to change. The latter seems like a step too far so how can the former work? The obvious answer is that externalities should be priced in to energy production technologies - in particular, the cost of CO2. We do have a carbon market of sorts but I'd argue that it's not yet coherent. Why? Possibly it is because it has to be a global market - CO2 distributes right across the planet - but we have a major player refusing to take part (i.e. the US not supporting Kyoto and not looking likely to change its stripes in the near term). This is depressing because until such time as we do have externalities properly priced in we will continue to over-consume fossil fuels, damaging the environment, until they become sufficiently scarce for the "traditional" economic signals to kick in. Potentially that will be too late.

What could happen, of course, is that emerging nations - China, India, Brazil, become the new engines of growth fuelled by clean new technologies and leave the US and Europe behind in the old ecomonics. Can they survive on their current major export - financial services? Having just seen those industries mess up big time one has to be doubtful.

Expanding out from the narrow confines of CO2, we need to think about all those "commodities" that we should regard as scarce. We need now to create markets in biodiversity, watersheds, forests that are designed to limit the consumption of these resources. This is a huge transformation in thinking. Do we have the time?

Letter to MP

Sent today:

Dear Ms Milton
I have been reading, with increasing concern, speculation that a number of climate change initiatives may be watered down or scrapped altogether. In particular, there have been suggestions that the Renewable Heat Incentive will never be launched; that the Feed-In Tariff  payments could be reduced well ahead of the previously published review date; and that capitalisation of the Green Investment Bank could be in jeopardy. Any one of these actions could spell severe problems for nascent UK green technology industries.
The FITs programme, as recent solar PV uptake statistics have shown, has proved to be a success story in stimulating interest in renewable power generation. To inject uncertainty into the industry at this stage would be a case of snatching defeat from the jaws of victory. Similarly, with the closure of the Low Carbon Building Programme, there is a desperate need to keep the solar hot water sector alive. RHI could do this and signaling now that the government will retain this initiative will do much to retain confidence in the industry. Finally, for the longer term, a vibrant GIB is essential for the promotion of green industries and green jobs in the UK.
The government has claimed that it will be the "greenest ever". The initiatives noted above are key building blocks to achieving that ambition and I urge you to ensure that the Treasury protects them in the current spending review.
I look forward to reading your reply,

Bonfire of the Quangos

Tomorrow is supposed to be announcement day for a number of non-governmental bodies - possibly including my old haunt the EST. There's been much talk of the domestic advice remit going elsewhere - thereby really cutting into the Trust's core business. Already the funding from DECC has been severely cut back (and decision-making from that estwhile body while I was still at the Trust was painfully slow, thus making the management of a meaninful service really difficult). There has been chatter about an EST/CT/Ofgem threesome - something of a dog's breakfast I think - but it could still be on the cards. It rather depends upon how HMG wants to play things. With both EST and CT being essentially independent bodies one likely scenario is simply that funding is cut massively (even completely - think of the Sustainable Development Commission). Some insiders suggest that EST will have one more year to pave the way for the Green Deal - and that will be at a much reduced cash settlement such that the contribution from the Scottish Government next year could exceed that of DECC. What price a move of HQ to Edinburgh?

Indian Summer

Another glorious day! Our solar panels had delivered a tank full of hot water by noon - a few more pence toards break-even.

Shadow Cabinet Take 2

Well - the decision was made more quickly than anticipated. The shadow chancellor post was a nice bit of ducking and diving considering the Balls/Cooper issue.

Caroline Flint is back shadowing CLG - I stand by my earlier comments.

As for Meg Hillier shadowing Energy and Climate Change and Mary Creagh doing Environment Food and Rural Affairs, neither exactly has a track record so there's quite a learning curve to be climbed. Watch this space!

Looks as though Hilary Benn is being put out to grass.