Letter Lord Hollick, House of Lords: Further to Nick Butler’s blog “The price of power: how to renew a broken policy” (February 27): the challenge for those designing energy policy is to satisfy three objectives – security of supply, affordability and the reduction of carbon emissions. The report published last week by the House of Lords Economics Affairs Committee concludes that current policy is not addressing all three of these aims adequately. Reducing emissions has been given a legally enforced priority with little regard to costs. We do not believe the lights are about to go out, but the margin of safety is thin, and the mechanisms devised to ensure security of supply carry even more costs which will in the end be reflected in the bills of consumers, including UK-based businesses. The financial and technical risks associated with new nuclear, which the Financial Times has reported regularly over recent months, could add still further costs. The government has gone beyond the role of setting direction for the energy sector to intervening in every detail. The balance between the public and private sectors has been distorted – discouraging private investment just when it is most needed. Transparency has been sacrificed – we still do not know all the details of the Hinkley Point deal – and competition between different electricity generators, which should be the means of keeping costs down, has been minimised. More money needs to be devoted to research and its application. Our report advocates the creation of a national laboratory dedicated to the development of new low cost, low carbon sources of supply. Less money needs to be spent on subsidies. Open competition would bring down costs and increase transparency. It should be possible to ensure consumers pay less for their electricity without sacrificing any of the objectives.
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Letter Hugh McNeal Renewables UK: Nick Butler is wrong to suggest that the UK government’s energy strategy has failed. During this decade, under three Conservative or Conservative-led governments, renewable energy has moved from being a marginal source of power to a point where it now provides 25 per cent of the UK’s electricity. Wind capacity alone has expanded from 4GW in 2010 to more than 14.5GW today. Decarbonising energy is not an additional requirement – it is government strategy. This infrastructure transformation should be celebrated. Mr Butler is also incorrect to suggest that “ministers promoted specific technologies irrespective of cost”. The government set the offshore wind industry a target in 2012 to slash costs by a third before the end of this decade – the industry hit it i n 2016. Research taking place in the UK at institutions such as the Offshore Renewable Energy Catapult in Blyth, is driving these reductions, undermining his assertion that “almost all the recent gains in solar and wind technology have come from the US and China”. The UK has more than 5,000MW of offshore wind capacity, whereas China has only 500MW and the US just 30MW. The suggestion that consumers will be “paying through the nose” for renewables is incorrect. Bloomberg New Energy Finance states that onshore wind is the cheapest way to generate electricity, bar none – including gas. As last week’s House of Lords Economic Affairs Committee report notes, the main cause of increases in electricity bills over the past 14 years is rising international fossil fuel prices. When it comes to keeping the lights on, Mr Butler says that “security of supply has been made more vulnerable” by the clumsy way renewables have been promoted. Last week the UK Energy Research Centre highlighted that costs were dramatically lower for flexible systems overall, with renewable energy playing a mainstream role. In the words of Steve Holliday, who ran National Grid for a decade, stories about blackout Britain are “just scare stories”. We could not agree more.
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