Coalition 'united on carbon cuts', says Nick Clegg

Deputy Prime Minister Nick Clegg today dismissed claims of rifts within the coalition Government over its commitment to cutting carbon emissions, as he unveiled a £100 million investment in energy efficiency.

Speaking to an energy conference in London's Lancaster House, Mr Clegg insisted ministers were "unreservedly committed" to helping the low-carbon sector, declaring "no-one in Government" wanted to ditch the programme to decarbonise Britain's economy as part of the fight against climate change.

Mr Clegg told an audience of business figures that the UK was "leading from the front" in a global revolution towards cleaner sources of energy.

He announced a £100 million contract by UK Green Investments with fund managers Equitix and SDCL to provide initial funding to encourage foreign and domestic investment in non-domestic energy efficiency.

Many environmentalists were dismayed by Chancellor George Osborne's comment to last year's Tory conference that, while the Government would invest in green energy, "we're not going to save the planet by putting our country out of business".

The Treasury is understood to have demanded cuts of 25% in subsidies for onshore windpower in a tussle between Mr Osborne and Liberal Democrat Energy Secretary Ed Davey, which ended last month with a 10% cut but question marks hanging over the 2030 target for decarbonising the economy.

Mr Clegg however sought to play down the spat as part of the "internal discussions and debates on the balance and sequencing of different policies" that are a normal feature of any government.

"This coalition Government is unreservedly committed to helping our low-carbon sector thrive - no ifs, no buts," he said. "And we want to support the shift by traditional industry to cleaner sources of energy - while of course recognising the pressures they face."

The Liberal Democrat leader added: "The coalition is sometimes presented in the press as if it is riddled with debate and division with regard to greening the economy. That isn't the case.

"Yes, there will be internal discussions and debates on the balance and sequencing of different policies - that's the nature of any government - and energy policies will evolve over time as costs come down.

"The entire Government is working within the parameters of the carbon budget, which sets the pace for decarbonising our economy, and there is no-one in Government who wants to depart from that."

Mr Clegg said ministers recognised the industry needed "predictability" and "consistency" from the Government on low-carbon energy policy.

He insisted that the coalition remained "bold" in its ambition for a "clean, green, low-carbon economy".

"There is a global energy revolution under way, and the UK is not going to be left behind. We're leading from the front," the Deputy Prime Minister said.

The Government was warned that progress on technology to capture carbon emissions from fossil fuel power stations and store the gas permanently underground - a process known as carbon capture and storage (CCS) - was falling behind.

Carbon capture and storage is seen as a key element in decarbonising the energy system, but has yet to be demonstrated at a commercial scale.

A Government project to fund up to £1 billion for a commercial scale scheme in the UK had to be restarted after the only scheme left in contention for the money, Longannet power station in Scotland, fell through.

Graeme Sweeney, special adviser to oil giant Shell on carbon dioxide who is speaking at the conference today, urged the Government to reinforce its commitment to the technology.

He said: "The harsh reality is that the growth in CCS is falling behind.

"Urgent and decisive action is needed to ensure CCS is a commercial option in the future for society to reach decarbonisation goals."

With its expectation that fossil fuels will continue to play a large role in meeting the world's energy demand in coming decades, Shell says CCS is important as the only technology available to cut emissions from large-scale power plants.

Shell is bidding to develop carbon capture and storage with Scottish and Southern Energy (SSE) at Peterhead gas-fired power station, Aberdeenshire, subject to Government funding.

Mr Sweeney said: "CCS is one of the few technologies that is entirely driven by climate change concerns, which means a global CCS industry will not emerge without policy intervention - governments need to reinforce commitments to CCS.

"It is important to reduce the significant investment risk posed by early CCS projects by funding demonstration projects."

Responding to Mr Clegg's speech, Nick Molho, head of energy policy at WWF-UK, said: "It's heartening to hear a senior member of the Government give such unequivocal support for the green economy, although Nick Clegg's suggestion that there's no division in the coalition over the issue is slightly difficult to believe.

"The green economy is one of the few bright spots of economic recovery and the Treasury must stop trying to undermine it.

"We hope the recent infighting over renewable energy does not escalate into a larger battle over energy which would damage investor confidence and undermine growth.

"The big tests of the Government's commitment will come in in the autumn, however, when the Government needs to deliver on commitments to decarbonise the energy sector by 2030, back our growing renewables sector and tackle emissions from transport.

"What we really need to see now is unity within the Government and leadership from the top."

Gaynor Hartnell, Chief Executive of the Renewable Energy Association, also called for clear leadership from the top of Government on renewable energy, and welcomed the Deputy Prime Minister's commitment.

"He is quite right that a global energy revolution is under way and we look forward to working with him to ensure the UK fulfils its extraordinary potential.

"However, the Coalition Government needs to do much better on providing a clear and stable policy framework to make sure the UK isn't left further behind.

"Recent decisions on support levels for renewable power technologies, which have failed to provide the expected certainty out to 2017, together with the uncertain status of the Electricity Market Reform package, do not provide the stable framework that industry needs."

PA