Editorial: Another tug at Britain’s unravelling energy plan

Three Energy ministers in only seven months does not inspire investor confidence

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It was a mere seven months ago that John Hayes was parachuted into the Department of Energy and Climate Change.

Out went Charles Hendry – a Conservative esteemed by his pro-green Liberal Democrat colleagues. In came an avowed opponent of wind farms, as part of a reshuffle that attempted to head off criticism from the Tory back benches by tilting the Government noticeably more to the right.

Now Mr Hayes has been moved again. Not because of the dysfunctional relationship that swiftly developed between him and his Liberal Democrat Secretary of State, Ed Davey. Rather, because David Cameron needs Mr Hayes’ parliamentary popularity in Downing Street, to help woo that same, ever-growing cadre of MPs from whom he is so dangerously estranged.

The Prime Minister’s struggle to retain control of his party is a cause for some concern. The rebellious right are gaining disproportionate influence, forcing, for example, a promise of a referendum on Europe, and an increasingly incendiary tone on immigration. Yet each concession only encourages demands for more. And reports suggest that more than half of the no-confidence letters needed to trigger a leadership contest have already been submitted. With local elections looming – and the humiliation of coming third behind Ukip in Eastleigh auguring badly – Mr Cameron’s appointment of Mr Hayes as his senior parliamentary adviser starts to look like panic.

Meanwhile, at the energy department, the ideological logjam will likely continue. Mr Hayes’ replacement is a more emollient character, so the tensions over renewables policy may be less public. But if Michael Fallon’s views are closer to those of his staunchly pro-renewables Secretary of State than his predecessor’s were, they are only slightly so. Indeed, Mr Fallon is not only a right-wing heavyweight, keen to put business first. He is also a key ally of the Chancellor, whose enthusiasm for environmentalism faded fast on his arrival at the Treasury and who is now an active proponent of shale gas, considered by many as an alternative to wind farms.

More telling still is that Mr Fallon will retain his existing job, as a minister in the Department for Business, alongside his new one. Yet it is not as if the Energy minister’s role is a soft option – particularly not now. With demand for electricity ever rising, a fifth of Britain’s dirty and obsolete power stations slated to close in the years ahead, and a legal requirement that near a third of electricity come from renewables by 2020, the energy department faces the ferocious task of keeping Britain’s lights on, and at a price we can afford to pay.

The Coalition’s energy strategy has the right constituents. Ageing coal-fired plants are to be replaced by wind farms, nuclear and some new gas, with the £110bn investment (all of it from the private sector) underpinned by a Byzantine collection of subsidies and floor prices. But the plans are in danger of descending into disarray. Only one company, EDF, is still committed to building new atomic reactors, and funding rows are causing delays before work has even begun. Spats over wind farms between Mr Davey and Mr Hayes, coupled with uncertainty over George Osborne’s gas strategy, are a drag on investment in renewables. And all this against the backdrop of far-reaching – and unforeseen – changes in the global market, as the implications of the Fukushima nuclear disaster in Japan and the US shale gas boom play out.

The challenges are formidable. Yet we have a third Energy minister in seven months, and only half a one at that. That Mr Cameron’s backbenchers are proving so intractable is disquieting enough. Another spasm of uncertainty affecting Britain’s energy strategy is worse.

 

 

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