Sugar backs green energy

But wind farms are where the jobs are.

Lord Sugar has today called on the government to set a target for the decarbonisation of Britain’s electricity sector by 2030 in a bid to clean up one of the country’s largest sources of carbon emissions and remove uncertainty for companies and investors in the sector.

Already a hotly debated topic in parliament, the coalition government has been rife with in-fighting since the end of last year, after Chancellor George Osbourne firmly rebuffed a suggestion from the Committee on Climate Change, championed by Liberal Democrat energy secretary Ed Davey, to set a target to cut the power sector’s carbon emissions from 500g of CO2 per kilowatt hour to 50g CO2/kWh by 2030.

Osbourne’s claim that such a bill would damage investment in Britain’s healthy oil and gas sector was rejected by Tim Yeo, the Tory energy committee chairman, who said at the time:

“If the carbon cuts do not come from the electricity sector then deeper cuts will need to be made elsewhere, and if the reductions are not made in the 2020s then they could become even more expensive,” and has since suggested an amendment to the energy bill which would force coal and gas-fired power plants around the country to close over the next 18 years, unless fitted with carbon capture and sequestration equipment.

Lord Sugar has now added his weight to the argument, claiming Britain risks falling behind in renewable energy investment and the economy could benefit hugely from spending on green energy. “This country needs jobs, and the renewable industry could help unlock our crippled manufacturing sector,” he said.

While it’s true Britain has undoubtedly benefitted from this kind of investment, most notably in wind energy, the extent to which it has aided our ailing manufacturing sector is perhaps being overstated. Siemens, Vestas, GE et al., the industry leaders in wind turbine manufacturing, all produce their wares overseas, which would do little to aid job creation and boost manufacturing in this country.

Where the difference could really be felt though is in the installation and operation of wind farms, of which there is currently a healthly pipeline of work approved to take place over the next decade.  Already a world leader in offshore wind power, the UK currently boasts 3,321MW of electricity generation capacity from 20 offshore wind farms, with a further 31GW worth of projects already leased to developers. The industry currently employs around 4,000 people, but with construction on numerous new projects due to start from 2014 onwards, this figure could swell substantially.

Despite the obvious benefits for the job market, without the government’s support for renewable energy, most types of green energy, particularly offshore wind, simply cannot compete with conventional energy sources on a cost/kWh basis. Offshore wind currently stands at around 15.0-16.9pence/kWh to generate, whereas the cost of gas-fired power generation is considerably lower at around 8.0pence/kWh.

It’s true that the cost of offshore wind will come down over time, but without a firm target for carbon reduction enshrined in law, plus a mountain of other economic problems facing the government, it’s difficult to see how this momentum can be maintained.

The problem is exacerbated by the current competitiveness of coal prices on the international market, thanks in large part to demand falling in the US as it has turned to shale gas. This has caused the UK’s share of electricity generated by coal to reach 40 per cent, the highest since 1996, with emissions rising by 3.9 per cent in the last year alone. The Environment Agency’s Lord Smith has called Britain “the dirty man of Europe” and insisted the government must act to curb its rising emissions from coal, or risk threatening its attempts to tackle climate change. “We’re in a dash for coal that’s completely unsustainable (and) the government must ensure it doesn’t continue,” he said.

It’s not only coal that is giving cause for concern, with UK firm IGas today announcing that as much as 170 trillion cubic feet of gas could be recoverable from fracking in northern England. IGas chief executive Andrew Austin said; “The licences (we own) have a very significant shale gas resource with the potential to transform the company and materially benefit the communities in which we operate…Our estimates for our area alone could mean that the UK would not have to import gas for a period of 10 to 15 years".

Shale gas is extracted from bed rock by the injection of high pressure water and sand, which critics argue can cause dangerous seismic activity. Already having revolutionised the energy market in the US, the controversial fracking technique could yet do the same in the British energy sector.

With such attractive conventional sources of energy available for investment, the government has a difficult task in balancing the economic benefits and the environmental imperative of clean green energy. It is clear on which side of the fence Lord Sugar sits; “As someone who has spent over 45 years developing technology, it is disappointing to see the government has not seized the opportunities offered by this innovative sector… Without a 2030 decarbonisation target, the energy bill will be aimless, leaving businesses and potential investors with prolonged uncertainty and no real commitment from the politicians who were supposed to be the greenest government ever.”

With Tim Yeo’s proposed decarbonisation amendment to the energy bill gaining support from Labour, the SNP and Plaid Cymru, plus a number of Liberal Democrats, despite their official backing of the government’s position, the winds of change may yet force the Torys to follow suit and give investors the confidence to build on the ground work already achieved in the wind sector over the past decade.

