Energy Bill Secures Bright Energy Future

In a year when ‘omnishambles’ took all the laurels for new political vocabulary my personal favourite is the ‘energy trilemma’.  How does a government in a country of fully privatised energy sector keep the lights on, keep energy affordable and reduce carbon emissions.  During a successful and popular period at DECC,  Ed Miliband was keenly aware of the trilemma.  Yet he treated it like decorating the spare room – a lot time selecting paints and furniture, but always finding an excuse to avoid putting on the overalls and getting the job done.  This left energy it as one of the key priority issues for the new government to deal with and with the Lib Dems running DECC, it is one of the key tests of the junior coalition partner’s effectiveness in government. After 30 months and through two secretaries of state we have (most of) the solution in the form of the Energy Bill.   I, for one, think it’s a great step forward.

The main controversy over the bill has been the lack of a carbon target for the power sector to 2030.  There are loud voices decrying this omission, and those like me that want to see the UK leading the way on legislation that will help prevent climate change would have certainly preferred to see a tough target in there.

But we need to consider how meaningful is this concession really is?  One of the triumphs of the Milliband period at DECC was the passage of the Climate Change Act which commits the UK to reducing emissions by 80% by 2050 and by 34% by 2030 – based on 1990 baselines.  The means by which the government is to achieve that target is through 5 year carbon budgets.  In May 2011 a ferocious battle was fought over the fourth carbon budget from 2023-27, but the outcome was the government adopting the budget and thereby committing the UK to 50% reductions in net emissions by 2027.  The government now needs to decide whether to follow the recommendation of the committee on climate change to include aviation and shipping in that calculation.  In the context of further consultation on Heathrow expansion, that decision could be equally controversial.

These legally binding commitments provide an overriding context for not only the Energy Bill, but all government policy.  The only way around the Climate Change Act would be repeal, a retrograde step that seems about as likely as a return to the front benches for Nigel Lawson.

It is right to keep the government’s feet to the fire over carbon targets for the power sector.  We want the UK to decarbonise and clean-up its generation rather than relying on offsetting or offshoring emissions in other sectors.  However we should not make the best the enemy of the good.  The Energy Bill represents important and timely progress in solving the energy trilemma and the failure to include the carbon targets does nothing to dilute the overarching commitments that the government has made to reduce carbon emissions dramatically to 2027.  Crucially the Energy Bill has been welcomed by those that will make the investments and create the jobs that will help take the UK to a brighter future.  With their commitment and this improved regulatory programme we can now get on with building it.

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