Uncertainty over the government’s position on our energy future is costing us. One senior Conservative figure, deeply frustrated by the situation, confided that interest rates on energy projects have increased by 15 per cent over the last few weeks, entirely because of Westminster’s energyshambles. That kind of financing leap adds up – and features later on our bills.
Changing our infrastructure is hard. It means changing things not just for those who provide it, but for the people who use it. It is a big challenge that costs and can confuse. Look at what happened recently in broadcasting – we moved from an analogue format to a digital one. A relatively minor shift in the mode of transmission, but what an effort it took.
It wasn’t just about changing our televisions. It meant changing everything from the cables in the ground to the satellites in space. Because of this, it meant changing things not just in the UK, but around the world. But it worked. How?
First, a global agreement was reached as to when the switchover should happen. Six years ago, a deadline of 17 June 2015 was registered with the United Nations.
Each nation then agreed its domestic target for achieving the switchover – Netherlands was first in 2006, while the UK finished a few weeks ago on 24 October 2012.
The government spent a considerable amount of money helping people with this change, overseen by an independent body of experts in the form of Digital UK. But such was the rigour and certainty with which the government went about the process (empowered by cross-party support) that it ended up costing less than expected.
You would think that a demonstrable improvement shouldn’t need government interference: the market should take care of itself. But manufacturers need coordinated targets to tell them when a product becomes redundant and new ones are needed. Retailers need to know what they should be stocking when. During the digital switchover, a clear line of direction helped the public and business to bring about a complex change together on time and under budget.
This was a huge programme of change – from making sure a regional care home had a functional communal telly, to sending new satellites into space. And this was all done not for anything as dramatic as saving the planet - just to offer a better product.
So why is it so much more difficult for something much more important like the switch to low carbon energy? Why the newspaper headlines? Why the controversy? Why the mess?
Much of the structure is already in place. We have, as we did with the digital switchover, a nonbinding UN agreement on decarbonisation. It’s not enough, of course, but as China reduces its emissions by 15 per cent in five years, we can’t pretend not to be part of a global process.
We have a firm domestic target – an 80 per cent reduction in emissions by 2050 as set out in the Climate Change Act.
We have the independent experts to achieve that goal in the form of the Committee on Climate Change.
Everything should be in place to achieve the change we need, so why does it feel like something’s going wrong? It’s the politics.
We had a target, but the politicians argued about how to meet it. We had advisers, but the politicians argued about what they advised.
As no one knows what the direction of travel is, the costs are going up. They go up as government whips secretly support rival parties. They go up as one department calls for a gas-led future and another says it will have a limited role. When one minister says an energy technology is done, and his boss says he is wrong. This is all despite huge public support for renewables – in fact, a recent analysis showed Conservative voters want more wind, not less.
That is why business is so cross. That is why everyone from Siemens to Alstom to Virgin to Marks and Spencers to National Grid to Microsoft to Edf to Unilever and many, many more have said we need more certainty. As Mike Barry of M&S recently said: “the certainty of the Climate Change Act has been replaced.”
At the moment, under the Climate Change Act, we only have a target for greenhouse gas emissions across the economy– everything from agriculture to refrigeration. These are all pillars, holding up the structure of our decarbonisation plan. In an ideal world we wouldn’t need a target for any one particular pillar, but a crucial one is currently looking very wobbly indeed – our electricity generation. If we don’t succeed in decarbonising electricity, everything else will have to meet much higher targets, making everything much more expensive.
As with digital switchover, as with the rail revolution, as with decimalisation, our country has prepared itself for a big change to the status quo. We should be busy achieving the change. We shouldn’t need extra frameworks – but our politicians have let us down. We now need our politicians to show they are capable of giving businesses the structure they need to deliver without them, by listening to what those companies have told them and putting in place a clear figure on how much carbon can be in our electricity mix by 2030.