Leading article: A blow to renewable energy?

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A dissonance is blowing in the wind. Last week the Climate Change and Energy Secretary, Ed Miliband, spoke of his ambition to create hundreds of thousands of "green" jobs over the coming years as Britain builds up its wind power capacity. Yet 625 green jobs are due to be shed at a wind turbine blade factory on the Isle of Wight. This follows Shell's decision last year to pull out of the London Array offshore project and Iberdrola Renewables' decision to cut investment in Britain. A credibility gap seems to be opening up between government rhetoric and the reality.

Climate change activists protesting in solidarity with the Isle of Wight plant workers have called on the Government to nationalise the factory. But this could do more harm than good. While Britain needs to build up its domestic wind farm industry, the Government does not have a happy record when it comes to intervening directly in the private sector.

And several aspects of this dispute are murky. The plant is owned by Vestas Wind Systems, the world's biggest wind energy group. The Danish firm has cited planning restraints and local opposition to projects as reasons for their decision to close the factory. But Vestas makes blades for the US market which are unsuitable for UK wind farms. Ministers also claim that Vestas is considering setting up a research and development facility in the area to help develop and test products suitable for the UK offshore market. If this is the case, it is easy to see why rash moves by the Government now could ultimately prove counterproductive.

What the Government ought to focus on is building a strong regulatory framework to ensure growth of the renewable energy sector in Britain. It should subsidise research and guarantee a market for renewables firms. The most positive contribution it can make is to put a price on carbon emissions from energy production. These are the measures that will encourage private firms to invest in renewables, from wave, to wind to solar power. If the Government creates this framework, these setbacks will be remembered as mere teething troubles in a renewables revolution. But if it fails to do so, the dissonance will only grow louder.

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