Liberal Democrats fight off Tory effort to cut wind-farm subsidies
Party claims victory over its Coalition partner but green groups fear environmental risk
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Thursday 26 July 2012
Liberal Democrats claimed victory yesterday after fighting off Conservative demands for a 25 per cent cut in state subsidies for onshore wind farms. But green groups said George Osborne, the Chancellor, had extracted a price in return for allowing Ed Davey, the Liberal Democrat Energy and Climate Change Secretary, to limit the reduction in subsidies to the 10 per cent figure announced last year.
The Government will be open to gas playing a major role in electricity production after 2030 if it proves cheap and the Treasury announced £500m of tax relief to encourage the development of marginal fields in the North Sea.
Mr Osborne said gas was the biggest single source of energy in the UK and "a huge national asset". He said: "The Government is signalling its long-term commitment to the role it can play in delivering a stable, secure and lower-carbon energy mix."
Mr Davey also agreed to review the wind-power subsidies, although they will not change before March 2014 to give the industry some certainty.
A senior Liberal Democrat source said: "This is a good result for us. Ed Davey had to dig in on this and resist pressure to go further." He denied that there was a trade-off on gas production.
Mr Davey said the subsidies for renewable electricity could bring in between £20bn and £25bn of investment by 2017, "driving growth and supporting jobs across the economy".
The Energy Secretary insisted that Britain can keep gas in its energy mix and still meet its world-leading law to reduce greenhouse-gas emissions by 80 per cent by 2050. But environmental groups fear that a plan to make most electricity generation carbon-free by 2030 will be put at risk by yesterday's compromise.
Andrew Pendleton, a spokesman for Friends of the Earth, said: "Treasury arm-twisting has forced [Ed Davey] to give his backing to new gas-fired power stations – which is completely at odds with his fuzzy rhetoric on clean British energy. George Osborne's plans would be a costly disaster for households, businesses and the environment. It's time for David Cameron, the self-styled leader of the greenest government ever, to intervene."
The Green Party said Mr Davey had won only a "minor victory". Keith Taylor and Jean Lambert, the Green MEPs, said: "He still seems to have a fight on his hands to convince the Treasury that the UK should seriously invest in renewables."
Yesterday's changes to subsidies will require fossil-fuel power stations to fully convert units to burning renewable fuels to claim higher payments. As a result, shares in the power station operator Drax closed down 17.9 per cent yesterday. The company warned investors that its costs this year were likely to be £20m higher than expected.
The Government's climate-change advisers have said that a new "dash for gas" could lead to its targets being breached unless carbon-capture technology is advanced to reduce emissions from gas.
Caroline Flint, the shadow Energy Secretary, said Coalition infighting is harming the drive to persuade companies to invest in green energy. "The Government's shambolic review of support for renewable [energy] has done huge damage to investors' confidence in the UK as a place to do business. Edward Davey might try to spin this as a victory for the Liberal Democrats, but UK plc has lost out because the Tory-led Government has the wrong priorities," she said.
Government will be open to gas playing a major role in electricity production after 2030
Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt
When teaching the meaning of Christmas backfires
Snowfalls are now just a thing of the past
Church of England threatens to cease BP and Shell investments over climate concerns
Animal Extinction - the greatest threat to mankind
Organic farming can feed the world if done right, scientists claim
Prince William attacks China over 'ignorant craving' for ivory
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
Shock poll shows voters believe Ukip is to the left of the Tories
New era of cheap oil 'will destroy green revolution'
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Ukip founder Alan Sked and Nigel Farage 'begged Enoch Powell to stand as a candidate'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
£25000 per annum: Ashdown Group: An established media firm based in Surrey is ...
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...
£30000 - £65000 per annum: Recruitment Genius: This small technology business ...