WHAT will become of UK energy policy now the Conservative Party holds all the levers?
The Government has already given clear indications of its plans to pare back onshore wind. Yesterday was the turn of offshore wind, when new UK Energy Secretary Amber Rudd announced progressive subsidy reductions.
With the Government apparently committed to nuclear and shale gas and oil, renewables companies are wondering if they still have a place at the table.
The Government’s first big energy decision was confirmed with the announcement that the renewables-obligation subsidy scheme would be closing next April 1, a year earlier than planned.
Confidence in the renewables industry has been wrecked as a result, though it goes further than that: the companies supporting renewables are the big power companies. The move is arguably as much a move against them as anyone.
According to industry body Scottish Renewables, the decision will cost Scotland alone up to £3 billion in investment and risk many thousands of highly paid jobs.
The move will also hit consumer utility bills.
Keith Anderson, chief operating officer of Scottish Power, has estimated it will cost consumers between £2 to £3 billion in more expensive electricity generation.
Even before the election, offshore wind was not a good place to be. If the subsidies are now cut, it will be a dead duck.
The Tories have long backed new nuclear power as the panacea to combat the looming electricity crunch that is often talked about in energy circles. Yet new nuclear is proving so challenging across the world that delivering even one new station will be no easy task. David Cameron has also made clear the government’s commitment to shale gas and its desire to repeat the US revolution here.
Yet benefits must be balanced against the need to protect land and water supplies and manage hostile public opinion.
The Government’s emerging approach to wind looks very unwise. New nuclear looks a very costly and unreliable drain on the Government’s budget, while fracking looks expensive, incompatible with emissions targets and probably uneconomic at current oil prices.
If the Government gets it wrong, the consumer could be saddled with soaring electricity and gas bills for years to come.
If ever we needed some sign of reprieve for UK renewables, it is now.
This piece originally appeared on theconversation.com
Peter Strachan and Alex Russell are professors working in the department of management at Robert Gordon's University
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