Alan Sugar. Photograph: Getty Images

Mark Brierley is a group editor at Global Trade Media

Photo: Getty
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In the race to be France's next president, keep an eye on Arnaud Montebourg

Today's Morning Call. 

Good morning. As far as the Brexit talks are concerned, the least important voters are here in Britain. Whether UK plc gets a decent Brexit deal depends a lot more on who occupies the big jobs across Europe, and how stable they feel in doing so.

The far-right Freedom Party in Austria may have been repudiated at the presidential level but they still retain an interest in the legislative elections (due to be held by 2018). Both Lega Nord and Five Star in Italy will hope to emerge as the governing party at the next Italian election.

Some Conservative MPs are hoping for a clean sweep for the Eurosceptic right, the better to bring the whole EU down, while others believe that the more vulnerable the EU is, the better a deal Britain will get. The reality is that a European Union fearing it is in an advanced state of decay will be less inclined, not more, to give Britain a good deal. The stronger the EU is, the better for Brexit Britain, because the less attractive the exit door looks, the less of an incentive to make an example of the UK among the EU27.

That’s one of the many forces at work in next year’s French presidential election, which yesterday saw the entry of Manuel Valls, the French Prime Minister, into the race to be the Socialist Party’s candidate.

Though his star has fallen somewhat among the general public from the days when his opposition to halal supermarkets as mayor of Evry, and his anti-Roma statements as interior minister made him one of the most popular politicians in France, a Valls candidacy, while unlikely to translate to a finish in the top two for the Socialists could peel votes away from Marine Le Pen, potentially allowing Emanuel Macron to sneak into second place.

But it’s an open question whether he will get that far. The name to remember is Arnaud Montebourg, the former minister who quit Francois Hollande’s government over its right turn in 2014. Although as  Anne-Sylvaine Chassany reports, analysts believe the Socialist party rank-and-file has moved right since Valls finished fifth out of sixth in the last primary, Montebourg’s appeal to the party’s left flank gives him a strong chance.

Does that mean it’s time to pop the champagne on the French right? Monteburg may be able to take some votes from the leftist independent, Jean-Luc Mélenchon, and might do some indirect damage to the French Thatcherite Francois Fillon. His supporters will hope that his leftist economics will peel away supporters of Le Pen, too.

One thing is certain, however: while the chances of a final run-off between Le Pen and Fillon are still high,  Hollande’s resignation means that it is no longer certain that the centre and the left will not make it to that final round.

THE SOUND OF SILENCE

The government began its case at the Supreme Court yesterday, telling justices that the creation of the European Communities Act, which incorporates the European treaties into British law automatically, was designed not to create rights but to expedite the implementation of treaties, created through prerogative power. The government is arguing that Parliament, through silence, has accepted that all areas not defined as within its scope as prerogative powers. David Allen Green gives his verdict over at the FT.

MO’MENTUM, MO’PROBLEMS

The continuing acrimony in Momentum has once again burst out into the open after a fractious meeting to set the organisation’s rules and procedures, Jim Waterson reports over at BuzzFeed.  Jon Lansman, the organisation’s founder, still owns the data and has the ability to shut down the entire group, should he chose to do so, something he is being urged to do by allies. I explain the origins of the crisis here.

STOP ME IF YOU’VE HEARD THIS ONE  BEFORE

Italy’s oldest bank, Monte Paschi, may need a state bailout after its recapitalisation plan was thrown into doubt following Matteo Renzi’s resignation. Italy’s nervous bankers will wait to see if  €1bn of funds from a Qatari investment grouping will be forthcoming now that Renzi has left the scene.

BOOM BOOM

Strong growth in the services sector puts Britain on course to be the highest growing economy in the G7. But Mark Carney has warned that the “lost decade” of wage growth and the unease from the losers from globalisation must be tackled to head off the growing tide of “isolation and detachment”.

THE REPLACEMENTS

David Lidington will stand in for Theresa May, who is abroad, this week at Prime Ministers’ Questions. Emily Thornberry will stand in for Jeremy Corbyn.

QUIT PICKING ON ME!

Boris Johnson has asked Theresa May to get her speechwriters and other ministers to stop making jokes at his expense, Sam Coates reports in the Times. The gags are hurting Britain’s diplomatic standing, the Foreign Secretary argues.

AND NOW FOR SOMETHING COMPLETELY DIFFERENT

It’s beginning to feel a bit like Christmas! And to help you on your way, here’s Anna’s top 10 recommendations for Christmassy soundtracks.

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Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.