Outlook: Energy review

PETER MANDELSON was expelling enough hot air yesterday to power a town the size of, say, Hartlepool. However, all the waffle in the world cannot obscure the Secretary of State for Trade and Industry's crude intervention in the energy market. Faced with the prospect of the coal industry closing down, the Government has blanched and shut the door instead on any further gas-fired power stations "until the distortions in the market are removed".

It is an odd sort of market that has to be rigged by government dictat in order to be opened up later. Mr Mandelson insists he has not bought miners' jobs at the expense of jobs in the North Sea or the construction industry. He also declines to play the numbers game by giving coal a set market share, insisting instead that coal will have to fend for itself.

When it comes to renewable energy, however, ministers come over all misty- eyed and wax lyrical about 10 per cent of Britain's homes running on wind and wave power by 2010. Back in the real world of energy, they fall back on the fuzzy mantra of "diversity and security of supply".

Yesterday's white paper on energy policy runs to 196 pages. But the reader will search in vain for an answer to how long the gas ban will last. Nor do we know what chance Mr Mandelson has of squeezing his reforms of the electricity trading market into the legislative timetable.

The biggest test of our long-term energy policy and green agenda - what happens when nuclear starts to run down - is relegated to a single paragraph. That will have to wait for another white paper, rushed out presumably like this one when the crisis is upon us. Meanwhile the Government's free market model has suffered a nasty dent, which Mr Mandelson and his spin machine at the DTI will have to work hard to panel-beat out.