From the TUC

Energy Bill needs 2030 carbon target

29 Nov 2012, by in Economics

Today’s Energy Bill, after two years of confusion, provides UK businesses with at least some degree of certainty on the energy policy they are going to be operating in. TUC General Secretary Designate Frances O’Grady said: ‘We are a step closer to having renewable power at the heart of the UK’s energy policy. Businesses and investors will now be more likely to stump up the cash to invest in carbon capture and storage projects as well as wind and wave technologies and new nuclear power, safe in the knowledge that their borrowing costs will be significantly lower.” The TUC welcomes the additional support for the UK’s energy intensive industries, but not the omission of a legally binding energy target for 2030.

UK energy mix 2012

Coal and gas power still dominate our energy mix –  the black and red on our graph.

The Climate Change Committee has already said that it wants to see a decarbonisation target for 2030. So the Energy Secretary’s announcement that there is to be no move on this for another four years is yet more unnecessary delay. With high level ambitions, if businesses and investors knew they had an energy/emissions target to work towards, the Energy Bill could help deliver thousands of good paying jobs and skills for our economic recovery.

Nevertheless, the TUC welcomes:

  • the unexpected announcement to  exempt energy intensive industries from additional costs arising investment in low carbon power plant such as nuclear power stations and wind farms through new ‘contracts for difference’. It’s in addition to the £250m compensation package now out for consultation.
  • DECC’s proposed energy efficiency consultation – cutting the amount of electricity used in Britain’s homes, businesses and industry.

Meanwhile, the uncertain future of the UK’s carbon capture programme is heightened by reports that the European Commission may refuse additional funding. The UK’s CCS timetable has been so delayed it is now out of sync with the EU (ie slower), which wants CCS for coal. And it’s no secret that the Coalition is split over a new gas strategy. For the TUC, carbon capture is a key technolgy, and yet coal, it seems, is the forgotten fuel, hardly mentioned in today’s Energy Bill briefings.

Although consumers’ bills will need to rise to allow this much-needed investment in low-carbon energy to take place, the TUC also argues that the government needs to redouble its efforts to tackle fuel poverty. A new drive on energy efficiency measures is essential to make sure that the poorest families are protected from any increase in their bills.