Power struggles

Observations on energy

Jamie Oliver's got one. David Cameron's getting one. And Manchester City FC has planning permission for one 85m tall, hilariously dubbed "football's biggest fan".

Using a wind turbine to power your property has in the past year moved from being a mark of eccentricity to being the status symbol for the environmentally aware. But if turbines and other "microgeneration" power sources are going to help the government meet its ambitions to achieve a 60 per cent cut in CO2 emissions by 2050, a lot more people are going to need to own them.

The government knows this. Since last April, the Department of Trade and Industry's Low Carbon Buildings Programme has been handing out grants to ordinary punters to help them afford the £1,498 price tag for a turbine (the going rate at B&Q). The scheme has been wildly successful, with half the £6.5m available snapped up in the programme's first six months. So you'd expect the green lobby to be slapping Tony Blair on the back, rather than in the face.

But they are not. The Renewable Energy Association (REA) says the programme has degenerated into a "farce". In a report published on 30 January, the trade and industry select committee noted a warning from the Energy Saving Trust of a "serious risk of shortfall" between supply and demand, while the Sussex Energy Group predicted "a danger of serious disappointment among consumers" if funds ran dry before the scheme ended.

According to energy groups, the government is shooting itself in the foot. It wants to bring down the price of wind turbines by nurturing a proper industry for micro-renewables (including solar power and ground-source heat pumps, as well as wind turbines). But it doesn't want to pay for it. At the end of last year the government did double the size of the fund to £12.7m, but only by reallocating existing money. As it did so, however, the DTI imposed a cap of £500,000 on how much could be doled out each month.

The effect was all too predictable. January's allocation dried up in 12 days. This month's grant disappeared in less than 12 hours. Greens logging on to the DTI site after midday on 1 February were told to come back next month: the money had gone. This penny-pinching threatens the future of the scheme. If the cap continues, fewer consumers will be able to buy turbines, prices will stay high, and a properly functioning market will take longer to develop. Clearly, the fund needs to get bigger.

No can do, says the government: the £12.7m is all there is to play with, and the cap has been imposed to ensure the grant will last until June 2008. By this time, the small businesses growing up to meet the expected demand might either have left the sector or have gone bust. "It's a disaster for microgeneration," says Matt Hogan, director of one such firm, Revolution Power.

Against this, all the DTI can offer is that it hopes by the time the money runs out "the household sector may have matured to a point where government subsidy is no longer needed".

Graham Meeks, head of fuels and heat at the REA, smells a rat. The DTI, he believes, is less interested in reducing carbon emissions and more interested in stretching what money it has as thinly as possible.

"What the government is trying to do is simply eke out the money so the minister can stand up in the House and say, 'We have a grant programme in place, it has spent this amount of money and it will last until so and so'," says Meeks. "They're just papering over the cracks for cosmetic and political purposes."

"It's daft," says Meeks. "You get David Miliband running around winding up the population to do their bit, and getting an unprecedented level of interest in climate change - but the government is simply failing to do its bit in matching that customer demand. If it's serious it should commit more support to it."

Gordon Brown should take note. Climate change is going to cost consumers, and it makes little sense to annoy them while they're keen to help. There's an ideal chance at this summer's Comprehensive Spending Review to divert money from half-baked initiatives such as the Respect agenda into something that will make a tangible difference to what is perhaps the greatest issue of our time.

So: your move, Gordon. And, while you're thinking about it, you'd best get down to B&Q . . .