UK: Energy minister gets 'tough' on subsidies, backs fracking

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Amber Rudd, the U.K. Energy Secretary, addressed the Conservative Party conference in Manchester, England, yesterday, stating in no uncertain terms that the government is eager to get tough on energy subsidies, claiming that there is "no magic money tree" for clean energy.

The Minister, who rather infamously said she would seek to unleash a "solar revolution" after her appointment in May, left little doubt as to where the government’s stance lies in its support of renewables.

"I support cutting subsidies," she said. "Not because I am an anti-green Conservative, but because I am a proud green Conservative on the side of the consumer. We must be tough on subsidies. Only then can we deliver the change we need."

Rudd’s speech, which tellingly made no mention of the forthcoming UN climate talks in Paris that have seemingly been at the forefront of discussions among most other national energy ministries, went on to reaffirm the Conservative’s support for fracking, citing evidence from the U.S. that showed the energy was "cheaper, without subsidy, than the alternative".

"The kind of transformation we need of our global energy system will only happen if low-carbon energy becomes cheaper than the alternative," Rudd said. "The only long-term way to solve the real tension between affordability, security and low carbon is to discover low-cost, low-carbon technologies."

The ‘discovery’ of solar PV as an affordable solution was dealt with off-handedly by Rudd, who added: "With solar costs continuing to fall and new innovations in battery storage, renewable energy can stand on its own two feet."

Stance angers clean energy advocates

The Department of Energy and Climate Change (DECC) announced in August proposals to slash the feed-in tariff (FIT) for small-scale solar installations by as much as 87%, and based much of its argument on Rudd’s belief that solar has already eaten up too much of the Levy Control Framework (LCF) budget.

However, Rudd’s support for fracking has, in the eyes of clean energy advocates, served to confirm what many had feared: that the government’s regressive actions against clean energy are ideologically rather than economically motivated.

"Government cuts to renewable energy subsidies are short-sighted and politically motivated," Liz Hutchins, Friends of the Earth senior campaigner, told pv magazine. "Slashing support for rooftop solar will prevent more than one million people from installing systems, threaten more than 20,000 jobs and undermine efforts to tackle climate change."

Hutchins added: "But the government continues to nurture the ‘magic money tree’ for the coal, oil , gas and nuclear industries, which all receive billion pound subsidies every year."

While the debate over whether the government’s approach to energy is ideological or politically motivated will run and run, what is inarguable is that the Conservative’s policy does appear to be short-sighted, as suggested by Hutchins.

Rob Gross, director of the centre for energy policy at Imperial College London, has said that the confusing messages emanating from government pose the biggest threat to the U.K.’s renewable energy industry.

"There is a lack of clarity over what they want people to do," Gross said. "This lack of clarity is erasing investment in everything. With more clarity, you would get more investment."

The previous coalition government, Gross added, at least made it clear that bill-payers would be subjected to a low-carbon power cap, but the Conservatives have yet to make a decision on what that cap will be after 2020 – a situation that leaves many would-be energy investors perilously uncertain.

REA labels speech ‘missed opportunity’

The head of policy and external affairs at the Renewable Energy Association (REA), James Court, has conferred to pv magazine the association’s disappointment with the speech, calling it a "missed opportunity to reassure the shocked investment community" that operates in the renewables industry.

"The renewables industry," Court added, "identifies with the repeated motto ‘We are the builders’, considering renewables have added 20% to the U.K. electricity grid in the past five years, while almost nothing else has come online."

The REA says that the clean energy sector has been building low-carbon critical infrastructure across the U.K. for the past half decade at ever-decreasing costs, with overall costs across the clean technologies expected to decline for the decade to come. "Can other energy generation technologies say the same?" Court asks.

"How much longer do we need to wait to hear the Conservative government’s low carbon energy strategy? We have repeatedly seen proposals for cuts to renewables tariffs and policy, but nothing new to fill the void.

"From the outside it may seem like there is no cohesive energy strategy. Frustratingly it looks the same from inside the industry, as we have seen differing sets of rules for each sector, without any indication of joined up thinking."