Energy Secretary Ed Davey defends green reforms

George Osborne is offering to drop his calls for deeper cuts in subsidies for onshore wind farms (PA)

Energy Secretary Ed Davey has hit back at suggestions that the Government's green reforms are “unworkable”, saying householders will be better off.

Mr Davey was responding to concerns from MPs that consumers will face bigger increases in fuel bills because of policy differences at the heart of Government.

The Commons Energy and Climate Change Select Committee was particularly critical of the Government's attempts to encourage nuclear investment through long-term price agreements, but without the sweetener of a subsidy.

Mr Davey refuted the suggestion and renewed his support for the "Green Deal" which will be launched this autumn. He said: "I do not believe for a minute that fuel bills are going to soar.

"Our analysis shows that the average fuel bill will be 7% lower by 2020. Our policies are absolutely desirable to keep costs down."

He added: "I have spoken to many energy companies, investors and academics who very much support the proposals in the bill.

"There are a number of issues which people have been raising. The whole drive of the bill is partly to decarbonise and clean up our emissions, and to do that in the most cost-effective way. This is part of our way of helping the country move towards a low-carbon situation and make it (fuel) more affordable.

"Affordability of bills is critical to (the Department of Energy and Climate Change). Everything we are doing has affordability at its heart.

"There is always going to be some pressure on bills through global markets, but what we're trying to do is offset those pressures. That is exactly what the Green Deal is about."

Earlier today, Mr Davey was boosted by the news that Chancellor George Osborne appeared to back down on a long-running dispute, after offering to drop his calls for deeper cuts in subsidies for onshore wind farms if his Liberal Democrat coalition partners compromise on "inflexible" green energy targets.

Amid coalition wrangling over the shift away from fossil fuels, the Chancellor urged the Lib Dem Energy Secretary to retain a big role for natural gas rather than commit to the virtual decarbonisation of the electricity market by 2030.

In return, he is prepared to accept Mr Davey's proposed cut in onshore wind subsidies of just 10%. The Treasury has been pressing for tougher cuts in the subsidies, of up to 25% according to reports.

In a letter to Mr Davey, the Chancellor urged the Energy Secretary to make a "clear, strong signal" of support for "unabated gas" up to 2030 and beyond, including a promise that consumers would benefit from falling gas prices.

Asked about Mr Osborne's refreshed stance on wind subsidies, Mr Davey replied: "This deal will trigger, I believe, a lot of investment and jobs, whether it is in onshore wind, offshore wind, biomass or others. I think it will really drive jobs."

Mr Davey was speaking at the launch of the Cornwall Together initiative, a project which aims to use collective buying power to drive down bills for the county. It is believed to be the first scheme of its kind in the country.

Addressing energy experts at the Eden Project today, Mr Davey said those signing up to the scheme at cornwalltogether.com would be able to trim "nearly £200 a year" from their bills.

Eden Project co-founder, Tim Smit, added: "We want to suspend the cynicism and find the root to possibilities."

Mr Davey said he had written to local authority bosses across the country, "telling them about Cornwall Together", adding that the scheme - if successful - had the potential to be rolled out across Britain.

PA