One of the Conservative party’s biggest donors has launched an unprecedented attack on George Osborne, David Cameron and Ed Davey, accusing them of squandering an opportunity to create thousands of jobs and billions of pounds of revenues by scaring off desperately-needed investors in the UK offshore wind industry.
Alexander Temerko, a significant British energy investor whose company Offshore Group Newcastle builds foundations for offshore wind turbines and constructs oil and gas platforms, is best known for being one of the 12 Tory party donors who enjoyed a private dinner with the highest echelons of the Conservative party this spring after making donations totalling more than £50,000. He has donated a total of £208,500 to the party in the past two years.
But he has become extremely frustrated by what he calls the Government’s “hypocritical” approach to energy policy and is dismissive of David Cameron’s pledge to lead the “greenest government ever”.
“He [Cameron] must be responsible for his words, his promises. We voted for him and part of his Conservative manifesto was to support green energy and renewables. But he has not done that,” said Mr Temerko.
His intervention is significant because he is the first high-profile investor to publicly criticise the Government’s green energy policies. Previously, concerns have been voiced only behind closed doors.
Will Straw, of the Institute of Public Policy Research think-tank, said: “It is very significant that a foundation manufacturer has now criticised the Government’s approach to offshore wind. The Government should immediately legislate for a 2030 decarbonisation target [to green the power supply].”
Mr Temerko also accused the Coalition of paying little more than lip-service to renewable energy. The Government says it backs electricity generated from sources such as wind and solar power, but has failed to provide the necessary targets and clarity on subsidies for green electricity generation which investors need before they can commit to a long-term project like a wind farm, he contends.
“The situation is frankly astonishing. The Treasury is definitely a big stakeholder for the uncertainty. But you can’t only blame George Osborne,” Mr Temerko said, arguing that the Prime Minister and Ed Davey, the Energy and Climate Change Secretary, have also played a role in confusing investors.
Mr Temerko added: “The Government has been seriously, seriously, seriously misleading. It has given a declaration on renewable energy without crystallising what it’s going to do to support investment. Government policy is not fair at the moment. If it told us ‘look, we don’t want to develop a low-carbon economy anymore’, we would say ‘thank you, now we know what to do’.
“Instead, the Government has created big enthusiasm – but we are still waiting for a clear policy and definitive support. Green energy is very hypocritical from the government side.”
His comments relate to offshore wind generation, where the UK’s geography gives it tremendous potential, rather than onshore turbines, which are the subject of widespread opposition from local communities.
Mr Temerko says that the lack of government reassurance is putting manufacturers and consultants off setting up shop in the UK, meaning that the country has to import 82 per cent of the parts and services in the “supply chain” when it should be doing the vast majority in Britain.
“The areas of this country that have the highest levels of unemployment are also the areas that have the richest heritage of industry,” said Mr Temerko, whose company recently delivered a platform for a £400m construction project in the North Sea’s largest oil field, known as “the Forties”.
“We can transfer those skills to the offshore wind industry to capture a windfall of jobs and investment that will otherwise go to Europe and the Far East,” he said.
He argues that Britain still has an opportunity to build a world-class wind-power manufacturing and consultancy base, employing thousands of people and generating tens of billions of pounds of revenues in the coming years. The goods and services it produces could be used in the UK and sold around the world, he said.
“There’s the potential to invest £70bn in British industry for UK offshore wind alone while the CEBR [Centre for Economics and Business Research] recently predicted that would create 170,000 jobs. But under present conditions, it is hard to see how that will materialise,” he said.
Mr Temerko is most angered by the lack of a “decarbonisation target” for electricity, which he says would send a clear signal that the Government is serious about renewable energy and give investors confidence.
Mr Davey fought to include a target in the Energy Bill currently passing through parliament that would have required Britain’s electricity supply to become almost entirely green by 2030. However, Mr Davey, a strong supporter of wind farms and advocate of green energy, was overruled by Mr Osborne, who has raised concerns about his commitment to renewable power by his enthusiasm for shale gas.
