Westminster’s efforts to champion green forms of energy are in danger of being “botched”, a committee of MPs has warned.
The House of Commons Energy and Climate Change Committee today (Monday) published a report claiming the UK Government’s draft Energy Bill could see consumers subjected to unnecessary costs, lead to less competition, and put off investors.
Committee chairman, Tory MP Tim Yeo, said: “The Government is in danger of botching its plans to boost clean energy, because the Treasury is refusing to back new contracts to deliver investment in nuclear, wind, wave and carbon capture and storage.”
Under the Bill, long-term contracts would be introduced giving energy firms a guaranteed price for electricity coming from low carbon sources, the aim being to reduce perceived higher-risk investment in the likes of offshore wind farms, which attract larger upfront costs.
However, the liability is not being met by the government and would instead be spread across energy companies.
During evidence, the committee heard that a spending cap set by the Treasury, limiting the amount firms can add onto bill, would create an “unacceptable” level of risk to companies seeking to invest in renewable technology.
Yeo added: “Electricity market reform is essential, but the new contracts proposed by the Government will not work for the benefit of consumers in their present form.
“Nobody wants to see a blank cheque written out for green energy, but the Government must provide investors with more certainty about exactly how much money will be available.”
A growing stand-off between Chancellor George Osborne and Liberal Democrat Energy Secretary Ed Davey has emerged in recent months over renewables policy.
Despite Prime Minister David Cameron’s much-quoted vow that his government would be the “greenest ever”, the Treasury has been viewed as going against this.
An announcement due to be delivered by Davey last week on renewable subsidies was cancelled, while Osborne’s stance, on the other hand, has been backed up by more than 100 MPs who have signed a letter calling for cuts in subsidies to promote “inefficient and intermittent energy”.
WWF Scotland senior climate change policy officer Sam Gardner said: “This damning report makes it very clear that the current UK’s proposals are unworkable and will hinder Scotland’s progress to achieving our low carbon future.
“Rigging the UK energy system in favour of nuclear and gas instead of clean renewables and energy efficiency is not what the country needs or wants. “Opinion polls show that the public supports increased use of renewables and better energy saving, not more good money thrown after bad on nuclear power and fossil fuels.”
Neil Evans
Neil is Holyrood's Environment Correspondent, joining in 2012 after working for newspapers in Corby, Portsmouth and Aberdeen. He was born in Reading but has lived in Scotland since 2007. His first attempt at "being green" was coming up with the idea of an edible crisp packet while at primary school. It didn't catch...