Shades of green from those in power
Parliamentary correspondent David Torrance considers the Government's disjointed policy messages on renewables and its new energy bill ...
MOOD music is very important in politics.
The noises a government makes before a formal statement of intent can make all the difference between a policy's success and its failure.
Energy is a case in point. For more than two years, investors – not least energy giant Siemens – have closely followed the political mood music emanating from Downing Street and Whitehall.
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When the Conservatives were still in opposition, the notes sounded rather sweet. David Cameron's pitch was "vote Blue, go Green"; Labour even unwittingly underlined the point by depicting the Tory leader as a chameleon riding a bicycle.
In office after the May 2010 general election, the coalition kept the music playing, the Prime Minister even pledging to lead the "greenest government ever". But it is safe to say renewables investors have not always liked what they've heard since.
Energy Minister John Hayes has, of late, become the pantomime villain of the renewables debate, emitting discordant notes about onshore wind farms whenever prompted, and, by some accounts, with tacit encouragement from Downing Street.
Although Mr Hayes was careful not to attack offshore wind projects, his occasionally florid pronouncements still worried investors. In short, the Government's mood music was sounding rather disjointed.
The much-delayed Energy Bill, therefore, was widely perceived as a crucial test of whether or not the Government was serious about long-term investment in renewable energy, and, by extension, serious about securing Siemens' turbine factory at Green Port Hull.
Finally, late last Thursday night, the Energy Secretary Ed Davey revealed the essence of his proposed Bill, to be published in full later this week. Siemens and the city's MPs were cautiously upbeat.
"The best news is that the Energy Bill is about to be published," says Hull West and Hessle MP Alan Johnson, "If it had been delayed into next year – which was the view of some commentators – that would have been very bad news for Hull."
Full details are yet to emerge but crucially for companies such as Siemens, the Bill will commit to renewables infrastructure spending of £7.6bn by 2020 (to be paid for by rising household energy bills), which Mr Davey says provides the necessary certainty for investors to inject up to £110bn more, securing about 250,000 jobs across the country.
Being the product of a two-party Government, however, the Energy Bill carries the distinct whiff of coalition fudge. Although the Liberal Democrats secured the subsidies to woo investors worried by Government indecision, they lost out to the Conservatives on other key points.
A decision on a carbon emissions target for 2030 has been postponed until after the next general election, so, beyond 2020, the Chancellor George Osborne (a key player in shaping the Energy Bill) is refusing to commit. This makes some in the renewables sector nervous.
Charlie Spencer is chief executive of the Spencer Group, which is developing a £100m-plus biomass energy power plant called Energy Works on the east bank of the River Hull. Although he says the Energy Bill is good news for that sort of facility, he's not so sure about offshore wind.
"The main problem for the offshore wind industry is that the Government is only providing support up until 2020," he says. "Anything happening after that they've put off deciding until 2016. That means if Siemens is to build a factory in Hull, they've only got a guaranteed subsidy for six years."
Most of those involved in the campaign to secure Siemens' investment are, however, more optimistic. Hull East MP Karl Turner says the Energy Bill is positive "in that it offers guarantees up to 2020", although he still thinks the Government could "have gone further".
"It's not terrible news in relation to Siemens," he says; "it's a start."
Mr Turner also echoes a point made by his Hull North colleague Diana Johnson last week. She more or less committed a future Labour government to a longer-term renewables commitment, to make sure investors stick around for at least another decade beyond 2020.
Brigg and Goole MP Andrew Percy, however, feels criticism of the Government's energy stance has been "unfair".
"They've been under double pressure," he says. "We all want to see renewable energy in Humberside, but it has to be paid for by higher bills.
So the great energy uncertainty is not over quite yet. The full Bill is still to be published, and even then specific subsidies for renewables will not be set until next year.
In other words, the mood music might sound a little more upbeat, but the fat lady has yet to sing.