In a speech to be given this week Amber Rudd, the energy secretary, will say that keeping the lights on across Britain now takes priority over the pursuit of green energy.
Ms Rudd is expected to blame her Labour and Lib Dem predecessors’ expensive subsidies to wind and solar farms as the cause of the energy prices facing people in the UK.
She is due to state that her new approach will keep a balance between “the need to decarbonise with the need to keep bills as low as possible”.
She will also say:
“Energy security has to be the first priority. It is fundamental to the health of our economy and the lives of our people,”
Ms Rudd also wants to make it plain that continuing ageing and polluting coal power stations is not the way to deal with the country’s current energy crisis. Instead she will point to the construction of new gas and nuclear stations as the answer from this point onwards.
The Department for Energy and Climate Change is reportedly deciding upon a closure date for the remaining coal plants in the UK. The policy was still being decided upon at the weekend but it is understood that the date may be as early as 2023.
The move will be met with strong opposition however, as almost 30% of the UK’s energy last year was produced from stations such as these. It is already understood that the risk of blackouts has increased as result of recent closures.
However Ms Rudd will give a warning that these old plants are getting less and less reliable with age and will point to the breakdowns at several of them a few weeks ago, which led to emergency procedures being taken by the National Grid to keep homes powered.
It is thought that Ms Rudd believes that coal will have a part to play in the “short term” but she thinks that “longer term, it seems obvious that the risks from relying on ageing coal plants, which requires heavy investment just to maintain the plant, will increase”.
She will also reveal that she has requested that National Grid review coal plants to “assess whether coal reliability is worsening”.
The current government wants to replace many of these coal plants with gas powered alternatives but she will say that “no form of power generation, not even gas-fired power stations can be built without government intervention.”
She will go on to state that Labour policy in 2008 shifted to one in which the government “set prices and provided a subsidy for every technology regardless of its costs or contribution to energy security and carbon reduction”. She believes that under this policy “success was measured by how fast renewable energy could be installed, not by how cost effective our carbon cuts were or what the impact on energy security would be”.
In the last part of the Coalition’s time in office, wind projects had to compete for the payment of subsidies. The subsequent applications proved that they could be done with much lower levels of subsidy.
She will highlight the importance of this:
“This matters because the people who pay the cost of these decisions are families and businesses. They got little say over any of this, but they will be paying the price for years to come,”
She will go on to say:
“New, clean technologies will only be sustainable at the scale we need if they are cheap enough. When costs come down, as they have in onshore wind and solar, so should support.”
“Subsidy should be temporary, not part of a permanent business model. We need to provide a level playing field, where success is driven by your ability to compete in a market, not on your ability to lobby for subsidy.”
The so-called “policy reset” in the energy department has been long awaited by companies within the industry so that they can be sure about where the sector is headed. However, the head of energy at the Policy Exchange think tank, Richard Howard, doesn’t think the changes will be too drastic:
“I think the objectives stay the same: we still have carbon targets which the government has said it’s committed to; energy security will remain a very high priority and the same with energy affordability,”
