Queen’s Speech: Long queue at Green Bank
The Energy Security and Green Economy Bill’s welcome news includes an energy efficiency drive, measures to set up and fund the Green Investment Bank, and reforms to the energy market. But a clamp down on coal-fired power station emissions could well scupper a vital bit of low carbon technology – CCS investment. More on that below.
The Green Bank has a big job ahead to help fund a £750 billion investment programme for new low carbon infrastructure and supply chain support by 2025. That’s £37.5 billion a year, according to E3G. Fortunately, All-Party support for the Green Investment Bank shifts the debate to the form and function of the Bank itself.
The TUC would want to see stakeholder involvement in the Bank, not just at the consultation stage of the Bill, but in membership and advisory roles. Interestingly, the Aldersgate Group argued that the Forum for a Just Transition (a stakeholder body) should have a formal advisory role to the Green Investment Bank.
Both E3G and Aldersgate want to the level of capital increased well beyond the initial £2billion previously suggested – with new Green Bonds, or using revenues from the sale of EU ETS auction permits.
A top priority for the bank will be funding energy efficiency in millions of UK buildings – amounting to more than £100bn in the domestic sector alone . The “Green Deal” for domestic and business energy users signalled in the Queen’s Speech will allow them to take out loans to improve energy efficiency pay these off from the savings that result. On workplace energy efficiency, a further opportunity arises for the TUC to argue for its Greenworkplace projects – workplaces burn energy, consume resources, generate waste and travel – an ideal opportunity to empower working people to tackle climate change.
The TUC is a strong advocate of CCS for both coal and gas power stations, and to capture CO2 from heavy industry. But the proposed Energy Performance Standard limiting CO2 emissions from coal stations (defeated in the last Parliament), will, we fear, drive the dash for gas. Arguably, the same level of CCS must be applied to gas as is applied to coal, not just the same emissions standard. Otherwise, investors will shy away from coal stations and opt for more and more gas, to the point of massive dependency on an imported fuel. Unabated gas built now will do nothing for carbon emissions later.
The best laid plans often go awry. Promised reforms to energy markets will test the political centre of the Coalition, for energy markets will have to be reworked in the national interest if they are to deliver the right level of investment – and higher renewables targets. Ofgem saw this coming in Project Discovery, its energy policy review.