A changing of the guard in an organisation is a good time at which to pause and reconsider every aspect of strategy. The mistakes of the past can be admitted, entrenched but outdated positions can be quietly left behind and altered circumstances accepted. That is what should happen now in the UK in relation to energy policy. DECC has been too small to carry weight in Whitehall and, as the mistakes on new nuclear and the Green Deal home energy-saving scheme have shown, it lacked key negotiating skills. In any case, what matters are the policies, not the architecture of Whitehall. There are four key areas where a reappraisal is justified. The first is new nuclear. Hinkley Point is at least eight years behind schedule and billions over budget. The cost estimate seems to rise every month, just as the date for a final investment decision is constantly pushed back. The project is a laughing stock, and ministers and officials have lost confidence in EDF and its management. As the National Audit Office made clear in a devastating report this week, the costs to the UK consumer and taxpayer are extraordinarily high. At the very least the agreement on the price to be paid for power from Hinkley must be renegotiated. The deal was struck three years ago, since when energy prices have dropped dramatically. The UK is locked unnecessarily into high energy prices — a fact reported this week to have been noted by Mrs May’s key adviser Nick Timothy. Rather than just renegotiating, however, it may now suit both the UK and EDF to scrap the project, opening the way for more reliable and cheaper new nuclear suppliers and more natural gas.
FT 18th July 2016 read more »
Since its creation, the energy department had been hobbled by a lack of alignment with broader industrial policy. The Ministry of Magic had a constantly revolving door of incessant ministerial changes that in turn led to frequent zig-zags in policy. Add to that the fact that, as a relatively small department, DECC lacked gravitas and was seen as a stepping stone to a bigger job elsewhere and its travails seem understandable, if not always forgiveable. What the energy industry craves above all are stability and continuity, qualities that underpin the massive long-term investments needed to construct power stations and networks. Conspicuously, precious few are being built. A beefed-up Department for Business, Energy and Industrial Strategy may prove to be a bigger and more powerful beast and therefore better able to fight its corner and to retain talented ministers with the leadership it needs. Greg Clark, its new boss, has been widely praised as a strong appointment and is already on top of the brief, having served previously as shadow energy minister. One of Mr Clark’s first priorities will be to help to seal the long-delayed, oft-criticised plan by EDF, of France, to build an £18 billion nuclear power station at Hinkley Point in the Somerset coast. He will need plenty of beginner’s luck to pull off this particular stunt, given the huge costs and complexities involved, or perhaps a spot of magic. If only making energy policy was as easy as a wave of the boy wizard’s wand.
Times 18th July 2016 read more »
Scottish Energy Minister Paul Wheelhouse is seeking ‘urgent’ talks with the UK Government following Prime Minister May’s decision to axe the Department of Energy and Climate Change in Whitehall. The decision to scrap DECC as a standalone department and merge it into a combined Dept for Business, Energy and Industry has now led to concerns about the Prime Minister’s commitment to tackling climate change and support for renewable energy. The Scottish Government was already working to safeguard investment in vital renewable energy projects amidst the uncertainty created by the vote in favour of British Independence from the EU-bloc.
Scottish Energy News 18th July 2016 read more »