Government has a vital role ensuring that green goals and supply needs are both maintained
Last year was a rough one for the climate change secretary, the Lib Dems’ Ed Davey. The big government offer in 2010 of a clear, market-driven energy policy turns out to have been easier to promise than to deliver. That is partly the fault of coalition politics. Energy became the battleground for the most fundamental differences between the two partners. As a result, a policy area that demands long-term thinking has been mired in uncertainty. The case for green energy has been widely undermined by misleading accounts of its cost to the consumer. David Cameron, the man who used to say vote blue, go green, now talks of cutting the green crap.
In the midst of the political squabbling, the Department of Energy and Climate Change (Decc) has lurched between crises. Last month, faced with warnings from the power-generation industry that they were working at something close to full capacity, with a margin of as little as 2% at times of peak demand, Mr Davey’s department looked for a cast-iron guarantee that the lights would stay on. Although many independent observers argued that the 2% margin was likely to be breached only in an extreme winter, and then only for a very short period, last month the National Grid held the first ever auction for capacity contracts which can ensure the lights will not go out. The generators guaranteed they would have power available and, in return, were guaranteed sales at a price that, when it comes on stream three years from now, will cost consumers about £1bn a year.