Or hot air from slow burners? After 12 years of destroying the infrastructure for the production and distribution of energy in the UK in the name of market liberalisation, Labour has a deathbed conversion and finally sees the light…
Labour prepares to tear up 12 years of energy policy
The Government is drawing up plans for a wholesale reform of Britain’s energy markets that could wind back the clock on 12 years of deregulation.
In an interview with The Times, Ed Miliband, the Energy and Climate Change Secretary, said that Britain’s existing, highly liberalised market regime, introduced under Labour in 1998, was failing to deliver the investment needed to cut UK carbon emissions by more than a third by 2020.
A market structure was being designed to boost long-term investment in low-carbon sources of electricity, including wind parks, nuclear reactors and fossil fuel stations equipped with carbon capture and storage (CCS) technology.
Mr Miliband said: “We are going to need a more interventionist energy policy to deliver the low-carbon investment we need.”
Labour prepares to tear up 12 years of energy policy
Mr Miliband said that changes being considered included: reform of Ofgem, the energy regulator, to improve care for consumers; an overhaul of Britain’s existing new electricity trading arrangements (Neta), which have been in place for more than ten years; and the introduction of “capacity payments” to guarantee returns to developers of low-carbon sources of power.
Mr Miliband said that big reforms would be essential to deliver the estimated £170 billion of investment to meet its goals of huge carbon cuts. The Neta system, in which electricity is traded via contracts between buyers and sellers or power exchanges, does not give sufficient guarantees to developers of wind turbines and nuclear plants.
He said that one alternative would be a return to “capacity payments” — in which power station operators would be paid for the electricity they generate and also for capacity made available. The idea of such payments is to give greater certainty to investors in renewable and nuclear energy. They would help to bolster the reliability of a grid that was more heavily reliant on power generation from wind farms.
He said: “This is very different from the current system, where you get paid for the electricity you produce and are not given any guarantees in advance. In future you could say `We need a certain amount of low-carbon capacity’ and generators would say how much they can provide.”
Such a move would be one of the biggest changes in Britain’s energy market since the 1989 Electricity Act, which began deregulation. It would also represent a return to some of the principles of the system before 1998. The Electricity Pool, which Neta replaced, had capacity payments but was criticised for being too inflexible. Mr Miliband said that details of the reforms would be in a document to be published in April called Roadmap to 2050, published with the 2010 Budget. He said that the changes were essential to help Britain to prepare for a doubling of electricity demand by 2050, driven by other policy objectives such as a growth of electric cars and a move from gas to electricity for heating.
A huge expansion of wind power is expected to have a big impact on the reliability of the national grid, which capacity payments could help to offset. Wind energy is intermittent and heavily reliant on back-up power generation for use when it is not blowing.
Who’d have thunk? What a strange Yurpean idea. Intervening in markets. Is paying for “capacity” rather than output not socialism – developing a non-market driven energy policy when the markets were supposed to be weaving their “magic”. Where is the hidden hand?
What a pity this seems like a death-bed conversion. Labour sees the light just as it is in grave danger of being ousted by a liberalising Tory Government. Or is this just Ed Miliband positioning himself for the leadership contest that is sure to follow a Labour defeat?
But if the markets can be wrong on energy, can they not also be wrong on banking, property, wages and the environment. Or are “externalities” like planet earth, finite resources, systemic risk, reliability and resilience, security and human needs finally beginning to be taken into account?
It is worth noting that the comment thread – on the Murdock Times – is almost universally hostile, ranging from free marketeers, climate change deniers, the emotionally anti-Labour, and UK nationalists decrying immigration or dependence on Russia. Some samples:
Labour prepares to tear up 12 years of energy policy
Dell Miller wrote: Whenever govt meddles in the free market, bad things happen. Moreso when that govt is very dumb. The fact that dodgy science is part of the reasoning makes it all the more silly.
David Martin wrote: Only a fool or a politician would propose off-shore wind as a power source.
At a minimum of 3 times the price of nuclear power it would still be utterly useless in the recent cold snap, for instance, and so would have to be backed up one for one by gas plants.
How many pensioners will freeze to death as they can’t afford heat?
Thing bills 3 times current levels.
Simon Newbold wrote: £170 billion pounds to meet its goal of carbon cuts????
To put this in perspective, CO2 comprises 0.04% of the atmosphere, and the UK emits 2% of global emissions.
This moron is therefore, apparently stating that it is worth £170 billion pounds of taxpayers money to reduce the CO2 in the atmosphere by 0.008%.
Is it just me, or do these figures make no sense at all???
And all this at a time when the IPCC has been shown to have deliberately falsified science and suppressed any evidence that contradicts their preconceived agenda, that AGW, or climate change is totally man-made!
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