Pembrokeshire Friends of the Earth - News
Meeting with Stephen Crabb MP 1st Dec 2015
Environmentally Damaging Policies of the Conservative Government
Prepared for the Pembrokeshire FoE meeting with Stephen Crabb MP on October 8th 2015.
Energy Policy
The Renewables Obligation for onshore wind energy will end on first of April 2016, one year earlier than intended. About 250 projects, with a combined capacity of 7.1 GW, will be lost. Baroness Worthington, the shadow speaker on energy and climate change in the House of Lords, has pointed out that when Amber Rudd announced this measure in the House of Commons some Conservative MPs called for an end to all forms of renewable energy.
Following the scrapping of Renewable Obligation support for solar developments over 5 MW from 1 April this year, the government is now proposing to end similar funding for smaller solar projects under 5 MW by 1 April 2016, a year earlier than expected. The Energy and Climate Change Committee has been very critical of the government’s decision to publish these proposals after parliament went into recess.
Feed-in tariffs (FITs) for renewables are to be gutted under government consultation proposals. A typical solar household generation tariff would be cut by 86% while larger systems over 1 MW would have their tariff cut to 1.03p/kWh from 4.28/kWh. Wind turbines of 100-500 kW are set to receive less than half the former payout while the generation tariff would be completely removed for systems over 1.5 MW.
An analysis, based on government data, by Friends of the Earth estimates that 22,000 jobs could be lost by the proposed cut in subsidies for domestic solar electricity. In 2013, jobs in renewable energy grew by 6% compared to a 1.2% growth in the wider economy (ENDS Report, August 2015)
The influential centre-right think tank, Policy Exchange, has spoken out against government cuts to onshore wind subsidies arguing that they are vital for the affordable decarbonisation of electricity generation. Its concerns are shared by the Committee on Climate Change, whose chair, former Conservative MP Lord Deben, challenged the government in June to explain how it planned to keep decarbonisation costs down without new onshore wind.
Today, Bloomberg New Energy Finance has announced that onshore wind is now the cheapest form of UK electricity.
Despite the government’s claims to support community energy projects, these are likely to be particularly affected by subsidy changes for small-scale renewables. The Scottish and Welsh governments have written to energy secretary, Amber Rudd, warning that UK government proposals on renewable energy could “significantly damage” community energy projects.
Planning applications for onshore wind projects over 50 MW will now be decided by local planning authorities rather than the nationally significant infrastructure regime. This will make it easier for the vocal minorities who oppose wind energy to carry the day even if a majority is in favour.
In complete contrast to this, the government has decided to fast-track fracking developments through the planning system. Ministers will be given powers to call in fracking applications and these will be prioritised by the Planning Inspectorate. Councils deemed to deal too slowly with fracking applications will have these taken over by the Communities Secretary for determination. The government has said it will progress plans to amend permitted development rights to allow drilling boreholes for groundwater monitoring to take place as soon as a potential site is identified. Fracking is to be allowed in our most precious wildlife sites: Sites of Special Scientific Interest.
The UK government has added its weight to a behind-the-scenes lobbying drive by oil and gas firms including BP, Chevron, Shell and ExxonMobil to persuade EU leaders to scrap a series of environmental safety measures for fracking, according to leaked letters seen by the Guardian.
The uptake of subsidies under the Renewable Heat Incentive is down about 50% compared to last year following tariff reductions introduced by the government.
Electricity from renewable sources will no longer be exempt from the Climate Change Levy, a tax on energy use paid by businesses. Designed to penalises polluting power plants, this will now be applied to clean energy. FoE said it’s like putting an alcohol tax on apple juice. Two large energy companies are challenging the government’s withdrawal of this levy at the High Court.
The government states that its Levy Control Framework subsidy for renewables will be breached by 2020. This funding ceiling was set by the Treasury and could be raised if the government had a similar commitment to renewables that it has to nuclear power.
A pioneering Carbon Capture and Storage project in the North of England, proposed by the operators of the Drax coal-fired power station, has been cancelled because of the reduction in subsidies to renewables.
The UK has now dropped to 11th in the international league table on renewable energy. Accountancy firm Ernst & Young has said that the Conservative government has sentenced the renewable energy industry to “death by a thousand cuts” and investor confidence has collapsed because of policy changes over the summer.
DECC has confirmed that £40 million will be cut from energy efficiency subsidies for homes.
The Green Deal energy efficiency scheme has been axed. This flagship scheme of the Conservatives failed to deliver predicted results. Apart from the ECO-scheme for poorer households, there is no serious energy efficiency policy for homes, which account for around a third of UK carbon emissions.
Plans to ensure that all new homes would be ‘zero carbon’ from 2016 have been binned. The government did this a few days after the Committee on Climate Change asked for the zero-carbon homes standard to be implemented without further weakening. On 20th of July, green business leaders from construction and sustainable energy, including Tata Steel, Eon and Willmott Dixon, wrote an open letter to George Osborne objecting to the move [ENDS Report, August 2015].
