Green energy vital, says David Cameron

David Cameron today backed the growth of renewable energy as “vital” to the UK's future - but warned green power sources had to be financially sustainable.

Speaking specifically on the environment for the first time since pledging to lead "the greenest government ever", the Prime Minister said the UK was now one of the best places in the world for green energy, investment and jobs.

In a riposte to critics of renewables, including Tory backbenchers who have attacked subsidies for wind power, Mr Cameron said he "passionately" believed the rapid growth of renewable energy was vital for the future.

But his comments were dismissed by environmentalists who said the sector, which is growing by 4% a year while the rest of the economy slides back into recession, needed consistent support from across Government - including the Treasury.

The Chancellor George Osborne has been accused of "anti-green rhetoric" after warning green policies could put a burden on business.

In last month's Budget he championed gas and handed out £3 billion in tax breaks for North Sea fossil fuels.

Today, the Prime Minister broke a virtual silence on the green agenda since coming to power to say that he believed growth in renewables in the UK was not just good for the environment, but "good business" too, creating thousands of jobs.

He told ministers from 23 countries attending a clean energy meeting in London: "Of course, nuclear energy, cleaner coal, oil and gas - including shale gas - and carbon capture and storage are all going to have a role to play."

But he said: "I passionately believe the rapid growth of renewable energy is vital to our future."

He said the challenge was now to make clean energy financially sustainable and to bring costs down, warning that with families struggling to pay bills in the face of high gas prices, "we don't just need greener energy, we need cheaper energy".

Renewables could become among the cheapest sources of energy for the UK, he suggested.

But the technology was still relatively expensive, although the cost of solar and onshore wind farms had fallen and the Government would work with industry to reduce the costs of offshore wind.

He said that when the costs of renewables fell, it was right that consumers should pay less in green subsidies.

But in a move to reassure companies who have been hit by policy uncertainty - embodied by the cuts to subsidies for households with solar panels - he promised: "When we have made a commitment to a project we will always honour it in full."

And Mr Cameron insisted he was sticking to his pledge to be the greenest government ever, telling the meeting: "Today we are one of the best places for green energy, green electricity, green investment and crucially green jobs."

He announced a new industry partnership to make the most of the North Sea's renewable resources, such as offshore wind.

Companies also announced £350 million of new investment in UK renewables today, representing 800 jobs, including a £300 million biomass project by Helius Energy at the Port of Bristol.

E.ON said it was awarding a major contract for the installation of cables for its Humber Gateway offshore wind farm to British company Balfour Beatty, and Eneco and EDF are set to form a joint venture to develop the Navitus Bay offshore wind farm to the west of the Isle of Wight.

But green campaigners and the renewable energy sector, who had been hoping for a major policy speech on the environment from the Prime Minister, called for more Government support and certainty to encourage investment.

Greenpeace executive director John Sauven said: "It is right for the UK Government to back a new North Sea industry partnership to deliver the massive potential for renewable energy in the region, including linking key countries together in a super grid.

"This has the potential to end our reliance on gas and create thousands of jobs.

"But fine words are not enough.

"The UK Government, including the Chancellor, has got to be more supportive of renewable energy in order to attract the huge amounts of investment required in a tough economic environment."

Institution of Civil Engineers (ICE) director general Nick Baveystock warned the UK was a long way from capitalising on the opportunities of clean energy.

"To realise this ambition, Government must urgently move out of the rhetoric and give industry and the public certainty through action not words," he said.

"Tackling the remaining barriers to developing and upscaling renewable energy sources is crucial for our future energy security - the longer we delay, the fewer and less attractive the options."

Meanwhile, consumer group Which? called for the Government to ensure that green policies did not increase the burden on bill-payers.

Rhian Kelly, director for business environment at business group CBI, said the Prime Minister's comments on the potential of the green economy would help repair investor confidence in the sector after the recent policy uncertainty.

"Major investment is needed from the private sector to decarbonise our energy infrastructure and create new jobs across the country.

"What we need now is clear ambition from government, greater consistency and to establish market conditions that will help build momentum."

Dale Vince, founder of renewable energy company Ecotricity, said success in the sector, which added more capacity in the last two years than at any time in the last decade and supplied almost 10% of UK electricity last year, was not down to new policies by the Government.

Successful policies were inherited from the previous government and renewables growth would have been greater had it not been for coalition moves to reduce subsidies for domestic solar electricity and to prevent a boom in "solar farms", he said.

"Mr Cameron says he passionately believes the rapid growth of renewables is vital to our future - but his words don't match the Government's deeds to date.

"In Britain today we face not only a looming energy gap, but a reality gap - between Government rhetoric and actual reality. We can't close one gap without closing the other first," he said.

PA