Commons rejects decarbonisation target
MPs in the House of Commons narrowly rejected an amendment to the Energy Bill that would have seen the new legislation include a target to ‘decarbonise’ the electricity sector.
In the third reading of the Energy Bill yesterday (4 June), 290 MPs voted against bringing in a target to see nearly all of the UK’s electricity generated from renewable sources (rather than ‘dirty’ gas), by 2030 – just 23 more than those who were in favour.
The bill marks a major step-change in the UK energy market, and would see the current system, which guarantees a premium for renewable energy generators, replaced by a ‘contracts for difference’ system involving long-term renewable energy contracts paid through standardised ‘strike prices’ – yet to be set. The delay in setting a strike price is thought to be borne out of a difference in opinion between the government and French nuclear power company EDF, which recently gained planning permission to build and operate the UK’s first new nuclear power station in decades.
The decarbonisation amendment had gained much cross-party support, with members of the Labour Party, the Scottish National Party, Plaid Cymru and Green Party, as well as ‘rebel’ Conservative MPs voicing support for introducing the target.
As well gaining popularity with MPs, the amendment, tabled by the Chairman of the Energy and Climate Change Select Committee, Conservative MP Tim Yeo, had gained support from businesses and environmentalists alike. Those in favour argued that setting a target sooner than 2016 (as originally set out in the Energy Bill) would provide the certainty low-carbon investors needed to stimulate economic investment in renewing the UK’s energy infrastructure and reducing the UK’s carbon footprint.
Indeed, government policy advisor, the Committee on Climate Change, was so concerned with government’s statement that the use of gas will not be ‘restricted to providing back up to renewables’ but will ‘play an important part in the energy mix well into and beyond 2030’, it wrote an open letter to Energy and Climate Change Secretary Ed Davey warning him that government could breach the Climate Change Act’s legally binding target of an 80 per cent cut in greenhouse gas emissions by 2050 (on 1990 levels), if it pursues plans to see a surge in new gas investment.
Concerns over renewable energy situation
However, Davey had shown little support for bringing the decarbonisation target forward, saying earlier this week that the government will be “legislating to set a decarbonisation target range for the power sector in 2016, something no political party had in their manifesto, but an issue that this Coalition government has addressed head on”.
Many of the MPs who had voted against the target, including Conservative MP Charles Hendry, argued that the challenge with a decarbonisation target being set now for 2030 is that ‘we cannot yet know how it can be met – or indeed, if it can be met’.
Concerns had been voiced over uncertainties in the future of renewable energy capacity, with Hendry saying that ‘Nuclear may not happen on the scale hoped for’, offshore wind and tidal energy ‘may remain too expensive’ and that carbon capture and storage has yet to be ‘proven commercially’.
Outcome is ‘disappointing’
The outcome has largely been greeted with ‘disappointment’, with Executive Director of environmental group Friends of the Earth Andy Atkins, saying: “The Liberal Democrat leadership's green credibility has been left in tatters after siding with the Conservatives to back a headlong dash for gas – this would send fuel bills rocketing and jobs overseas, and punch a gaping hole in our climate targets.
“With significant numbers of MPs defying the party whip to join the Opposition by voting for clean power, this issue will not go away.”
Members of the renewable energy industry have likewise voiced their ‘disappointment’ with the decision, with the Chief Executive of the Renewable Energy Association, Gaynor Hartnell saying that it is now ‘even more important’ that an EU-level renewables target for 2030 is set.
She said: “Failing to decarbonise our electricity supply industry will have long-term consequences both environmentally and economically. The government’s own advisors, the Committee on Climate Change, state that relying on gas will only save the country money in a scenario of low gas prices, whereas switching to renewables would save the country £25 to 45 billion by the 2020s.”
Commenting on the failure of the Commons to pass the amendment he proposed, Tim Yeo MP said: “The Commons has missed an opportunity today to provide more clarity for investors on the future direction of energy policy. Unfortunately this could mean that urgently needed investment in our energy infrastructure will be slower and the risk of a capacity crisis greater.
“The continuing uncertainty that will result increases the perceived risk of investment and will therefore raise capital costs, meaning that consumers may ultimately pay more for the new power plants that need to be built.
“Perhaps more worryingly, failure to introduce a clean energy target now could make it harder for the UK to meet its long-term carbon reduction targets, forcing future governments to take more costly action to curb emissions later when the impacts of a changing climate become more acute.
“Fortunately, the House of Lords still has a chance to amend the Energy Bill to ensure the government takes the advice of its statutory independent climate advisors for decarbonising the electricity generation industry. I urge my colleagues in the other house to continue the fight.”
Progression of the bill
Overall, 396 MPs supported the continuation of the Energy Bill through the legislation process, with just eight voting against it. The bill will now move to the House of Lords, where it is expected that peers will back the decarbonisation of the sector.
Speaking of the third reading, Secretary of State for Energy and Climate Change Edward Davey, said: “The positive vote for the Energy Bill is one of the biggest majorities this government has seen.
“There are clearly differing views on setting a 2030 decarbonisation target for the power sector, but we are pleased that the House has chosen to support our position.
“It makes sense to legislate now to enable us to set a decarbonisation target range in 2016, once we’ve decided the level of economy-wide emissions reductions that will have to be achieved by 2030 under the 5th Carbon Budget.
“This means that a target would not be set in isolation but in the context of considering the pathway of the whole economy towards our 2050 target, and making sure we do that in a way that minimises costs both to the economy as a whole and to bill payers.
“Regardless of this, we’re already bound by law to cut emissions across the whole UK economy by 50 per cent by 2025, and the Energy Bill will bring about substantial decarbonisation of the power sector as part of that.
“Long term contracts for low carbon will give renewables, nuclear and CCS the chance to compete against conventional power stations, and will be backed by a tripling in support for clean energy technologies by 2020.
“The bill will ensure that we produce cleaner energy, keep the lights on and people’s bills down.”
Read more about the Energy Bill.