Committees and hot air – is there a global warming link?
After lengthy sessions negotiators at the latest COP21 (Conference Of Parties) meeting in Paris to tackle climate change and reduce greenhouse gas emissions, reached agreement on a new Protocol text aimed at curbing global warming. The negotiators whittled down the number of square brackets, indicating significant disagreement, in the text. They had been reduced to around 50, a major improvement on the number at the start of COP21 when they ran to more than 900, even if this was achieved by removing wording about anything really contentious (to be argued about later).
The climate change threat has lead to a renewed interest in that zero carbon emission, but costly, technology nuclear. But even France, the great nuclear advocate, has got cold feet about its proposed nuclear plant at Hinkley. According to press reports (Reuters) EDF Actionnariat salarié (EAS) aka the association of employee-shareholders said in a statement on 12 November that ‘the interests of EDF are gravely threatened by the Hinkley Point project, which it calls “a financial catastrophy (sic) foretold” in which EDF has nothing to gain and everything to lose’.
So what of one of the other low carbon technologies carbon capture and storage (CCS)?
According to New Power issue 82 although Secretary of State Amber Rudd announced, on 18 November, just before COP21, a consultation on ending unabated coal-fired power stations by 2025 and that new gas-fired power stations are a ‘priority’; it was undermined a week later on 25 November by the cancellation of £1billion in funding that was hidden away in a stock exchange release that coincided with the spending review It said: Today, following the Chancellor’s Autumn Statement, HM Government confirms that the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available. This decision means that the CCS Competition cannot proceed on its current basis. We will engage closely with the bidders on the implications of this decision for them.”
So without CCS where now? On 18 November Energy and Climate Change Secretary Amber Rudd promised a “fleet of new nuclear power stations” in the 2020s and new gas plant replacing coal.
Amongst the big ticket policy statements the lobby groups have also been beavering away. The governance of the UK’s energy industry is too complex and expensive and it presents barriers to new entry. It should be streamlined to cut 30 bodies to three: a ‘delivery body’, an industry codes body and an independent system operator (ISO). That is the conclusion of think tank Policy Exchange, in a new report titled Governing Power: improving the administration of the energy industry in Great Britain.
Policy Exchange found more than 30 organisations actively involved in administration of the energy industry. There was “little transparency” on the cost of the bodies, but the report estimated it was at least £500 million per year plus at least £135 million more administrative spending at the Department of Energy and Climate Change (Decc) itself. There was more cost involved within energy companies: “A large integrated energy company could typically have a team of up to 200 people working on energy policy (including delivery of obligations), regulation, and government affairs,” the report said. That also deterred new entrants, which “simply do not have the resources to engage with all aspects of energy policy and regulation, such as the numerous industry working groups which develop industry ‘codes’, or market rules. In particular, smaller companies have to prioritise heavily, cherry picking only the policies and regulations which affect them the most”, the report said (undoubtedly true but despite this we now have about 20 new domestic suppliers that have started up).
In the Daily Mail’s This is Money page on 10 November Howard said: ‘There are now over 30 organisations actively involved in the administration of the energy industry. They often perform similar functions, pushing up costs and creating complexity for energy companies. ‘This unnecessary red tape risks deterring new entrants and stifling growth and innovation. It is time for the Government to consider consolidating a large number of these bodies.’
Sure, competition can be a good and efficient way to manage resources and lead to innovation but the problem with where we are now is that government intervention has killed off the reality of a free market given that no one is going to build any new plant unless it has a contract countersigned by some government agency or underwritten by consumers in one way or another and until governments are crystal clear that they are going to intervene to save the planet we will continue to spawn more Committees.
Maybe we will eventually wake up and save the planet but I would not advise holding your breath while waiting.