Only 10 weeks into the new Conservative Government and already the credibility of its green policies are being called into question. Amber Rudd, head of the Department of Energy and Climate Change (DECC), said yesterday of DECCโs 2015 priorities: โCarbon reduction targets are more essential than renewable energyย targets.โ
Rudd explained during the Energy and Climate Change Committeeโs inquiry into the Departmentโs objectives for this parliament that decarbonisation is the โmost important approachโ โ within this, both renewable energy and low-carbon energy will play a role, sheย said.
Rudd stressed that shale gas in particular will be an โimportant part of the energy mixโฆ Itโs an important part of our decarbonisation targets because itโs a low-carbon source of energy.โ Meanwhile the governmentโs commitment to renewable energy remainsย unclear.
Renewableย Future
The majority of the inquiry was spent questioning the future for renewable energy in the UK in light of the recent cuts to onshore wind subsidies and rumours of additional cuts to solar powerย subsidies.
Committee members repeatedly stressed the mounting concern and uncertainty surrounding renewable energyโs role in decarbonisation under thisย government.
. @AmberRuddhr: Shale gas is โeffectively a low-carbon sourceโ of energy. I think some might wish to challengeย thatโฆ
โ Leo Hickman (@LeoHickman) July 21, 2015
#ECC @AmberRuddhr shale gas โis low carbon sourceโ – this is nonsense! Most of world’s gas is unburnable for climateย goals.
โ Simon Bullock (@simonbullock) July 21, 2015
Bizarre. Energy SoS @AmberRuddhr tells @CommonsECC that shale gas is a low-carbon source of energy. Only compared withย coal!
โ Bob Ward (@ret_ward) July 21, 2015
Rudd dodged questions about which alternative sources of renewable energy would replace the future capacity that would have been supplied by onshore wind. Instead, she advised developers to look at potential opportunities that donโt involveย subsidies.
When asked what plans are in place in case renewables arenโt able to stand on their own feet without subsidies prior to 2020, she replied: โWe have to have confidence in the strategy and that renewables will deploy in a way that theyโll become less and lessย costly.โ
The governmentโs commitment to cut carbon emissions provides the long-term signal to the renewable industry, Ruddย added.
Long-Termย Signals
Rudd asserted that while subsidies are important, they shouldnโt be the long-term answer to the low-carbon economy: โSubsidies are a way to get the low-carbon economy going and then the government [must] stepย back.โ
It is now unclear what money remains available up to 2020 for the Levy Control Framework (LCF) โ the LCF aims to provide certainty to investors while limiting financial impact on those who will ultimately foot the bill for new renewable and low-carbon electricityย schemes.
Fears that the LCF spending cap for green power subsidies will be breached have been circulating for a while, but last week they ramped up further as the Office for Budget Responsibility released itsย officialย forecast.
In 2012, the coalition set a cap of ยฃ7.6bn for 2020/21. Forecasts now predict that spending will reach ยฃ9.1bn by this time: some 20 percent over the original LCFย cap.
โI am acutely aware of the need to give some certainty post-2021,โ Rudd said, noting that she is in discussions about a futureย framework.
In addition, Rudd admitted she does not anticipate that onshore wind will be allowed to access Contracts for Difference this year โ the market support mechanism designed to encourage the deployment of low-carbon generation at the lowest cost.ย ย
This is pretty damn major. No CfD round for large renewables projects this yr. Is there much govt green policy left? https://t.co/m31Pjsma2r
โ Simon Inglethorpe (@s_inglethorpe) July 21, 2015
Carbonย Targets
Renewable energy was not the only thing shrouded in uncertainty. Carbon reductions targets were also raised during the Select Committee meetingย yesterday.
DECC permanent secretary, Stephen Lovegrove, admitted that โthere is a bit of a shortfallโ in the fourth carbon budget for the 2020s. Under the Climate Change Actโs fourth carbon budget (2023โ2027), the UK Government must reduce its emissions by 50 percent by 2025 from a 1990 baseline. Rudd promised to come back with policies to address thisย shortfall.
Rudd also avoided questions about renewing carbon reduction policies once they expire post-2020, arguing that the carbon budgets are an effective tool for long term planning. She added that due to continual changes in new technology, โwe donโt know yet what the answer will be for theย 2030s.โ
โWe will continue to support new technology and innovationโฆ in order to find out where else we can expand the opportunity to improve our carbonย reductions.โ
Photo: Parliament TV Screenย Grab
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