There will be an expansion of tax relief for oil and gas exploration. FoE estimate that the government handed out hidden subsidies for oil and gas totalling £3 billion in the last parliament alone. This is in addition to the £1.3 billion paid out of consumer bills to fund the Capacity Market, an obscure mechanism designed to keep old powers stations operating.
Vehicle excise duty, from 2017, will increase for low emission cars and decrease for those with the highest emissions. For instance, a Toyota Prius hybrid could see road tax increase from £10 in the first year to £140. A Land Rover Freelander would see its first year rate fall from £800 to £140.
Fuel duty will remain frozen, breaking a previous government pledge that it would rise if oil prices remained below $75 a barrel.
Money raised from vehicle excise duty will go into a road building fund, which will increase car use, air pollution and emissions of climate-change gases, rather than into better public transport or cycling.
The government is supporting the Hinkley nuclear power station with a guaranteed price of £92.50 per megawatt hour over 35 years, compared with £81.95 per megawatt hour for onshore wind over a 15 year period. It is also underwriting the first £2 billion of the costs of the power station. The price being guaranteed for nuclear power is twice the wholesale market price of electricity, representing a subsidy of billions of pounds, most of which will line the pockets of the state-owned French and Chinese financial backers of Hinckley. To make matters worse, the £92.50 will rise in line with the consumer price index rate of inflation, meaning that, by 2030, the guaranteed price could be as high as £150 per megawatt hour.
A report by HSBC bank has been critical of the cost of Hinkley and concluded: ‘We see ample reason for the UK Government to delay or cancel the project.’ Former Tory Energy Secretary Lord Howell of Guildford – the self-described ‘pro-nuclear’ architect of a drive into nuclear power under Margaret Thatcher – has told the House of Lords that the reactor plan in Somerset was ‘one of the worst deals ever for British households and British industry’.
Experience shows that the predicted costs are likely to rise significantly. A similar power station being built in Finland is already running nine years late, quadrupling estimated costs. Another one being built in Normandy has already cost three times more than estimated and is running six years late. Hinkley is already five years behind schedule; it was meant to come on stream in 2018, then in 2023, but this target date has now also been abandoned.
DECC has admitted the U.K.’s present climate change policies could risk not meeting the fourth carbon budget in the 2020s (ENDS Report, August 2015). While the government is demolishing policies that cut carbon emissions, it is putting nothing in place to ensure that decarbonisation develops apace after 2020. It will be another decade or more before nuclear power or shale gas are likely to make any impact.
Finance
There will be no further commitment to raise the proportion of revenue from environmental taxes.
The Green Investment Bank, which was launched in 2012 to provide public funding for green projects, will be largely privatised (70% of the bank). The influential Tory think tank Bright Blue stated this was “the last thing we need”. Nick Mabey, the chief executive of E3G, has stated that the GIB maintained funding when bank lending fell to an all-time low and that privatisation “threatens to destroy investor confidence”.
Resource Efficiency
The European Parliament has dropped a demand for a resource efficiency target in the circular economy package following lobbying by member states including the UK. The UK also opposed higher recycling targets and measures to extend the Eco-design Directive beyond energy-related products and to introduce resource-efficiency features in all product requirements. A report by Imperial College, London has concluded that the circular economy would add £29 billion to UK GDP and create 175,000 new jobs. (ENDS Report, August 2015)
Green Economy
The UK Green economy was worth £122 billion in 2013. Employment in the sector grew by 12% between 2010 and 2013 while turnover increased 25%. The director-general of the CBI, John Cridland, has pointed out that the green economy “is a high-growth emerging economy in its own right….It grows at 7% a year instead of 3% (for the economy overall)”.
Pesticides
The government has suspended a ban in parts of England on a pesticide (neonictonide) linked to causing serious harm in bees. Over 500,000 people signed a petition opposing the lifting of the ban. FoE has launched a legal challenge against the government’s decision.
The government’s attack on environmental policies indicates that the phrase attributed to the Prime Minister, of rolling back the “green crap”, was correct and that his commitment to lead the greenest government ever was always a sham. The recent announcement that the UK government has pledged £6 billion to the international climate fund stands almost alone as a positive measure but even this suggests that the government would prefer to transfer responsibility for climate action onto other countries.
Prof Jim Skea, professor of energy at Imperial College, London, has stated that the government is trying to hold two opposing views on climate change simultaneously – an externally projected one of a nation setting the pace but that this is being contradicted by a domestic low-carbon policy being put in reverse gear. This, he points out, is harmful to investment and to the U.K.’s reputation in the run-up to the crucial Paris climate conference in December [ENDS Report September 2015].
The government is promoting the most costly policies to supposedly reduce carbon emissions from energy use while it is slashing the most cost-effective and quickest-to-implement ones. Energy experts, such as Prof Catherine Mitchell of Exeter University, have warned for a number of years that promoting nuclear power would reduce investment in, and political support for, the more effective carbon reduction policies of energy efficiency and renewable energy; the government is ensuring that this prediction will come true.
While other governments, such as in the USA, China, India and Germany, are driving forward renewable energy technologies and improvements in energy efficiency, the UK stands alone in switching the most effective low-carbon efforts into reverse. This is damaging to the economy, the environment, human health and the future prospects of our children.
