Boris Johnson visits the Scottish Power Carland Cross Windfarm. Picture credit: Jon Super - WPA Pool via Getty Images
Artillery Row

Green energy cannot save us

We require reliable power — not just eco-posturing

Amid the furore surrounding “birthdaycakegate”, “cheeseandwinegate” and “proseccogate”, which could still derail the premiership of Boris Johnson, the risks in Ukraine are looming large and the certainty of a cost of living crisis lies dead ahead. The government must deal with it. To restore trust with the wider public and the new voters who, perhaps for the first time voted Conservative in 2019, Boris Johnson has to show that he is the one with the solutions to the problems Britain is facing.

While inflation is soaring across the board, rising fastest of all is the cost of energy. Energy is an area where the Government has intervened repeatedly to exacerbate this crisis. It would take extreme propaganda to blame free markets and low taxes when we have had extensive state planning, high taxes, subsidies and misleading claims about the costs of renewables. Only by solving the energy crisis can the government’s economic agenda be revived, not least given the state of out pandemic finances.

We have paved the way to increased imports and assisted in the financing of Putin’s war machine

We have heard this crisis shows we need to move more quickly away from gas (though habitually from people who would have said this whatever else was happening in the world). That may be a solution for decades ahead once technology evolves, but the problem we have is now.

Natural gas is used by the overwhelming majority to heat their homes, and it is the dominant single power source providing electricity to the National Grid. By sharply reducing domestic production and storage way ahead of the marginal reduction in our gas use, we have simply paved the way to increased imports and inadvertently assisted in the financing of Putin’s war machine.

This attitude also displays a certain complacency. Are people facing eye-watering bill increases supposed to wait until we have an economy that isn’t overwhelmingly powered by fossil fuels?

Far from protecting us from price rises, the present obsession with renewables has made the current crisis much worse. If you look at when wind and natural gas are supplying power to the grid, you see that when wind conditions are poor, gas ramps up to make up the difference. This winter, the predictable coincidence of both poor wind conditions and high natural gas prices has caught us out time and again. Wind has offered next-to-no protection. It is neither kind nor responsible politics to leave the most vulnerable the least well-protected.

The determination to push through Net Zero policies without adequate consideration of their implications could do even more damage to the Government than Partygate. Thankfully, there are solutions to our energy woes staring us right in the face. And they’re real, unlike the hysterical conspiracy theories supporters of the government’s ruinously costly energy policies tend to spout.

Oxford energy professor Dieter Helm was commissioned by the Government to do a “Cost of Energy Review”, published in 2017. In it, he attacked successive governments for ignoring the problem of intermittency and creating a complex web of overlapping policy interventions that led to bloated costs. He offered solutions such as the creation of “Equivalent Firm Power” auctions, that would have given renewable generators a strong incentive to invest in back-up and storage.

We must be able to use our own natural gas supplies, which are right under our feet 

Helm’s recommendations were shouted down by the industries that had most to lose from their implementation. The proposals would have brought an end to the high prices being charged for network services and forced renewable generators to manage the grid instability that they were responsible for. Regrettably, the Government were unable to recognise these vested interests for what they were, and ignored their own report.

As my colleagues and I made clear in our letter to The Sunday Telegraph, consumers will need urgent relief from spiralling prices. Relief from VAT and from the cost of environmental levies, which now make up close to 25 per cent of electricity bills, will cushion the blow, but we have to deal with the market fundamentals to get bills down for good else face impoverished families and the final closure of remaining high energy intensive industries as production, jobs and the positive tax-take simply relocates abroad.

We must be able to use our own natural gas supplies, which are right under our feet as well as out to sea. Using our own gas will bring investment, jobs, a good helping of taxes and reduce emissions compared to imported gas, which often comes with geopolitical strings attached. To say that we ought not to try because it might not make that much of a difference to prices is utterly defeatist, neglecting the experience of the USA. It’s for businesses to experiment in the marketplace and not for the government to arbitrarily cancel industries and manage prices based on a hunch that may prove to be wrong.

The electricity market must be reformed, unravelling the unnecessary complexity of many layers of intervention, and bringing market forces to bear on prices. It is only by properly incentivising the provision of reliable power that we can hope to meet the changing energy needs of the future at an affordable price while maintaining security of supply.

Historically Conservatives at heart understood these principles well — that cheaper energy benefits the economy at every level. Or we did. But today’s Government seems unable to look beyond the green groupthink that pervades Whitehall. Getting this government back on track is going to require reliable power: we’re a long way from that..

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