Energy

Bjorn Lomborg’s article on why Germany is cutting back on its support for solar power is well worth reading and has clear implication for this country’s debate about energy policy. As Lomborg argues: ‘there is a fundamental problem with subsidizing inefficient green technology: it is affordable only if it is done in tiny, tokenistic amounts. Using the government’s generous subsidies, Germans installed 7.5 gigawatts of photovoltaic (PV) capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.

Shale, what is it good for? How about fuelling Britain's energy needs for decades to come? The Sunday Times reported yesterday (£) that the reservoir of shale gas discovered in the North West could — depending on how it extracts — supply us with energy for up to 70 years. And we devoted our leader in this week's magazine to the wider potential of this resource. Here is that leader, for CoffeeHousers: Economies of shale, The Spectator, 11 February 2012 The weather conditions of the past week could not have been better conceived to show up the inadequacies of Britain’s — and the rest of Europe’s — energy policy.

Did we need to replace Chris Huhne at all? Nigel Lawson, a former editor of The Spectator (amongst other things), has an intriguing idea in a letter to today’s FT: just break up the Department for Energy and Climate Change. It has done nothing to encourage the development of shale gas, which — as we argue in a leader in tomorrow’s Spectator — could keep Britain in energy for the next 100 years without the need to build another windmill. Lord Lawson, a former energy secretary, says that Ed Davey: ‘...has the opportunity to enter the history books as the only minister to use his position to abolish it for the wider public good.

The economist Dieter Helm is one of the few policy thinkers respected on both sides of the coalition. Oliver Letwin is a long-standing friend of his and Clegg’s office views him as one of the best economic brains in the country. All of which makes Helm’s attack on Chris Huhne’s energy policies in The Times today as interesting as the anti-wind farm letter signed by a 101 Tory MPs. Helm argues that the policy of huge subsidies for renewables is a mistake and that shale gas is a game-changer. Helm writes that, while renewables have a role to play, ‘Coal burning is not going to go away because of wind. Gas is one transition option, a bridge to decarbonisation.

After the Conservative Party Conference, Fraser described this statement in George Osborne’s speech as the Osborne Doctrine: ‘Let’s at the very least resolve that we’re going to cut our carbon emissions no slower but also no faster than our fellow countries in Europe.’ The Government’s current climate policy clearly fails that test, as I set out for this site at the time, and there is no more egregious violation than the carbon floor price. It is one of those policies that can sound reasonable in theory: the EU Emissions Trading System creates a carbon market. That market produces a carbon price that is supposed to encourage business to invest in cutting emissions by doing things like building nuclear plants.

Chris Huhne's article in the Telegraph this morning attacking those who think that shale gas can solve Britain's energy needs is built around a straw man of an argument. Huhne claims that, 'Some therefore argue that we should abandon everything else and devote ourselves wholly to shale.' This is, to put it mildly, a dubious claim. Advocates of shale gas don't want to abandon all other forms of energy, they just want Britain to properly exploit an energy resource which could be as significant for Britain as North Sea oil has been. The Energy Secretary's aversion to shale is even more puzzling when you consider how keen he is for imported gas, coming from some of the most geo-strategically unpredictable places in the world, to emerge as 'the back-up' to renewables.

It's just baffling. The House of Commons committee on energy has today published a report entitled “UK Energy Supply: Security or Independence?” with hardly a mention of the 200 trillion cubic feet of Shale gas recently found outside Blackpool. As Matt Ridley wrote recently in his definitive Spectator piece, these reserves – if exploited – are "enough to keep the entire British economy going for many decades. And it's just the first field to have been drilled." It may well be that just a fifth of this are exploitable, but there is no mention of this potentially game-changing discovery in the committee's report today.

One of the striking things about politics at the moment is that Ed Miliband is proving adept at spotting issues that are going to become big — think the squeezed middle, energy prices — but is failing to drive home this advantage. There’s scant evidence that, for instance, the voters regard Miliband as the solution to the problem of rising energy bills. I suspect that the coalition’s plans to make it easier for people to switch tariff and supplier will cut through with the public more than Miliband’s speeches on the issue. In part, this is the natural advantage of incumbency — governments can actually do things. But the challenge for Miliband’s operation is to make him appear a more effectual figure.

Luciana Berger is a frequent speaker at this year's conference and her creed is simple: tax energy use to tackle climate change. But, journey along the Mersey, from the glamorous fringe events held on Liverpool’s well rejuvenated quays to the post-industrial wasteland that lies beyond and you discover a different breed of Labour MP. ‘Is the green economy a threat to growth?’ asked Ellesmere MP, Andrew Miller at a seminar earlier this afternoon.

Chris Huhne can always be guaranteed to grate. Several Conservatives have cracked wry smiles at the energy secretary’s comments about the “Tory Tea Party tendency”. Mark Pritchard quipped that plenty of senior Lib Dems would soon be at leisure to throw their own tea parties and John Redwood dismissed Huhne’s cant as conference high-jinks. Redwood went on to challenge Huhne’s policies. Speaking to Sky News, he said he was “happy to hear ideas” about “promoting more competition”, pointing out that competition might reduce prices. Then he added that Huhne “has also got to understand it is his policies that are driving costs of electricity up in Britain because we are choosing to generate it in a very expensive way.