Asked if Mr Davey should have stood up more to the chancellor, Mr Temerko replied: “Yes. We’re ready to help Ed Davey.” He added that the Energy Secretary’s message “was very strong and very clear, but after the message we want to see some real progress”.
Mr Temerko is also concerned about the lack of a renewable energy target for Britain beyond 2020. The existing target requires about 15 per cent of the country’s gas and electricity to be generated from renewable sources by then, but beyond that, as things stand, power companies are free to increase their use of fossil fuels.
Last month Nick Clegg launched the Offshore Wind Strategy, a plan to quadruple the size of Britain’s offshore wind industry within seven years, creating 26,000 new jobs and transforming sea-based turbine energy into a £7bn-a-year business by 2020.
He announced £46m to support the “supply chain” of goods and services needed to build the wind turbines and to help developers bring innovative new wind power-related products to the market.
But Mr Temerko said it did not go far enough: “The strategy was a useful signal to the industry that this Government remains committed to the principle of developing the offshore wind sector, but we need more action taken to ensure that the UK sees real benefits in terms of jobs and growth.”
A DECC spokesman said: “The UK is already recognised as one of the most attractive locations in the world for offshore wind investment, with more installed here than the rest of the world put together. The reforms we’re making to the electricity market are designed to increase investor certainty further and bring forward investment in wind and other renewables.”
A Treasury spokesman said it supported DECC’s stance.
Tory donor on Russia’s wanted list
Alexander Temerko, a Russian living in London, is wanted by the Russian government on fraud charges. He has always insisted that the charges were completely unfounded and in 2005 a London court agreed, ruling that an attempt by his home country to extradite him for fraud was politically motivated. It allowed him to stay in Britain.
The extradition attempt related to his old company Yukos, the Russian oil giant where he served as deputy to Mikhail Khodorkovsky, a political opponent of Vladimir Putin who was jailed by a Russian court in May 2005. Yukos was broken up and most of the assets are now owned by Rosneft, the Russian oil giant that recently struck an alliance with Britain’s BP.
A Conservative by nature, the wealthy Mr Temerko quickly set about forging ties with the Tory party on his arrival in Britain and has donated £208,500 to its cause in the past two years. This includes £104,500 worth of contributions in the first three months of the year, making him the eighth biggest donor for the period. His company, Offshore Group Newcastle, has donated a further £139,655.
However, Mr Temerko has grown increasingly frustrated with the Government for projecting a contradictory stance on green energy, which is putting off investors like him from backing offshore wind and other renewable energy projects.
Although he is disappointed with the Tories in this respect, he has no intention of deserting the party or stopping his donations. “I’m very loyal. I will continue to be a very active member of the party but will criticism them,” he said.
Offshore Group Newcastle is his first company of this type in the UK. If it goes well, he may create more - but its success largely depends on the health of the UK’s offshore wind industry. (Picture credit: PA)
Green and pleasant land: Targets in place
Ed Davey campaigned to include a target in the Energy Bill currently passing through Parliament that would have required Britain’s electricity supply to become almost entirely green by 2030.
However, Chancellor George Osborne then overruled him and replaced his planned target with something considerably weaker – granting the Government the power, from 2016, to require Britain’s electricity supply to become almost entirely green at some point in the future, should it vote to do so.
Offshore wind target
The Government said it was their an aspiration in 2011 to create 18 gigawatts of power from offshore wind generation by 2020 – potentially amounting to several thousand turbines. However, earlier this year the government appeared to lower its ambition, revising its projection to 11.5GW by 2020, rising to 16GW by 2030.
Renewable energy target
The UK is currently signed up to a legally binding European Union renewable energy target requiring it to produce about 15 per of its energy from renewable sources by 2020. However, beyond that there is presently no target in place, meaning that power companies are free to reduce the amount of energy they produce from renewable sources.
Despite calling on other EU governments to set a target to reduce emissions by 50 per cent by 2030, the coalition said in May that it would oppose a Renewable Energy target for 2030 to “maintain flexibility for member states in how they meet this ambitious target”.Reuse content