UK energy bill

Is David Cameron playing politics with energy bill? Image by Getty

When in doubt, kick the can down the road. That is what has happened with the UK energy bill after weeks of bitter negotiations between the Treasury and the department now known across Whitehall as DoSAC – after the disfunctional organisation in the television comedy series The Thick of It.

A couple of weeks ago, I said the bill would seriously disappoint some participants in the debate. The conclusion as announced – and we will only see the detail next week – seems likely to disappoint everyone.

The core decision is that long-term policy is postponed until 2016, after the next election. But the energy business does not work to election timetables or four-year horizons. Most investments are designed for decades, and in some cases, such as nuclear and power generation, the payback for investors won’t come until 10, 15 or even 20 years into the project. The investors, it is always worth remembering, are not men in black hats but ordinary people trying to decide what to do with our collective savings – in particular our pension funds. Read more

Vast onshore wind farms are not a viable option for the UK

Barring a last minute intervention by the Treasury, the UK government will publish its new energy bill within the next few days. As it stands, the bill is a triumph of politics over economics and common sense – a symbolic victory for the Liberal Democrats designed to keep the coalition’s unhappy marriage together.

The problem is that serious investors will not believe a bill that reinforces subsidies to onshore wind, puts no hard numbers on the subsidies necessary for nuclear new build, sidelines the potential of energy efficiency and further technological advances, and completely ignores the issue of energy costs and competitiveness. Read more