|Andrea Leadsom pictured outside UK’s Department of Energy and Climate Change. Photo credit: Department of Energy and Climate Change via Flickr.|
By Anders Lorenzen
Policy uncertainties loom over large parts of UK’s renewable energy industry due to subsidy cuts and policy changes, proposed or implemented by the UK government.
Analysts and investors were hoping for some clarity and positive investment signals when the energy minister Andrea Leadsom spoke at the EMEA Future of Energy Summit, held in London and hosted by the Bloomberg New Energy Finance (BNEF) organisation on the 12/13 October. But those hopes were quickly dashed. When Leadsom had finished her speech at 12 noon on Tuesday, the minister had not expressed greater support for the renewable energy industry. Instead, the minister had decided to focus on more fossil fuel extraction and support for nuclear energy. She said that the oil and gas sector was of huge importance to the UK economy and we must get behind it, talking up the economic benefit of shale gas extraction and protecting North Sea oil and gas jobs. She even said that it was an inconvenient truth that shale gas would happen in the UK, of course referring back to Al Gore’s 2007 film of the same title that is believed to have created a huge climate change movement and momentum.
Yesterday at the summit, Scotland’s energy minister, Fergus Ewing attacked the UK government for what he called an onslaught on the clean energy industry.
Spectators were left puzzled that Leadsom had chosen a clean energy summit to talk-up more fossil fuel energy extraction and that she didn’t positively refer to clean energy, in the same way, as she referred positively to fossil fuels. Of all the attendees I spoke to about this issue, they all expressed surprise and shock about the way the speech was delivered.
The very little Leadsom said about renewable energy was that the UK government is fully behind wind and solar, but it has to stand on its own two feet and survive without subsidies in order to protect bill payers. However, she didn’t mention the two solar companies who recently went into administration and the around 20,000 jobs that are expected to be lost in the solar industry due to subsidy cuts. She did, however, highlight 1,000 new jobs in the UK offshore wind industry due to a new factory being built in the port of Hull.
Spectators were also left puzzled by the fact that the minister left without taking any questions, something the organisers were surprised about as well, as they had to make last-minute changes to the schedule due to this. Sources close to DECC told me that the minister had hardly prepared the speech and Tuesday morning the Guardian reported that the department of Energy and Climate Change (DECC) appears to be in turmoil as a series of angry Leadsom tweets accused her critics of lies, distortion and nonsense. In another development, the former Conservative energy minister Greg Barker has criticised the government’s solar subsidy cuts.
It was a different atmosphere altogether only a few hours earlier as the founder of BNEF, Michael Liebreich, who is a member of the Conservative Party, had given a positive and enthusiastic speech about the state of the clean energy industry. In that speech, Liebreich did say that he expected the Secretary of State for Energy and Climate Change, Amber Rudd, to deliver a speech in the next couple of weeks announcing positive policy initiatives for the UK’s renewable energy industry.
But, until then, industry and analysts will be confused about what investment signals the UK government are sending to the renewable energy industry.
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