The Government announce that they will announce an announcement!

The United Kingdom’s Secretary of State for Energy and Climate Change (what a grand title) Mr E Miliband spoke on television about energy. He announced a forthcoming announcement. That is the way Governments do things these days; they throw policy teasers into the wind, then they talk about forthcoming policy announcements and then make the announcement. Having made the announcement they then make it at least three or four times more, so that by the time they are making the policy most people think that this has been the policy all along.

Mr Miliband was in fact much more straightforward than we have come to expect from this Government.    He said that the G8 statement about keeping average temperatures to less than 2 degrees by 2050 was important and now he would be announcing a “route map” to show us how we get from where we are now to meeting the target in the future. That was the announcement about a forthcoming announcement.

I do not propose to try and unravel the hints and statements of Mr Miliband; we shall see on Wednesday just how far his policy will go and in particular whether the new policy stands a chance of reducing climate changing greenhouse gases. I do know, however, that Mr Miliband is promoting a nonexistent technology – carbon capture and storage, and in doing so is hoping that science will come to the aid of humanity’s excesses. In fact a predecessor of Mr Miliband decided the ebst way to discover carbon capture and storage was to announce a competiton, that most of the competitors (only huge companies need apply) withdrew.

It is a forlorn hope, because we find time and time again that humanity, led by politicians who are in turn dominated by large businesses, are more concerned about the short term cost of something rather than its long term effects. With energy, nothing is free.

Mr Miliband was questioned about future energy prices; he did not shy away from the fact that more renewable energy will cost UK consumers more in higher energy bills. He indicated that there would be feed in tariffs for renewable energy; this is not new; there have been various consultations and talks with the Department of Energy and Climate Change’s officials by the renewable energy industry about feed in tariffs both for electricity and for heat; in the case of solar thermal there is talk of a deemed feed in tariff.

The only worthwhile point to make about feed in tariffs is that if they are to have any useful effect three conditions must be fulfilled:-

1. The tariff must be sufficiently generous to stimulate people to voluntarily adopt micro generation measures. People must be able to see a viable medium to long term benefit from their investment, in return for in effect taking some of the state’s investment in renewable energy and in energy infrastructure upon their own shoulders, or more accurately, from their own bank accounts.
2. The feed in tariff must not compete against gas and electricity supplied at its lowest marginal rate. That is simply nonsense. You cannot stimulate the take up of renewables by having a descending scale in which consumers pay for fossil fuel according to how much they use – the more they use the cheaper it is which means renewables have to compete against the cheapest fossil fuel tariff. If the pricing pyramid were to be inverted the feed in tariff could be less generous, take up would be encouraged because savings would be at the highest marginal rate of use and the polluter would pay for higher energy use.
3. There must be no penalisation of early adopters of renewable technology. In the case of solar heat technology most solar systems are fitted without people taking up the £400 subsidy offer, because the subsidy usually costs measures (nothing to do with renewable heat) which cost £600 to get and involves disruption. If people have not taken up a subsidy previously and they have properly qualifying equipment, then why not allow then to benefit from a feed in tariff. If this is not allowed I can see much microgeneration business grinding to a rapid halt while government announces and people wait for future feed in tariffs. The carbon cost would be huge and the loss of business and skills and employment would also be very large and take a long time to recover.

I shall report on the real announcement after it has been published and I have considered it properly.