Former energy and climate change secretary, Ed Davey, says the UK Treasury is running a campaign against green energy fuelled by what he calls ‘bonkers economics.’
Mr Davey told the Guardian newspaper that he had to fight very hard during his tenure to drive private investment into the renewable energy industry, and succeeded only in limiting the damage the ruling Conservative Party’s treasury department were doing. Since winning an election majority, the former Liberal Democrat minister says the government has been free to further undermine what had been a very successful policy.
“What is frightening is that, despite all that success in low-carbon energy infrastructure, [Osborne] is prepared to send those disastrous signals. It was bad enough in the coalition when they were sending mixed signals but now there is no mixed about it.
“It is ‘we don’t want it’ and [renewable energy investors] will go elsewhere and we will lose out on tens of billions of pounds of private sector investment.
“Canals and railways would not have been built if people had taken this kind of short-term, unimaginative, inward approach. He is the opposite of an entrepreneur when it comes to green energy.”
Since the government was re-elected, it has inflicted big cuts on the renewable energy sector, phasing out aid for zero-carbon homes, onshore windfarms and solar arrays.
Davey told the newspaper he faced ongoing resistance to his approach despite the success of the policy in bringing in private investment. He added that the Tories were keen to downplay the achievement of the energy department because it was being overseen by a minority minister.
“I had to fight like a tiger to stop him [Osborne] slashing the budget on fuel poverty and on renewable energy. We succeeded although he still took a chunk out of the ECO [Energy Company Obligation] energy efficiency programme. It was much less than he originally wanted and that fight went on for two months. It was huge.”
“It’s frustrating because we [the UK] were doing so well and also alarming for the economy. It was an inconvenient truth for George Osborne that the green economy was doing extraordinarily well and the investment in energy infrastructure – primarily low-carbon energy infrastructure – that happened under the coalition government and is in the pipeline to continue was the infrastructure success story of the government.
“Not transport that he used to go on about, not telecoms, not water – it was energy. “This is another thing I don’t get about Osborne’s economics. They are really bonkers. The vast majority of this investment is private sector. Compare that with roads or railways or flood defences where it’s always the taxpayer.”
A Treasury spokesman said: “The government is committed to cutting carbon emissions while also controlling energy bills and saving consumers money. That’s why we’ve taken urgent action on spending to protect households and businesses from higher than expected costs. Government support has already driven down the cost of renewable energy significantly, but it is important that this support is affordable and offers good value for money.”
Davey also told the newspaper that while there was enough green infrastructure in the pipeline for the rest of the decade there would follow a new dependency on gas, and with power prices likely to be low, the Conservatives could end up having to subside gas-fired power stations to keep them working.