Breakdown in Government energy policy as windfarm axed

The decision by RWE/nPower, the big German energy company, to drop the £4bn Atlantic Array windfarm project in the Bristol Channel sends out alarm bells in all directions. First, it shows the unreliability of depending on foreign suppliers of energy who, when in economic difficulties, will cut back on commitments abroad in order to maintain their focus on domestic customers unscathed.

Half the Big Six energy giants are now foreign-owned, and will feel no compunction in disadvantaging other nations in a way they could not easily get away with at home. RWE claims the economic no long add up with Atlantic Array, yet none of the economics have changed. What has changed is that RWE now has debts of £30bn, so they have to make cuts, and Britain is an easy target. It is already clear they may their sights on pulling out of other projects in Dogger Bank, Hornsea and East Anglia.

Second, it blows a big hole in the government’s renewables policy. The UK is committed to make a 15% contribution to the EU’s target that by 20% of all primary energy consumption must comes from renewables by 2020. Since renewable energy makes virtually no contribution to transport and only a very little to space heating, almost all of that 15% target must come from electricity generation, and since the latter is only a small part of primary energy consumption, the UK needs to boost its electricity generation from windpower, solar, wave and tidal, and hydro to around 35%. At present it is about 10%. Given the RWE pullout, and maybe others to come, there is no hope that the necessary 35% target can be reached in the next 6-7 years, especially given the Tory Right’s (and Osborne’s) hostility to windfarms everywhere.

Third, the whole government’s approach to green energy is in absolute turmoil. Within just 3 years Cameron’s sympathies have nose-dived from ‘greenest government ever’ to (according to the Sun) ‘got to get rid of all this green crap’. Though energy firms have hiked prices by 34% in just 3 years and last year the Big Six increased their profits per customer by no less than 77%, these same energy companies are now howling for the cutting back, or even removal, of the Energy Company Obligation which is designed to increase energy-saving measures for households, and the government is wavering (we shall know next week when the Autumn Statement is delivered on 5 December). If Osborne succumbs, again, to his corporate friends’ demands, the government will be in the ludicrous position of reducing energy costs this year (in their frenzy to counter Ed Miliband’s popular energy price freeze) at the expense of increasing them every year thereafter because the energy-saving devices won’t happen.